UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
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þ | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | | For the fiscal year ended December 31, 2005 |
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 FileNumber 333-21873
FIRST INDUSTRIAL, L.P.
(Exact name of Registrant as specified in its Charter)
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| Delaware | | 36-3924586 |
| (State or other jurisdiction of | | (I.R.S. Employer |
| incorporation or organization) | | Identification No.) |
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311 S. Wacker Drive, Suite 4000,
Chicago, Illinois | | 60606
(Zip Code) |
| (Address of principal executive offices) | | |
(Registrant’s telephone number, including area code)
(312) 344-4300
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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No þ
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 þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation 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 thisForm 10-K or any amendment to thisForm 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ Accelerated filer o Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes o No þ
FIRST INDUSTRIAL, L.P.
TABLE OF CONTENTS
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This report contains certain 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. First Industrial, L.P. (the “Operating Partnership”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Operating Partnership, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Operating Partnership’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Operating Partnership on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rates, competition, supply and demand for industrial properties in the Operating Partnership’s current and proposed market areas, potential environmental liabilities, slippage in development orlease-up schedules, tenant credit risks,higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and its business, including additional factors that could materially affect the Operating Partnership’s financial results, is included herein in Item 1A, “Risk Factors” and in the Operating Partnership’s other filings with the Securities and Exchange Commission.
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PART I
THE COMPANY
General
First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% ownership interest at December 31, 2005. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $312.5 million. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership owned, in the aggregate, approximately a 13.2% interest in the Operating Partnership at December 31, 2005.
The Operating Partnership is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of First Industrial Development Services, Inc., (together with the Operating Partnership and the L.L.C.’s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership as presented herein. The Operating Partnership also holds at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, (the “Mortgage Partnership”), L.P First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD., and FI Development Services L.P. and wholly owned LLC’s (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnerships’ operating data is presented herein on a combined basis, separate from that of the Consolidated Operating Partnership. The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company. The Operating Partnership or First Industrial Development Services, Inc., through separate wholly-owned limited liability companies in which it is the sole member, also owns minority equity interests in, and provides various services to, four joint ventures which invest in industrial properties (the “September 1998 Joint Venture” the “May 2003 Joint Venture”, the “March 2005 Joint Venture” and the “September 2005 Joint Venture”). The Operating Partnership, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in, and provided property management services to, a fifth joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture and the September 2005 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. The operating data of the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein. The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting.
As of December 31, 2005, the Consolidated Operating Partnership owned 786 in-service industrial properties, containing an aggregate of approximately 61.7 million square feet of gross leasable area (“GLA”). On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 98 in-service industrial properties, containing an aggregate of approximately 8.5 million square feet of GLA. Of the 98 industrial properties owned by the Other Real Estate Partnerships at December 31, 2005, 11 are held by the Mortgage Partnership, 37 are held by the Pennsylvania Partnership, 14 are held by the Securities Partnership, 21 are held by the Financing Partnership, 10 are held by the Harrisburg Partnership, four are held by the Indianapolis Partnership and one is held by TK-SV, LTD. The Consolidated Operating Partnership’s and Other Real Estate Partnerships’ in-service properties include all properties other than developed, redeveloped and acquired properties that have not yet reached stabilized occupancy (generally defined as properties that are 90% leased).
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The Consolidated Operating Partnership utilizes an operating approach which combines the effectiveness of decentralized, locally based property management, acquisition, sales and development functions with the cost efficiencies of centralized acquisition, sales and development support, capital markets expertise, asset management and fiscal control systems. At March 6, 2006, the Consolidated Operating Partnership had 441 employees.
The Consolidated Operating Partnership has grown and will seek to continue to grow through the development and the acquisition of additional industrial properties, through additional joint venture investments, and through its corporate services program.
The Company maintains a website at www.firstindustrial.com. Copies of the Company’s annual report onForm 10-K, quarterly reports onForm 10-Q, current reports onForm 8-K and amendments to such reports are available without charge on the Company’s website as soon as reasonably practicable after such reports are filed with or furnished to the SEC. In addition, the Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Nominating/Corporate Governance Committee Charter, along with supplemental financial and operating information prepared by the Company, are all available without charge on the Company’s website or upon request to the Company. Amendments to, or waivers from, the Company’s Code of Business Conduct and Ethics that apply to the Company’s executive officers or directors shall be posted to the Company’s website at www.firstindustrial.com. Please direct requests as follows:
First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 4000
Chicago, IL 60606
Attention: Investor Relations
Business Objectives and Growth Plans
The Consolidated Operating Partnership’s fundamental business objective is to maximize the total return to its partners through increases in per unit distributions and increases in the value of the Consolidated Operating Partnership’s properties and operations. The Consolidated Operating Partnership’s growth plans include the following elements:
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| | • | Internal Growth. The Consolidated Operating Partnership seeks to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) increasing occupancy levels at properties where vacancy exists and maintaining occupancy elsewhere; (iii) controlling and minimizing property operating and general and administrative expenses; (iv) renovating existing properties; and (v) increasing ancillary revenues from non-real estate sources. |
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| | • | External Growth. The Consolidated Operating Partnership seeks to grow externally through (i) the development of industrial properties; (ii) the acquisition of portfolios of industrial properties, industrial property businesses or individual properties which meet the Consolidated Operating Partnership’s investment parameters and target markets; (iii) additional joint venture investments; and (iv) the expansion of its properties. |
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| | • | Corporate Services. Through its corporate services program, the Consolidated Operating Partnership builds for, purchases from, and leases and sells industrial properties to companies that need industrial facilities. The Consolidated Operating Partnership seeks to grow this business by targeting both large and middle-market public and private companies. |
Business Strategies
The Consolidated Operating Partnership utilizes the following six strategies in connection with the operation of its business:
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| | • | Organization Strategy. The Consolidated Operating Partnership implements its decentralized property operations strategy through the deployment of experienced regional management teams and local |
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property managers. Each operating region is headed by a managing director, who is a senior executive officer of, and has an equity interest in, the Company. The Consolidated Operating Partnership provides acquisition, development and financing assistance, asset management oversight and financial reporting functions from its headquarters in Chicago, Illinois to support its regional operations. The Consolidated Operating Partnership believes the size of its portfolio enables it to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts.
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| | • | Market Strategy. The Consolidated Operating Partnership’s market strategy is to concentrate on the top industrial real estate markets in the United States. These top markets are based upon one or more of the following characteristics: (i) the strength of the market’s industrial real estate fundamentals, including increased industrial demand expectations; (ii) the history and outlook for continued economic growth and industry diversity; and (iii) a minimum market size of 100 million square feet of industrial space. The Consolidated Operating Partnership is currently evaluating industrial real estate investments outside of the United States, including Canada. |
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| | • | Leasing and Marketing Strategy. The Consolidated Operating Partnership has an operational management strategy designed to enhance tenant satisfaction and portfolio performance. The Consolidated Operating Partnership pursues an active leasing strategy, which includes marketing available space, seeking to renew existing leases at higher rents per square foot and seeking leases which provide for the pass-through of property-related expenses to the tenant. The Consolidated Operating Partnership also has local and national marketing programs which focus on the business and real estate brokerage communities and national tenants. |
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| | • | Acquisition/Development Strategy. The Consolidated Operating Partnership’s acquisition/development strategy is to invest in properties and other assets with higher yield potential in the top industrial real estate markets in the United States. Of the 884 industrial properties in the Consolidated Operating Partnership’s and Other Real Estate Partnerships’ combined in-service portfolios at December 31, 2005, 131 properties have been developed by the Consolidated Operating Partnership, the Other Real Estate Partnerships, or its former management. The Consolidated Operating Partnership will continue to leverage the development capabilities of its management, many of whom are leading industrial property developers in their respective markets. The Consolidated Operating Partnership is currently evaluating industrial real estate investments outside of the United States, including Canada. |
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| | • | Disposition Strategy. The Consolidated Operating Partnership continuously evaluates local market conditions and property-related factors in all of its markets for purposes of identifying assets suitable for disposition. |
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| | • | Financing Strategy. The Consolidated Operating Partnership plans on utilizing a portion of net sales proceeds from property sales, borrowings under its unsecured lines of credit, and proceeds from the issuance, when and as warranted, of additional debt and equity securities to finance future acquisitions and developments. The Company continually evaluates joint ventures arrangements as another source of capital. As of March 6, 2006, the Consolidated Operating Partnership had approximately $212.4 million available in additional borrowings under its unsecured line of credit. |
Recent Developments
In 2005, the Consolidated Operating Partnership acquired or placed in-service developments totaling 161 industrial properties and acquired several parcels of land for a total investment of approximately $832.5 million. The Consolidated Operating Partnership also sold 82 industrial properties and several parcels of land for a gross sales price of approximately $561.6 million. At December 31, 2005, the Consolidated Operating Partnership owned 786 in-service industrial properties containing approximately 61.7 million square feet of GLA.
On August 23, 2005, Operating Partnership, amended and restated its $300 million unsecured line of credit, which was due September 28, 2007, and bore interest at a floating rate of LIBOR plus .7%, or the Prime Rate, at the Company’s election. The amended and restated unsecured line of credit (the “2005 Unsecured Line of Credit I”) will mature on September 28, 2008, has a borrowing capacity of $500,000, with
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the right, subject to certain conditions, to increase the borrowing capacity up to $600,000 and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Company’s election. In December 2005, the Operating Partnership, entered into another unsecured line of credit (the “2005 Unsecured Line of Credit II”). The 2005 Unsecured Line of Credit II has a borrowing capacity of $125.0 million and matures on March 15, 2006. The 2005 Unsecured Line of Credit II provides for interest only payments at LIBOR plus .625% or at Prime, at the Operating Partnership’s election. In January 2006, the Consolidated Operating Partnership paid off and retired the 2005 Unsecured Line of Credit II. Together, the 2005 Unsecured Line of Credit I and 2005 Unsecured Line of Credit II, the “Unsecured Lines of Credit.”
On January 12, 2005, in conjunction with the acquisition of a parcel of land, the seller provided the Operating Partnership a mortgage loan in the amount of $1.2 million (the “Acquisition Mortgage Loan XV”). The Acquisition Mortgage Loan XV is collateralized by a land parcel in Lebanon, TN, does not require principal payments prior to maturity on January 12, 2006 and has a 0% interest rate (which the Consolidated Operating Partnership paid off and retired at maturity).
On March 31, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $2.0 million (the “Acquisition Mortgage Loan XVI”). The Acquisition Mortgage Loan XVI is collateralized by one property in New Hope, MN, bears interest at a fixed rate of 5.50% and provides for monthly principal and interest payments based on a20-year amortization schedule. The Acquisition Mortgage Loan XVI matures on September 30, 2024. In conjunction with the assumption of the Acquisition Mortgage Loan XVI, the Consolidated Operating Partnership recorded a premium in the amount of $.03 million which will be amortized as an adjustment to interest expense through March 31, 2009. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVI is 5.30%. The Acquisition Mortgage Loan XVI may be prepaid on April 1, 2009 without incurring a prepayment fee.
On June 27, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $3.1 million (the “Acquisition Mortgage Loan XVII”). The Acquisition Mortgage Loan XVII is collateralized by one property in Villa Rica, GA, bears interest at a fixed rate of 7.38% and provides for monthly principal and interest payments based on a15-year amortization schedule. The Acquisition Mortgage Loan XVII matures on May 1, 2016. In conjunction with the assumption of the Acquisition Mortgage Loan XVII, the Consolidated Operating Partnership recorded a premium in the amount of $.3 million which will be amortized as an adjustment to interest expense through May 1, 2016. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVII is 5.70%. The Acquisition Mortgage Loan XVII may not be prepaid until maturity without incurring a prepayment fee.
On June 30, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $6.5 million (the “Acquisition Mortgage Loan XVIII”). The Acquisition Mortgage Loan XVIII is collateralized by one property in Hammonton, NJ, bears interest at a fixed rate of 7.58% and provides for monthly principal and interest payments based on a20-year amortization schedule. The Acquisition Mortgage Loan XVIII matures on March 1, 2011. In conjunction with the assumption of the Acquisition Mortgage Loan XVIII, the Consolidated Operating Partnership recorded a premium in the amount of $.7 million which will be amortized as an adjustment to interest expense through November 30, 2010. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVIII is 4.93%. The Acquisition Mortgage Loan XVIII may be prepaid on December 1, 2010 without incurring a prepayment fee.
On September 30, 2004, the Consolidated Operating Partnership assumed a mortgage loan in the amount of $12.0 million and borrowed an additional $1.4 million (collectively referred to as the “Acquisition Mortgage Loan XIII”). The Acquisition Mortgage Loan XIII was collateralized by three properties in Phoenix, Arizona, bore interest at a fixed rate of 5.60% and provided for monthly principal and interest payments based on a30-year amortization schedule. The Acquisition Mortgage Loan XIII matures on November 10, 2012. In conjunction with the assumption of the Acquisition Mortgage Loan XIII, the Consolidated Operating Partnership recorded a premium in the amount of $.5 million which was being amortized over the remaining
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life of the Acquisition Mortgage Loan XIII as an adjustment to interest expense. On July 13, 2005, the Consolidated Operating Partnership sold the properties that collateralized the Acquisition Mortgage Loan XIII. In conjunction with the sale, the buyer assumed the Acquisition Mortgage Loan XIII and the Consolidated Operating Partnership paid $.3 million in fees related to the assignment of the Acquisition Mortgage Loan XIII. Consequently, the Consolidated Operating Partnership wrote-off the remaining premium on the note of $.4 million. Both the $.3 million of fees and $.4 million premium write-off are included in the Gain on Early Retirement of Debt on the Consolidated Operating Partnership’s Statement of Operations.
On November 20, 1997, the Consolidated Operating Partnership, issued $50 million of senior unsecured debt which matured on November 21, 2005 and bore a coupon interest rate of 6.90%, which was the effective interest rate (the “2005 Notes”). On November 21, 2005 the Consolidated Operating Partnership, paid off and retired the 2005 Notes for $50 million plus accrued interest.
On March 18, 2005, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which First Industrial Development Services, Inc. is the sole member entered into a joint venture arrangement (the “March 2005 Joint Venture”) with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Development Services, Inc., owns a 10% equity interest in the March 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the March 2005 Joint Venture. As of December 31, 2005, the March 2005 Joint Venture owned 47 industrial properties comprising approximately 4.2 million square feet (unaudited) of GLA and several land parcels.
On September 7, 2005, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which First Industrial Development Services, Inc. is the sole member entered into a joint venture arrangement (the “September 2005 Joint Venture”) with an institutional investor to invest in, own and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership, or First Industrial Development Services, Inc. owns a 10% equity interest in the September 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the September 2005 Joint Venture. As of December 31, 2005, the September 2005 Joint Venture owned 217 industrial properties comprising approximately 14.0 million square feet (unaudited) of GLA and several land parcels.
From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142.4 million (approximately $.9 million of which was made through the issuance of limited partnership interests in the Operating Partnership (“Units”)). The Consolidated Operating Partnership also sold 16 industrial properties including the industrial property that is accounted for as a build to suit development for sale, for approximately $241.1 million of gross proceeds during this period.
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Depositary Shares, respectively, each representing, $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187.5 million. Net of offering costs, the Company received net proceeds of approximately $181.5 million from the issuance of the Series I Preferred Stock which were contributed to the Operating Partnership in exchange for Series I Cumulative Preferred Units (the “Series I Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner preferred unit contribution. Dividends on the Series I Depositary Shares were payable monthly in arrears commencing December 31, 2005 at an initial dividend rate of One-Month LIBOR plus 1.25%, subject to reset on the four-month, six-month and one year anniversary of the date of issuance. The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $.4 million. The Series I Preferred Units were redeemed on January 13, 2006 as well. In accordance with EITF D-42, due to the redemption of the Series I Preferred Units, the initial offering costs associated with the issuance of the Series I Preferred Units of approximately
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$.7 million is reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per Unit for the three months ended March 31, 2006.
On December 9, 2005, the Company issues 1,250,000 shares of $.01 par value common stock (the “December 2005 Equity Offering”). The net proceeds of $48.8 million received from the December 2005 Equity Offering were contributed to the Operating Partnership in exchange for 1,250,000 Units and are reflected in the Operating Partnership’s financial statements as a general partner contribution.
On March 8, 2006, the Company declared a first quarter 2006 distribution of $.7000 per Unit on its Units which is payable on April 17, 2006. The Company also declared a first quarter 2006 dividend of $53.906 per Unit, on its Series C Preferred Units, totaling, in the aggregate, approximately $1.1 million, which is payable on March 31, 2006; a semi-annual dividend of $3,118 per Unit on its Series F Preferred Units, totaling, in the aggregate, approximately $1.6 million, which is payable on March 31, 2006; a semi-annual dividend of $3,618 per Unit on its Series G Preferred Units, totaling, in the aggregate, approximately $.9 million, which is payable on March 31, 2006; and a quarterly dividend of $3,927 per Unit on its Series J Preferred Units, totaling, in the aggregate, approximately $2.4 million, which is payable on March 31, 2006.
On January 10, 2006, the Consolidated Operating Partnership, issued $200 million of senior unsecured debt which matures on January 15, 2016 and bears a coupon interest rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. The Consolidated Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Consolidated Operating Partnership settled the interest rate protection agreements for a payment of approximately $1.7 million, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2016 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Consolidated Operating Partnership’s effective interest rate on the 2016 Notes is 5.91%. The 2016 Notes contain certain covenants, including limitations on incurrence of debt and debt service coverage.
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. Gross proceeds of $150 million, net of offering costs from the issuance of the Series J Preferred Stock which were contributed to the Operating Partnership in exchange for Series J Cumulative Preferred Units (the “Series J Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the Depositary Shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the Series J Preferred Stock is outstanding, the Company will increase the dividend on the Series J Preferred Stock to a rate of 8.25% of the liquidation preference per year. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. The Series J Preferred Stock is not redeemable prior to January 15, 2011. However, if at any time both (i) the Depositary Shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. On or after January 15, 2011, the Series J Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150.0 million in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
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Future Property Acquisitions, Developments and Property Sales
The Consolidated Operating Partnership has an active acquisition and development program through which it is continually engaged in identifying, negotiating and consummating portfolio and individual industrial property acquisitions and developments. As a result, the Consolidated Operating Partnership is currently engaged in negotiations relating to the possible acquisition and development of certain industrial properties located in the United States.
The Consolidated Operating Partnership also sells properties based on market conditions and property related factors. As a result, the Consolidated Operating Partnership is currently engaged in negotiations relating to the possible sales of certain industrial properties in the Consolidated Operating Partnership’s current portfolio.
When evaluating potential industrial property acquisitions and developments, as well as potential industrial property sales, the Consolidated Operating Partnership will consider such factors as: (i) the geographic area and type of property; (ii) the location, construction quality, condition and design of the property; (iii) the potential for capital appreciation of the property; (iv) the ability of the Consolidated Operating Partnership to improve the property’s performance through renovation; (v) the terms of tenant leases, including the potential for rent increases; (vi) the potential for economic growth and the tax and regulatory environment of the area in which the property is located; (vii) the potential for expansion of the physical layout of the property and/or the number of sites; (viii) the occupancy and demand by tenants for properties of a similar type in the vicinity; and (ix) competition from existing properties and the potential for the construction of new properties in the area.
INDUSTRY
Industrial properties are typically used for the design, assembly, packaging, storage and distribution of goods and/or the provision of services. As a result, the demand for industrial space in the United States is related to the level of economic output. Historically, occupancy rates for industrial property in the United States have been higher than those for other types of commercial property. The Consolidated Operating Partnership believes that the higher occupancy rate in the industrial property sector is a result of theconstruction-on-demand nature of, and the comparatively short development time required for, industrial property. For the five years ended December 31, 2005, the occupancy rates for industrial properties in the United States have ranged from 88.5%* to 92.9%*, with an occupancy rate of 90.4%* at December 31, 2005.
Risk Factors
The Consolidated Operating Partnership’s operations involve various risks that could adversely affect its financial condition, results of operations, cash flow, ability to pay distributions on its Units and the market value of its Units. These risks, among others contained in the Consolidated Operating Partnership’s other filings with the Securities and Exchange Commission, include:
Real estate investments’ value fluctuates depending on conditions in the general economy and the real estate business. These conditions may limit the Consolidated Operating Partnership’s revenues and available cash.
The factors that affect the value of the Consolidated Operating Partnership’s real estate and the revenues the Consolidated Operating Partnership derives from its properties include, among other things:
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| | • | general economic conditions; |
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| | • | local conditions such as oversupply or a reduction in demand in an area; |
* Source: Torto Wheaton Research
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| | • | the attractiveness of the properties to tenants; |
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| | • | tenant defaults; |
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| | • | zoning or other regulatory restrictions; |
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| | • | competition from other available real estate; |
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| | • | our ability to provide adequate maintenance and insurance; and |
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| | • | increased operating costs, including insurance premiums and real estate taxes. |
Many real estate costs are fixed, even if income from properties decreases.
The Consolidated Operating Partnership’s financial results depend on leasing space in the Consolidated Operating Partnership’s real estate to tenants on terms favorable to the Consolidated Operating Partnership. The Consolidated Operating Partnership’s income and funds available for distribution to its unitholders will decrease if a significant number of the Consolidated Operating Partnership’s tenants cannot pay their rent or the Consolidated Operating Partnership is unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, the Consolidated Operating Partnership might not be able to enforce its rights as landlord without delays and the Consolidated Operating Partnership might incur substantial legal costs. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment. For the year ended December 31, 2005, approximately 69.0% of the Consolidated Operating Partnership’s gross revenues from continuing operations came from rentals of real property.
The Consolidated Operating Partnership may be unable to sell properties when appropriate because real estate investments are not as liquid as certain other types of assets.
Real estate investments generally cannot be sold quickly and, therefore, will tend to limit the Consolidated Operating Partnership’s ability to adjust its property portfolio promptly in response to changes in economic or other conditions. The inability to respond promptly to changes in the performance of the Consolidated Operating Partnership’s property portfolio could adversely affect the Consolidated Operating Partnership’s financial condition and ability to service debt and make distributions to its unitholders. In addition, like other companies qualifying as REITs under the Internal Revenue Code, the Company must comply with the safe harbor rules relating to the number of properties disposed of in a year, their tax basis and the cost of improvements made to the properties, or meet other tests which enable a REIT to avoid punitive taxation on the sale of assets. Thus, the Consolidated Operating Partnership’s ability at any time to sell assets may be restricted.
The Consolidated Operating Partnership may be unable to sell or contribute properties on advantageous terms.
The Consolidated Operating Partnership has sold to third parties a significant number of properties in recent years and, as part of its business, the Consolidated Operating Partnership intends to continue to sell properties to third parties. The Consolidated Operating Partnership’s ability to sell properties on advantageous terms depends on factors beyond the Consolidated Operating Partnership’s control, including competition from other sellers and the availability of attractive financing for potential buyers of the Consolidated Operating Partnership’s properties. If the Consolidated Operating Partnership is unable to sell properties on favorable terms or redeploy the proceeds of property sales in accordance with the Consolidated Operating Partnership’s business strategy, then the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units could be adversely affected.
The Consolidated Operating Partnership has also sold to its joint ventures a significant number of properties in recent years and, as part of its business, the Consolidated Operating Partnership intends to continue to sell properties to its joint ventures as opportunities arise. If the Consolidated Operating Partnership
10
does not have sufficient properties available that meet the investment criteria of current or future joint ventures, or if the joint ventures have reduced or no access to capital on favorable terms, then such sales could be delayed or prevented, adversely affecting the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units.
The Consolidated Operating Partnership may be unable to acquire properties on advantageous terms or acquisitions may not perform as the Consolidated Operating Partnership expects.
The Consolidated Operating Partnership acquires and intends to continue to acquire primarily industrial properties. The acquisition of properties entails various risks, including the risks that the Consolidated Operating Partnership’s investments may not perform as expected and that the Consolidated Operating Partnership’s cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, the Consolidated Operating Partnership faces significant competition for attractive investment opportunities from other well-capitalized real estate investors, including both publicly-traded real estate investment trusts and private investors. This competition increases as investments in real estate become attractive relative to other forms of investment. As a result of competition, the Consolidated Operating Partnership may be unable to acquire additional properties as it desires or the purchase price may be elevated. In addition, the Consolidated Operating Partnership expects to finance future acquisitions through a combination of borrowings under the Consolidated Operating Partnership’s 2005 Unsecured Line of Credit I, proceeds from equity or debt offerings by the Consolidated Operating Partnership and proceeds from property sales, which may not be available and which could adversely affect the Consolidated Operating Partnership’s cash flow. Any of the above risks could adversely affect the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units.
The Consolidated Operating Partnership may be unable to complete development and re-development projects on advantageous terms.
As part of its business, the Consolidated Operating Partnership develops new and re-develops existing properties. In addition, the Consolidated Operating Partnership has sold to third parties or sold to the Company’s joint ventures a significant number of development and re-development properties in recent years and the Consolidated Operating Partnership intends to continue to sell such properties to third parties or to sell such properties to the Consolidated Operating Partnership’s joint ventures as opportunities arise. The real estate development and re-development business involves significant risks that could adversely affect the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units which include:
| | |
| | • | the Consolidated Operating Partnership may not be able to obtain financing for development projects on favorable terms and complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties and generating cash flow; |
| |
| | • | the Consolidated Operating Partnership may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations; |
| |
| | • | the properties may perform below anticipated levels, producing cash flow below budgeted amounts and limiting the Consolidated Operating Partnership’s ability to sell such properties to third parties or to sell or contribute such properties to the Consolidated Operating Partnership’s joint ventures. |
The Consolidated Operating Partnership may be unable to renew leases or find other lessees.
The Consolidated Operating Partnership is subject to the risks that, upon expiration, leases may not be renewed, the space subject to such leases may not be relet or the terms of renewal or reletting, including the cost of required renovations, may be less favorable than expiring lease terms. If the Consolidated Operating Partnership were unable to promptly renew a significant number of expiring leases or to promptly relet the
11
space covered by such leases, or if the rental rates upon renewal or reletting were significantly lower than the then current rates, the Consolidated Operating Partnership’s cash funds from operations and ability to make expected distributions to stockholders might be adversely affected. As of December 31, 2005, leases with respect to approximately 12.7 million, 9.6 million and 8.8 million square feet of GLA, representing 24%, 18% and 16%, of GLA expire in the remainder of 2006, 2007 and 2008, respectively.
The Company might fail to qualify or remain qualified as a REIT.
First Industrial Realty Trust, Inc. intends to operate so as to qualify as a REIT under the Internal Revenue Code of 1986 (the “Code”). Although First Industrial Realty Trust, Inc. believes that it is organized and will operate in a manner so as to qualify as a REIT, qualification as a REIT involves the satisfaction of numerous requirements, some of which must be met on a recurring basis. These requirements are established under highly technical and complex Code provisions of which there are only limited judicial or administrative interpretations and involve the determination of various factual matters and circumstances not entirely within First Industrial Realty Trust, Inc.’s control.
First Industrial Realty Trust, Inc. (through one of its subsidiary partnerships) entered into certain development agreements in 2000 through 2003, the performance of which has been completed. Under these agreements, First Industrial Realty Trust, Inc, provided services to unrelated third parties and certain payments were made by the unrelated third parties for services provided by certain contractors hired by First Industrial Realty Trust. Inc. First Industrial Realty Trust, Inc, believes that these payments were properly characterized by it as reimbursements for costs incurred by it on behalf of the third parties and do not constitute gross income and did not prevent First Industrial Realty Trust, Inc. from satisfying the gross income requirements of the REIT provisions (the “gross income tests”). First Industrial Realty Trust, Inc. has brought this matter to the attention of the Internal Revenue Service, or the IRS. The IRS has not challenged or expressed any interest in challenging First Industrial Realty Trust, Inc.’s view on this matter. If the IRS were to challenge such position and were successful, First Industrial Realty Trust Inc. might be found not to have satisfied the gross income tests in one or more of its taxable years. If First Industrial Realty Trust, Inc. were found not to have satisfied the gross income tests, it could be subject to a penalty tax. However, such noncompliance was due to reasonable cause and not to willful neglect, and certain other requirements are met. Although this cannot be assured, First Industrial Realty Trust, Inc. believes that the risk of losing its REIT status as a result of these development agreements is remote.
If First Industrial Realty Trust, Inc. were to fail to qualify as a REIT in any taxable year, it would be subject to federal income tax, including any applicable alternative minimum tax, on First its taxable income at corporate rates. This could result in a discontinuation or substantial reduction in dividends to stockholders and in cash to pay interest and principal on debt securities that First Industrial Realty Trust, Inc. issues. Unless entitled to relief under certain statutory provisions, First Industrial Realty Trust, Inc. also would be disqualified from electing treatment as a REIT for the four taxable years following the year during which it failed to qualify as a REIT.
Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.
As part of its business, the Consolidated Operating Partnership sells properties to third parties or sells properties to the Consolidated Operating Partnership’s joint ventures as opportunities arise. Under the Code, a 100% penalty tax could be assessed on the gain resulting from sales of properties that are deemed to be prohibited transactions. The question of what constitutes a prohibited transaction is based on the facts and circumstances surrounding each transaction. The Internal Revenue Service could contend that certain sales of properties by the Company are prohibited transactions. While the Consolidated Operating Partnership’s management does not believe that the Internal Revenue Service, would prevail in such a dispute, if the matter was successfully argued by the Internal Revenue Service, the 100% penalty tax could be assessed against the profits from these transactions. In addition, any income from a prohibited transaction may adversely affect the Company’s ability to satisfy the income tests for qualification as a REIT.
12
The REIT distribution requirements may require the Company to turn to external financing sources.
First Industrial Realty Trust, Inc. could, in certain instances, have taxable income without sufficient cash to enable First Industrial Realty Trust, Inc. to meet the distribution requirements of the REIT provisions of the Code. In that situation, the Company could be required to borrow funds or sell properties on adverse terms in order to meet those distribution requirements. In addition, because First Industrial Realty Trust, Inc. must distribute to its stockholders at least 90% of the Company’s REIT taxable income each year, the Company’s ability to accumulate capital may be limited. Thus, in connection with future acquisitions, First Industrial Realty Trust, Inc. may be more dependent on outside sources of financing, such as debt financing or issuances of additional capital stock, which may or may not be available on favorable terms. Additional debt financings may substantially increase the Consolidated Operating Partnership’s leverage and additional equity offerings may result in substantial dilution of unitholders’ interests.
Debt financing, the degree of leverage and rising interest rates could reduce the Consolidated Operating Partnership’s cash flow.
Where possible, the Consolidated Operating Partnership intends to continue to use leverage to increase the rate of return on the Consolidated Operating Partnership’s investments and to allow the Consolidated Operating Partnership to make more investments than it otherwise could. The Consolidated Operating Partnership’s use of leverage presents an additional element of risk in the event that the cash flow from the Consolidated Operating Partnership’s properties is insufficient to meet both debt payment obligations and the Company’s distribution requirements of the REIT provisions of the Code. In addition, rising interest rates would reduce the Consolidated Operating Partnership’s cash flow by increasing the amount of interest due on its floating rate debt and on its fixed rate debt as it matures and is refinanced.
Cross-collateralization of mortgage loans could result in foreclosure on substantially all of the Consolidated Operating Partnership’s properties if the Consolidated Operating Partnership is unable to service its indebtedness.
If the Operating Partnership decides to obtain additional debt financing in the future, it may do so through mortgages on some or all of its properties. These mortgages may be issued on a recourse, non-recourse or cross-collateralized basis. Cross-collateralization makes all of the subject properties available to the lender in order to satisfy the Consolidated Operating Partnership’s debt. Holders of indebtedness that is so secured will have a claim against these properties. To the extent indebtedness is cross collateralized, lenders may seek to foreclose upon properties that are not the primary collateral for their loan, which may, in turn, result in acceleration of other indebtedness secured by properties. Foreclosure of properties would result in a loss of income and asset value to the Consolidated Operating Partnership, making it difficult for it to meet both debt payment obligations and the Company’s distribution requirements of the REIT provisions of the Code. As of December 31, 2005, none of the Consolidated Operating Partnership’s current indebtedness was cross-collateralized.
The Consolidated Operating Partnership may have to make lump-sum payments on its existing indebtedness.
The Consolidated Operating Partnership is required to make the following lump-sum or “balloon” payments under the terms of some of its indebtedness, including:
| | |
| | • | $50 million aggregate principal amount of 7.75% Notes due 2032 (the “2032 Notes”) |
| |
| | • | $200 million aggregate principal amount of 7.60% Notes due 2028 (the “2028 Notes”) |
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| | • | approximately $15 million aggregate principal amount of 7.15% Notes due 2027 (the “2027 Notes”) |
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| | • | $100 million aggregate principal amount of 7.50% Notes due 2017 (the “2017 Notes”) |
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| | • | $200 million aggregate principal amount of 5.75% Notes due 2016 (the “2016 Notes”) |
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| | • | $125 million aggregate principal amount of 6.42% Notes due 2014 (the “2014 Notes”) |
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| | |
| | • | $200 million aggregate principal amount of 6.875% Notes due 2012 (the “2012 Notes”) |
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| | • | $200 million aggregate principal amount of 7.375% Notes due 2011(the “2011 Notes”) |
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| | • | $125 million aggregate principal amount of 5.25% Notes due 2009 (the “2009 Notes”) |
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| | • | $150 million aggregate principal amount of 7.60% Notes due 2007 (the “2007 Notes”) |
| |
| | • | $150 million aggregate principal amount of 7.00% Notes due 2006 (the “2006 Notes”) |
| |
| | • | a $500 million unsecured revolving credit facility (the “2005 Unsecured Line of Credit I”) under which the Consolidated Operating Partnership may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital. |
| |
| | • | a $125 million unsecured non-revolving credit facility (the “2005 Unsecured Line of Credit II”, together with the 2005 Unsecured Line of Credit I, the “Unsecured Lines of Credit”) under which the Consolidated Operating Partnership may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital. |
The 2005 Unsecured Line of Credit I and the 2005 Unsecured Line of Credit II provide for the repayment of principal in a lump-sum or “balloon” payment at maturity in 2008 and 2006, respectively. The Operating Partnership has the right, subject to certain conditions, to increase the aggregate commitment under the Unsecured Line of Credit I by up to $100 million. As of December 31, 2005, $457.5 million was outstanding under the 2005 Unsecured Lines of Credit at a weighted average interest rate of 4.886%.
The Consolidated Operating Partnership’s ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on its ability either to refinance the applicable indebtedness or to sell properties. The Consolidated Operating Partnership has no commitments to refinance the 2006 Notes, the 2007 Notes, the 2009 Notes, the 2011 Notes, the 2012 Notes, the 2014 Notes, the 2016 Notes, the 2017 Notes, the 2027 Notes, the 2028 Notes, the 2032 Notes or the Unsecured Lines of Credit. Some of the existing debt obligations, other than those discussed above, of the Consolidated Operating Partnership, are secured by the Consolidated Operating Partnership’s properties, and therefore such obligations will permit the lender to foreclose on those properties in the event of a default.
There is no limitation on debt in the Consolidated Operating Partnership’s organizational documents.
As of December 31, 2005, the Company’s ratio of debt to its total market capitalization was 44.3%. The organizational documents of First Industrial Realty Trust, Inc., however, do not contain any limitation on the amount or percentage of indebtedness the Company may incur. Accordingly, the Consolidated Operating Partnership could become more highly leveraged, resulting in an increase in debt service that could adversely affect the Consolidated Operating Partnership’s ability to make expected distributions to Unitholders and in an increased risk of default on the Consolidated Operating Partnership’s obligations.
The Company computes that percentage by calculating its total consolidated debt as a percentage of the aggregate market value of all outstanding shares of the Company’s common stock, assuming the exchange of all limited partnership units of the Operating Partnership for common stock, plus the aggregate stated value of all outstanding shares of preferred stock and total consolidated debt.
Rising interest rates on the Consolidated Operating Partnership’s Unsecured Line of Credit could decrease the Consolidated Operating Partnership’s available cash.
The Consolidated Operating Partnership’s Unsecured Line of Credit bears interest at a floating rate. As of December 31, 2005, the Company’s Unsecured Lines of Credit had an outstanding balance of $457.5 million at a weighted average interest rate of 4.886%. The Consolidated Operating Partnership’s Unsecured Lines of Credit bear interest at the Prime Rate or at the London Interbank Offered Rate plus .625%. Based on an outstanding balance on our Unsecured Lines of Credit as of December 31, 2005, a 10% increase in interest rates would increase interest expense by $2.3 million on an annual basis. Increases in the interest rate payable
14
on balances outstanding under the Unsecured Lines of Credit would decrease the Consolidated Operating Partnership’s cash available for distribution to unitholders.
Earnings and cash dividends, asset value and market interest rates affect the price of the Company’s common stock.
As a real estate investment trust, the market value of the Company’s common stock, in general, is based primarily upon the market’s perception of the Company’s growth potential and its current and potential future earnings and cash dividends. The market value of the Company’s common stock is based secondarily upon the market value of the Company’s underlying real estate assets. For this reason, shares of the Company’s common stock may trade at prices that are higher or lower than the Company’s net asset value per share. To the extent that the Company retains operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of the Company’s underlying assets, may not correspondingly increase the market price of the Company’s common stock. The Company’s failure to meet the market’s expectations with regard to future earnings and cash dividends likely would adversely affect the market price of the Company’s common stock. Further, the distribution yield on the common stock (as a percentage of the price of the common stock) relative to market interest rates may also influence the price of the Company’s common stock. An increase in market interest rates might lead prospective purchasers of the Company’s common stock to expect a higher distribution yield, which would adversely affect the market price of the Company’s common stock. Additionally, if the market price of the Company’s common stock declines significantly, then the Company might breach certain covenants with respect to its debt obligations, which could adversely affect the Company’s liquidity and ability to make future acquisitions and the Company’s ability to pay dividends to its stockholders.
The Consolidated Operating Partnership may incur unanticipated costs and liabilities due to environmental problems.
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs ofclean-up of certain conditions relating to the presence of hazardous or toxic materials on, in or emanating from a property, and any related damages to natural resources. Environmental laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic materials. The presence of such materials, or the failure to address those conditions properly, may adversely affect the ability to rent or sell the property or to borrow using the property as collateral. Persons who dispose of or arrange for the disposal or treatment of hazardous or toxic materials may also be liable for the costs ofclean-up of such materials, or for related natural resource damages, at or from an off-site disposal or treatment facility, whether or not the facility is owned or operated by those persons. No assurance can be given that existing environmental assessments with respect to any of the Consolidated Operating Partnership’s properties reveal all environmental liabilities, that any prior owner or operator of any of the properties did not create any material environmental condition not known to the Consolidated Operating Partnership or that a material environmental condition does not otherwise exist as to any of the Consolidated Operating Partnership’s properties.
The Consolidated Operating Partnership’s insurance coverage does not include all potential losses.
The Consolidated Operating Partnership currently carries comprehensive insurance coverage including property, boiler & machinery, liability, fire, flood, terrorism, earthquake, extended coverage and rental loss as appropriate for the markets where each of the Consolidated Operating Partnership’s properties and their business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties and business activities. The Consolidated Operating Partnership believes its properties are adequately insured. However, there are certain losses, including losses from earthquakes, hurricanes, floods, pollution, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed to be economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of the Consolidated Operating Partnership’s properties, the Consolidated Operating Partnership could
15
experience a significant loss of capital invested and potential revenues in these properties, and could potentially remain obligated under any recourse debt associated with the property.
The Consolidated Operating Partnership is subject to risks and liabilities in connection with its investments in properties through joint ventures.
As of December 31, 2005, the Consolidated Operating Partnership’s five joint ventures owned approximately 24.3 million square feet of properties. As of December 31, 2005, the Consolidated Operating Partnership ’s investment in joint ventures exceeded $44 million in the aggregate and for the year ended December 31, 2005 the Consolidated Operating Partnership’s equity in income of joint ventures exceeded $3.6 million. The Consolidated Operating Partnership’s organizational documents do not limit the amount of available funds that the Consolidated Operating Partnership may invest in joint ventures and the Consolidated Operating Partnership intends to continue to develop and acquire properties through joint ventures with other persons or entities when warranted by the circumstances. Joint venture investments, in general, involve certain risks, including:
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| | • | co-members or joint venturers may share certain approval rights over major decisions; |
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| | • | if co-members or joint venturers fail to fund their share of any required capital commitments; |
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| | • | co-members or joint venturers might have economic or other business interests or goals that are inconsistent with the Consolidated Operating Partnership’s business interests or goals that would affect its ability to operate the property; |
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| | • | co-members or joint venturers may have the power to act contrary to the Consolidated Operating Partnership’s instructions, requests, policies, or objectives, including our current policy with respect to maintaining our qualification as a real estate investment trust; |
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| | • | the joint venture agreements often restrict the transfer of a member’s or joint venturer’s interest or “buy-sell” or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms; |
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| | • | disputes between the Consolidated Operating Partnership and our co-members or joint venturers may result in litigation or arbitration that would increase the Consolidated Operating Partnership’s expenses and prevent its officers and directors from focusing their time and effort on the Consolidated Operating Partnership’s business and result in subjecting the properties owned by the applicable joint venture to additional risk; and |
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| | • | the Consolidated Operating Partnership may in certain circumstances be liable for the actions of ourco-members or joint venturers. |
The occurrence of one or more of the events described above could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock.
In addition, joint venture investments in real estate involve all of the risks related to the ownership, acquisition, development, sale and financing of real estate discussed in the risk factors above. To the extent the Company’s investments in joint ventures are adversely affected by such risks, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock could be adversely affected.
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| Item 1B. | Unresolved SEC Comments |
None.
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General
At December 31, 2005, the Consolidated Operating Partnership and the Other Real Estate Partnerships owned 884 in-service industrial properties (786 of which were owned by the Consolidated Operating Partnership and 98 of which were owned by the Other Real Estate Partnerships) containing an aggregate of approximately 70.2 million square feet of GLA (61.7 million square feet of which comprised the properties owned by the Consolidated Operating Partnership and 8.5 million square feet of which comprised the properties owned by the Other Real Estate Partnerships) in 29 states and one province in Canada, with a diverse base of more than 2,600 tenants engaged in a wide variety of businesses, including manufacturing, retail, wholesale trade, distribution and professional services. The properties are generally located in business parks that have convenient access to interstate highways and/or rail and air transportation. The weighted average age of the Consolidated Operating Partnership’s and the Other Real Estate Partnerships’ properties on a combined basis as of December 31, 2005 was approximately 19 years. The Consolidated Operating Partnership and Other Real Estate Partnerships maintain insurance on their respective properties that the Consolidated Operating Partnership and Other Real Estate Partnerships believe is adequate.
The Consolidated Operating Partnership and the Other Real Estate Partnerships classify their properties into five industrial categories: light industrial, bulk warehouse, R&D/flex, regional warehouse and manufacturing. While some properties may have characteristics which fall under more than one property type, the Consolidated Operating Partnership and the Other Real Estate Partnerships have used what they believe is the most dominant characteristic to categorize the property.
The following describes the different industrial categories:
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| | • | Light industrial properties generally are of less than 100,000 square feet, have a ceiling height of 16 to 21 feet, are comprised of 5% — 50% of office space, contain less than 50% of manufacturing space and have a land use ratio of 4:1. The land use ratio is the ratio of the total property area to that which is occupied by the building. |
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| | • | Bulk warehouse buildings generally are of more than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% — 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1. |
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| | • | R&D/flex buildings generally are of less than 100,000 square feet, have a ceiling height of less than 16 feet, are comprised of 50% or more of office space, contain less than 25% of manufacturing space and have a land use ratio of 4:1. |
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| | • | Regional warehouses generally are of less than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% — 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1. |
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| | • | Manufacturing properties are a diverse category of buildings that generally have a ceiling height of 10 — 18 feet, are comprised of 5% — 15% of office space, contain at least 50% of manufacturing space and have a land use ratio of 4:1. |
17
The following tables summarize certain information as of December 31, 2005 with respect to the in-service properties owned by the Consolidated Operating Partnership, each of which is wholly-owned.
Consolidated Operating Partnership
Property Summary
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Light Industrial | | | R&D/Flex | | | Bulk Warehouse | | | Regional Warehouse | | | Manufacturing | |
| | | | | | Number of
| | | | | | Number of
| | | | | | Number of
| | | | | | Number of
| | | | | | Number of
| |
Metropolitan Area | | GLA | | | Properties | | | GLA | | | Properties | | | GLA | | | Properties | | | GLA | | | Properties | | | GLA | | | Properties | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Atlanta, GA(j) | | | 710,554 | | | | 12 | | | | 140,538 | | | | 3 | | | | 2,997,621 | | | | 12 | | | | 293,646 | | | | 4 | | | | 1,060,600 | | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Baltimore, MD((e) | | | 778,522 | | | | 13 | | | | 87,415 | | | | 3 | | | | 1,373,430 | | | | 6 | | | | — | | | | — | | | | 171,000 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Central Pennsylvania (f) | | | 146,990 | | | | 2 | | | | — | | | | — | | | | 701,000 | | | | 3 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chicago, IL | | | 1,004,748 | | | | 17 | | | | 247,447 | | | | 4 | | | | 2,163,175 | | | | 11 | | | | 159,252 | | | | 3 | | | | 589,000 | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cincinnati, OH | | | 443,039 | | | | 5 | | | | — | | | | — | | | | 2,042,555 | | | | 10 | | | | 450,797 | | | | 7 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cleveland, OH | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 462,000 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Columbus, OH | | | 217,612 | | | | 2 | | | | — | | | | — | | | | 2,235,140 | | | | 6 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dallas, TX | | | 1,925,213 | | | | 49 | | | | 492,503 | | | | 20 | | | | 2,406,171 | | | | 18 | | | | 843,232 | | | | 13 | | | | 224,984 | | | | 2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Denver, CO | | | 1,551,926 | | | | 30 | | | | 1,414,101 | | | | 35 | | | | 1,201,573 | | | | 7 | | | | 526,723 | | | | 8 | | | | 126,384 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Des Moines, IA | | | — | | | | — | | | | — | | | | — | | | | 150,444 | | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Detroit, MI | | | 2,062,870 | | | | 82 | | | | 464,026 | | | | 15 | | | | 370,808 | | | | 4 | | | | 747,978 | | | | 17 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Grand Rapids, MI | | | 61,250 | | | | 1 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Houston, TX | | | 741,042 | | | | 8 | | | | 201,363 | | | | 3 | | | | 2,233,064 | | | | 13 | | | | 437,088 | | | | 6 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Indianapolis, IN (c,h,l) | | | 1,064,808 | | | | 21 | | | | 118,200 | | | | 5 | | | | 2,346,653 | | | | 11 | | | | 303,610 | | | | 8 | | | | 71,600 | | | | 2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Los Angeles, CA(b) | | | 153,353 | | | | 5 | | | | — | | | | — | | | | 846,004 | | | | 4 | | | | 43,676 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Louisville, KY | | | — | | | | — | | | | — | | | | — | | | | 443,500 | | | | 2 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Milwaukee, WI | | | 274,223 | | | | 5 | | | | | | | | | | | | 1,579,569 | | | | 8 | | | | 80,682 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Minneapolis/St. Paul, MN (d,i) | | | 1,152,387 | | | | 18 | | | | 738,099 | | | | 10 | | | | 1,902,386 | | | | 9 | | | | 201,813 | | | | 2 | | | | 525,005 | | | | 8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nashville, TN | | | 273,843 | | | | 5 | | | | — | | | | — | | | | 1,047,265 | | | | 6 | | | | — | | | | — | | | | 330,458 | | | | 2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| N. New Jersey | | | 1,007,039 | | | | 18 | | | | 413,167 | | | | 7 | | | | 555,205 | | | | 4 | | | | 150,985 | | | | 2 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Philadelphia, PA | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 21,512 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Phoenix, AZ | | | 135,415 | | | | 6 | | | | — | | | | — | | | | 631,000 | | | | 2 | | | | 469,923 | | | | 6 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portland, OR | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 36,000 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Raleigh, NC | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 160,120 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salt Lake City, UT | | | 478,782 | | | | 32 | | | | 146,937 | | | | 6 | | | | 324,568 | | | | 2 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| San Diego, CA | | | 65,755 | | | | 1 | | | | — | | | | — | | | | 397,760 | | | | 2 | | | | 318,106 | | | | 9 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| S. New Jersey(k) | | | 1,317,055 | | | | 21 | | | | 23,050 | | | | 1 | | | | — | | | | — | | | | 118,496 | | | | 2 | | | | 22,738 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| St. Louis, MO | | | 355,535 | | | | 5 | | | | — | | | | — | | | | 866,072 | | | | 6 | | | | 96,392 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tampa, FL(h) | | | 493,029 | | | | 12 | | | | 608,921 | | | | 23 | | | | 209,500 | | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Totonto, ON | | | 57,540 | | | | 1 | | | | — | | | | — | | | | 279,000 | | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other(a) | | | 60,000 | | | | 2 | | | | — | | | | — | | | | 1,648,866 | | | | 9 | | | | 50,000 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | 16,532,530 | | | | 373 | | | | 5,095,767 | | | | 135 | | | | 30,952,329 | | | | 158 | | | | 5,313,911 | | | | 92 | | | | 3,779,889 | | | | 28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (a) | | Properties are located in Wichita, KS, McAllen, TX, Malvern, AK, Kansas City, MO, San Antonio, TX, Byhalia, MS, Birmingham, AL, Shreveport, LA and Greenville, SC. |
| |
| (b) | | One property collateralizes a $5.3 million mortgage loan which matures on December 1, 2019. |
| |
| (c) | | Twelve properties collateralize a $2.3 million mortgage loan which matures on September 1, 2009. |
| |
| (d) | | One property collateralizes a $5.5 million mortgage loan which matures on December 1, 2019. |
| |
| (e) | | One property collateralizes a $1.9 million mortgage loan which matures on October 1, 2006. |
| |
| (f) | | One property collateralizes a $15.7 million mortgage loan which matures on December 1, 2010. |
| |
| (g) | | Six properties collateralize a $6.4 million mortgage loan which matures on July 1, 2009. |
| |
| (h) | | One property collateralizes a $1.8 million mortgage loan which matures on January 1, 2013. |
| |
| (i) | | One property collateralizes a $2.0 million mortgage loan which matures on September 30, 2024. |
| |
| (j) | | One property collateralizes a $3.2 million mortgage loan which matures on May 1, 2016. |
| |
| (k) | | One property collateralizes a $7.1 million mortgage loan which matures on March 1, 2011. |
| |
| (l) | | One property collateralizes a $2.5 million mortgage loan which matures on January 1, 2012. |
18
In addition to the above mortgage loans, the Consolidated Operating Partnership has a $1.2 million mortgage loan collateralized by one land parcel (not shown above) in Nashville, TN which matured on January 12, 2006 which the Consolidated Operating Partnership paid off and retired on the maturity date.
Consolidated Operating Partnership
Property Summary Totals
| | | | | | | | | | | | | | | | | |
| | | Totals | |
| | | | | | | | | Average
| | | GLA as a %
| |
| | | | | | Number of
| | | Occupancy at
| | | of Total
| |
Metropolitan Area | | GLA | | | Properties(b) | | | 12/31/05(b) | | | Portfolio(b) | |
| |
| Atlanta, GA | | | 5,202,959 | | | | 36 | | | | 86 | % | | | 8.4 | % |
| Baltimore, MD | | | 2,410,367 | | | | 23 | | | | 96 | % | | | 3.9 | % |
| Central Pennsylvania | | | 847,990 | | | | 5 | | | | 100 | % | | | 1.37 | % |
| Chicago, IL | | | 4,163,622 | | | | 38 | | | | 85 | % | | | 6.8 | % |
| Cincinnati, OH | | | 2,936,391 | | | | 22 | | | | 94 | % | | | 4.8 | % |
| Cleveland, OH | | | 462,000 | | | | 1 | | | | 100 | % | | | 0.7 | % |
| Columbus, OH | | | 2,452,752 | | | | 8 | | | | 95 | % | | | 4.0 | % |
| Dallas, TX | | | 5,892,103 | | | | 102 | | | | 89 | % | | | 9.6 | % |
| Denver, CO | | | 4,820,707 | | | | 81 | | | | 93 | % | | | 7.8 | % |
| Des Moines, IA | | | 150,444 | | | | 1 | | | | 100 | % | | | 0.2 | % |
| Detroit, MI | | | 3,645,682 | | | | 118 | | | | 90 | % | | | 5.9 | % |
| Grand Rapids, MI | | | 61,250 | | | | 1 | | | | 100 | % | | | 0.1 | % |
| Houston, TX | | | 3,612,557 | | | | 30 | | | | 94 | % | | | 5.9 | % |
| Indianapolis, IN | | | 3,904,871 | | | | 47 | | | | 93 | % | | | 6.3 | % |
| Los Angeles, CA | | | 1,043,033 | | | | 10 | | | | 99 | % | | | 1.7 | % |
| Louisville, KY | | | 443,500 | | | | 2 | | | | 89 | % | | | 0.7 | % |
| Milwaukee, WI | | | 1,934,474 | | | | 14 | | | | 98 | % | | | 3.1 | % |
| Minneapolis/St. Paul, MN | | | 4,519,690 | | | | 47 | | | | 91 | % | | | 7.3 | % |
| Nashville, TN | | | 1,651,566 | | | | 13 | | | | 91 | % | | | 2.7 | % |
| N. New Jersey | | | 2,126,396 | | | | 31 | | | | 92 | % | | | 3.4 | % |
| Philadelphia, PA | | | 21,512 | | | | 1 | | | | 100 | % | | | 0.0 | % |
| Phoenix, AZ | | | 1,236,338 | | | | 14 | | | | 90 | % | | | 2.0 | % |
| Portland, OR | | | 36,000 | | | | 1 | | | | 100 | % | | | 0.1 | % |
| Raleigh, NC | | | 397,120 | | | | 2 | | | | 100 | % | | | 0.6 | % |
| Salt Lake City, UT | | | 950,287 | | | | 40 | | | | 94 | % | | | 1.5 | % |
| San Diego, CA | | | 781,621 | | | | 12 | | | | 80 | % | | | 1.3 | % |
| S. New Jersey | | | 1,481,339 | | | | 25 | | | | 100 | % | | | 2.4 | % |
| St. Louis, MO | | | 1,317,999 | | | | 12 | | | | 95 | % | | | 2.1 | % |
| Tampa, FL | | | 1,311,450 | | | | 36 | | | | 88 | % | | | 2.1 | % |
| Toronto, ON | | | 336,540 | | | | 2 | | | | 100 | % | | | 0.5 | % |
| Other(a) | | | 1,521,866 | | | | 11 | | | | 100 | % | | | 2.5 | % |
| | | | | | | | | | | | | | | | | |
| Total or Average | | | 61,674,426 | | | | 786 | | | | 92 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | | |
| | |
| (a) | | Properties are located in Wichita, KS, McAllen, TX, Malvern, AK, Kansas City, MO, San Antonio, TX, Byhalia, MS, Birmingham, AL, Shreveport, LA and Greenville, SC. |
| |
| (b) | | Includes only in-service properties. |
19
Other Real Estate Partnerships
Property Summary
The following tables summarize certain information as of December 31, 2005 with respect to thein-service properties owned by the Other Real Estate Partnerships, each of which is wholly-owned.
Property Summary
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Light Industrial | | | R&D/Flex | | | Bulk Warehouse | | | Regional Warehouse | | | Manufacturing | |
| | | | | | Number of
| | | | | | Number of
| | | | | | Number of
| | | | | | Number of
| | | | | | Number of
| |
Metropolitan Area | | GLA | | | Properties | | | GLA | | | Properties | | | GLA | | | Properties | | | GLA | | | Properties | | | GLA | | | Properties | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Atlanta, GA | | | — | | | | — | | | | 109,294 | | | | 3 | | | | 237,338 | | | | 2 | | | | 90,289 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Baltimore, MD | | | 152,904 | | | | 2 | | | | 82,245 | | | | 2 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Central Pennsylvania | | | 715,240 | | | | 5 | | | | — | | | | — | | | | 300,000 | | | | 1 | | | | 117,599 | | | | 3 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chicago, IL | | | 265,313 | | | | 3 | | | | — | | | | — | | | | 390,432 | | | | 2 | | | | 50,009 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Denver, CO | | | — | | | | — | | | | — | | | | — | | | | 110,400 | | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Des Moines, IA | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 88,000 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Detroit, MI | | | 340,347 | | | | 6 | | | | 23,392 | | | | 1 | | | | 160,035 | | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Indianapolis, IN | | | — | | | | — | | | | — | | | | — | | | | 1,527,127 | | | | 5 | | | | 60,000 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Los Angeles, CA | | | 86,084 | | | | 3 | | | | 18,921 | | | | 4 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Milwaukee, WI | | | — | | | | — | | | | 93,705 | | | | 2 | | | | 100,520 | | | | 1 | | | | 39,468 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Minneapolis/St. Paul, MN | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 532,119 | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nashville, TN | | | — | | | | — | | | | — | | | | — | | | | 160,661 | | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| N. New Jersey | | | 194,157 | | | | 3 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Philadelphia, PA | | | 1,030,494 | | | | 21 | | | | 126,692 | | | | 5 | | | | 221,937 | | | | 2 | | | | 139,316 | | | | 2 | | | | 30,000 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| S. New Jersey | | | 45,770 | | | | 1 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| St. Louis, MO | | | — | | | | — | | | | — | | | | — | | | | 245,000 | | | | 2 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tampa, FL | | | — | | | | — | | | | 44,427 | | | | 1 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other(a) | | | 99,000 | | | | 3 | | | | — | | | | — | | | | 490,500 | | | | 1 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | 2,929,309 | | | | 47 | | | | 498,676 | | | | 18 | | | | 3,943,950 | | | | 19 | | | | 584,681 | | | | 10 | | | | 562,119 | | | | 4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (a) | | Properties are located in Austin, TX and Sparks, NV. |
20
Other Real Estate Partnerships
Property Summary Totals
| | | | | | | | | | | | | | | | | |
| | | Totals | |
| | | | | | | | | Average
| | | GLA as a %
| |
| | | | | | Number of
| | | Occupancy at
| | | of Total
| |
Metropolitan Area | | GLA | | | Properties(b) | | | 12/31/05(b) | | | Portfolio(b) | |
| |
| Atlanta, GA | | | 436,921 | | | | 6 | | | | 94 | % | | | 5.1 | % |
| Baltimore, MD | | | 235,149 | | | | 4 | | | | 94 | % | | | 2.8 | % |
| Central Pennsylvania | | | 1,132,839 | | | | 9 | | | | 99 | % | | | 13.3 | % |
| Chicago, IL | | | 705,754 | | | | 6 | | | | 87 | % | | | 8.3 | % |
| Denver, CO | | | 110,400 | | | | 1 | | | | 93 | % | | | 1.3 | % |
| Des Moines, IA | | | 88,000 | | | | 1 | | | | 87 | % | | | 1.0 | % |
| Detroit, MI | | | 523,774 | | | | 8 | | | | 91 | % | | | 6.1 | % |
| Indianapolis, IN | | | 1,587,127 | | | | 6 | | | | 92 | % | | | 18.6 | % |
| Los Angeles, CA | | | 105,005 | | | | 7 | | | | 99 | % | | | 1.2 | % |
| Milwaukee, WI | | | 233,693 | | | | 4 | | | | 98 | % | | | 2.7 | % |
| Minneapolis/St. Paul, MN | | | 532,119 | | | | 3 | | | | 92 | % | | | 6.2 | % |
| Nashville, TN | | | 160,661 | | | | 1 | | | | 92 | % | | | 1.9 | % |
| N. New Jersey | | | 194,157 | | | | 3 | | | | 92 | % | | | 2.3 | % |
| Philadelphia, PA | | | 1,548,439 | | | | 31 | | | | 98 | % | | | 18.2 | % |
| S. New Jersey | | | 45,770 | | | | 1 | | | | 100 | % | | | 0.5 | % |
| St. Louis, MO | | | 245,000 | | | | 2 | | | | 96 | % | | | 2.9 | % |
| Tampa, FL | | | 44,427 | | | | 1 | | | | 88 | % | | | 0.5 | % |
| Other(a) | | | 589,500 | | | | 4 | | | | 100 | % | | | 6.9 | % |
| | | | | | | | | | | | | | | | | |
| Total or Average | | | 8,518,735 | | | | 98 | | | | 92 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | | |
| | |
| (a) | | Properties are located in Austin, TX and Sparks, NV. |
| |
| (b) | | Includes only in-service properties. |
Property Acquisition Activity
During 2005, the Consolidated Operating Partnership acquired 149 industrial properties totaling approximately 18.4 million square feet of GLA at a total purchase price of approximately $661.3 million, or approximately $35.94 per square foot. The Consolidated Operating Partnership also purchased several land parcels for an aggregate purchase price of approximately $29.3 million. The 149 industrial properties acquired have the following characteristics
| | | | | | | | | | | | | | | |
| | | | | | | | | | | Average
| |
| | | Number
| | | | | | | | Occupancy
| |
Metropolitan Area | | of Properties | | | GLA | | | Property Type | | at 12/31/05(c) | |
| |
| Indianapolis, IN(a) | | | 1 | | | | 286,555 | | | Bulk Warehouse | | | N/A | |
| San Diego, CA | | | 1 | | | | 111,920 | | | Bulk Warehouse | | | N/A | |
| Nashville, TN | | | 1 | | | | 177,004 | | | Bulk Warehouse | | | 100 | % |
| Cincinnati, OH | | | 1 | | | | 176,000 | | | Bulk Warehouse | | | N/A | |
| Dallas, TX | | | 1 | | | | 99,831 | | | Light Industrial | | | N/A | |
| Central PA(a) | | | 1 | | | | 249,600 | | | Bulk Warehouse | | | N/A | |
| Chicago, IL | | | 1 | | | | 97,450 | | | Light Industrial | | | N/A | |
| Dallas, TX(a) | | | 1 | | | | 73,986 | | | Light Industrial | | | N/A | |
| Houston, TX(a) | | | 1 | | | | 74,716 | | | Light Industrial | | | N/A | |
| Milwaukee, WI | | | 4 | | | | 368,462 | | | Light Industrial & Bulk Warehouse | | | 89 | % |
| Minneapolis, MN | | | 1 | | | | 83,285 | | | R&D/Flex | | | 100 | % |
| Des Moines(a) | | | 1 | | | | 90,000 | | | Regional Warehouse | | | N/A | |
21
| | | | | | | | | | | | | | | |
| | | | | | | | | | | Average
| |
| | | Number
| | | | | | | | Occupancy
| |
Metropolitan Area | | of Properties | | | GLA | | | Property Type | | at 12/31/05(c) | |
| |
| Des Moines(a) | | | 1 | | | | 200,000 | | | Bulk Warehouse | | | N/A | |
| Des Moines(a) | | | 1 | | | | 131,169 | | | Manufacturing | | | N/A | |
| Indianapolis | | | 1 | | | | 260,400 | | | Bulk Warehouse | | | 100 | % |
| Houston | | | 1 | | | | 200,000 | | | Bulk Warehouse | | | 100 | % |
| Phoenix, Chicago | | | 3 | | | | 371,000 | | | Regional & Bulk Warehouse | | | 100 | % |
| Des Moines(a) | | | 1 | | | | 400,000 | | | Bulk Warehouse | | | N/A | |
| Phoenix, AZ(a) | | | 1 | | | | 56,801 | | | Light Industrial | | | N/A | |
| Milwaukee, WI(a) | | | 1 | | | | 160,000 | | | Bulk Warehouse | | | N/A | |
| Dallas, TX(a) | | | 1 | | | | 395,970 | | | Bulk Warehouse | | | N/A | |
| Denver, CO | | | 1 | | | | 36,828 | | | Light Industrial | | | 100 | % |
| Dallas, TX | | | 1 | | | | 41,019 | | | Light Industrial | | | 100 | % |
| Baltimore, MD | | | 4 | | | | 115,985 | | | R&D/Flex | | | 87 | % |
| Minneapolis, MN | | | 1 | | | | 413,239 | | | Light Industrial | | | N/A | |
| Phoenix, AZ | | | 3 | | | | 384,683 | | | Bulk Warehouse | | | N/A | |
| Detroit, MI | | | 1 | | | | 55,000 | | | Light Industrial | | | N/A | |
| Atlanta, GA & Columbus, OH | | | 3 | | | | 720,953 | | | Bulk Warehouse | | | 100 | % |
| Atlanta, GA | | | 1 | | | | 90,000 | | | Light Industrial | | | 100 | % |
| Chicago, IL(a) | | | 1 | | | | 74,960 | | | Manufacturing | | | N/A | |
| Detroit, MI | | | 1 | | | | 53,550 | | | Light Industrial | | | 100 | % |
| Milwaukee, WI | | | 1 | | | | 44,342 | | | Light Industrial | | | 100 | % |
| S. New Jersey | | | 1 | | | | 355,000 | | | R&D/Flex/Light Industrial | | | 100 | % |
| Cincinnati, OH | | | 1 | | | | 175,250 | | | Light Industrial | | | N/A | |
| Los Angeles, CA | | | 2 | | | | 119,104 | | | Light Industrial | | | N/A | |
| Dallas/ Chicago/ Minneapolis | | | 18 | | | | 2,432,884 | | | Light Industrial, R&D/Flex, Regional & Bulk Warehouse | | | 99 | % |
| Los Angeles, CA(a) | | | 1 | | | | 33,145 | | | Light Industrial | | | N/A | |
| Atlanta, GA | | | 1 | | | | 152,819 | | | Bulk Warehouse | | | 100 | % |
| Orlando, FL | | | 1 | | | | 78,997 | | | Light Industrial | | | N/A | |
| Chicago, IL | | | 2 | | | | 303,760 | | | Bulk Warehouse | | | 100 | % |
| Chicago, IL | | | 1 | | | | 35,000 | | | Regional Warehouse | | | 100 | % |
| Detroit, MI | | | 3 | | | | 138,103 | | | Light Industrial | | | 100 | % |
| Detroit, MI | | | 1 | | | | 116,937 | | | Bulk Warehouse | | | N/A | |
| Nashville, TN | | | 1 | | | | 535,000 | | | Bulk Warehouse | | | 100 | % |
| Detroit, MI | | | 1 | | | | 18,550 | | | R&D/Flex | | | N/A | |
| Milwaukee/Cincinnati | | | 13 | | | | 1,556,659 | | | Light Industrial/Regional & Bulk Warehouse | | | 100 | % |
| Atlanta, GA | | | 2 | | | | 110,529 | | | Light Industrial | | | 90 | % |
| Central PA | | | 1 | | | | 81,600 | | | Light Industrial | | | 100 | % |
| Dallas, TX | | | 1 | | | | 48,118 | | | Regional Warehouse | | | N/A | |
| Central PA | | | 1 | | | | 106,637 | | | Bulk Warehouse | | | N/A | |
| Various | | | 20 | | | | 3,591,433 | | | Lt Ind/R&D Flex/Mfg/Reg & Bulk Whse | | | 100 | % |
| Milwaukee, WI | | | 1 | | | | 36,608 | | | Light Industrial | | | N/A | |
| Nashville, TN | | | 1 | | | | 51,528 | | | Regional Warehouse | | | N/A | |
| Detroit, MI | | | 1 | | | | 40,000 | | | Light Industrial | | | 100 | % |
| Indianapolis, IN | | | 5 | | | | 325,379 | | | Light Industrial/R&D Flex/Regional Warehouse | | | 100 | % |
| Houston, TX | | | 1 | | | | 38,950 | | | R&D/Flex | | | N/A | |
| Houston, TX | | | 1 | | | | 31,540 | | | R&D/Flex | | | N/A | |
| Los Angeles, CA | | | 1 | | | | 70,000 | | | Light Industrial | | | 95 | % |
| Atlanta, GA | | | 2 | | | | 287,600 | | | Light Industrial/Bulk Warehouse | | | 100 | % |
| Denver, CO | | | 1 | | | | 126,384 | | | Manufacturing | | | 100 | % |
| Tampa, FL | | | 1 | | | | 209,500 | | | Bulk Warehouse | | | 100 | % |
| Detroit, MI | | | 1 | | | | 88,700 | | | Light Industrial | | | N/A | |
| Baltimore, MD(b) | | | 16 | | | | 951,820 | | | Light Industrial/R&D Flex | | | 95 | % |
| San Diego, CA | | | 1 | | | | 65,755 | | | Light Industrial | | | 100 | % |
| | | | | | | | | | | | | | | |
| | | | 149 | | | | 18,407,997 | | | | | | | |
| | | | | | | | | | | | | | | |
| | |
| (a) | | Property was sold in 2005. |
22
| | |
| (b) | | Property acquired through foreclosure. |
| |
| (c) | | Includes only in-service properties. |
During 2005, the Other Real Estate Partnerships acquired 12 industrial properties totaling approximately 1.7 million square feet of GLA at a total purchase price of approximately $62.1 million, or $36.47 per square foot. The twelve industrial properties acquired have the following characteristics:
| | | | | | | | | | | | | | | |
| | | Number
| | | | | | | | Occupancy
| |
Metropolitan Area | | of Properties | | | GLA | | | Property Type | | at 12/31/05(a) | |
| |
| Philadelphia, PA | | | 1 | | | | 178,537 | | | Bulk Warehouse | | | 100 | % |
| Denver, CO | | | 1 | | | | 110,400 | | | Bulk Warehouse | | | 100 | % |
| N. New Jersey | | | 1 | | | | 49,707 | | | Light Industrial | | | 100 | % |
| Central PA | | | 1 | | | | 243,380 | | | Light Industrial | | | N/A | |
| Central PA | | | 1 | | | | 332,170 | | | Light Industrial | | | 100 | % |
| Milwaukee, WI | | | 1 | | | | 100,520 | | | Bulk Warehouse | | | 100 | % |
| Atlanta, GA | | | 1 | | | | 296,059 | | | Bulk Warehouse | | | N/A | |
| Various | | | 4 | | | | 235,149 | | | Lt Ind/R&D Flex/Mfg/Reg & Bulk Whse | | | 100 | % |
| Chicago, IL | | | 1 | | | | 156,621 | | | Light Industrial | | | 100 | % |
| | | | | | | | | | | | | | | |
| | | | 12 | | | | 1,702,543 | | | | | | | |
| | | | | | | | | | | | | | | |
| | |
| (a) | | Includes only in-service properties. |
Property Development Activity
During 2005, the Consolidated Operating Partnership placed in-service 12 developments totaling approximately 2.6 million square feet of GLA at a total cost of approximately $141.9 million, or approximately $55.65 per square foot. The placed in-service developments have the following characteristics:
| | | | | | | | | | | |
| | | | | | | | Average
| |
| | | | | | | | Occupancy
| |
Metropolitan Area | | GLA | | | Property Type | | at 12/31/05 | |
| |
| Cedar Rapids, IA(a) | | | 750,000 | | | Bulk Warehouse | | | N/A | |
| Tampa, FL(a) | | | 27,980 | | | R&D/Flex | | | N/A | |
| St. Louis, MO(a) | | | 144,400 | | | Bulk Warehouse | | | N/A | |
| Cincinnati, OH | | | 180,000 | | | Bulk Warehouse | | | 100 | % |
| Cincinnati, OH | | | 236,250 | | | Bulk Warehouse | | | 100 | % |
| Columbus, OH(a) | | | 128,537 | | | Bulk Warehouse | | | N/A | |
| Detroit, MI | | | 63,000 | | | Regional Warehouse | | | 100 | % |
| Denver, CO | | | 16,120 | | | R&D/Flex | | | 100 | % |
| Tampa, FL | | | 38,780 | | | R&D/Flex | | | N/A | |
| Phoenix, AZ | | | 500,000 | | | Bulk Warehouse | | | 100 | % |
| Nashville, TN(a) | | | 325,000 | | | Bulk Warehouse | | | N/A | |
| Malvern, AK | | | 140,000 | | | Bulk Warehouse | | | 100 | % |
| | | | | | | | | | | |
| | | | 2,550,067 | | | | | | | |
| | | | | | | | | | | |
| | |
| (a) | | Property was sold in 2005. |
At December 31, 2005, the Consolidated Operating Partnership had 20 development projects not placed in service, totaling an estimated 4.8 million square feet and with an estimated completion cost of approximately $210.6 million. The Consolidated Operating Partnership estimates it will place in service 19 of
23
the 20 projects in fiscal year 2006. There can be no assurance that the Consolidated Operating Partnership will place these projects in service in 2006 or that the actual completion cost will not exceed the estimated completion cost stated above.
Property Sales
During 2005, the Consolidated Operating Partnership sold 82 industrial properties totaling approximately 10.7 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $561.6 million. The 82 industrial properties sold have the following characteristics:
| | | | | | | | | | | |
| | | Number of
| | | | | | |
Metropolitan Area | | Properties | | | GLA | | | Property Type |
| |
| St. Louis, MO | | | 1 | | | | 248,635 | | | Bulk Warehouse |
| Cedar Rapids, IA | | | 1 | | | | 750,000 | | | Bulk Warehouse |
| Indianapolis | | | 1 | | | | 286,555 | | | Bulk Warehouse |
| Detroit, MI | | | 1 | | | | 127,800 | | | Bulk Warehouse |
| Milwaukee, WI | | | 1 | | | | 104,190 | | | Bulk Warehouse |
| Cincinnati, OH | | | 1 | | | | 143,438 | | | Bulk Warehouse |
| Miami, FL | | | 1 | | | | 268,539 | | | Bulk Warehouse |
| Minneapolis, MN | | | 1 | | | | 49,190 | | | R&D/Flex |
| Minneapolis, MN | | | 1 | | | | 81,927 | | | Light Industrial |
| Nashville, TN | | | 1 | | | | 518,400 | | | Bulk Warehouse |
| Northern New Jersey | | | 1 | | | | 194,258 | | | Bulk Warehouse |
| Houston, TX | | | 1 | | | | 48,000 | | | Light Industrial |
| Northern New Jersey | | | 2 | | | | 29,000 | | | R&D Flex/Light Industrial |
| Tampa, FL | | | 1 | | | | 27,980 | | | R&D/Flex |
| Phoenix, AZ | | | 2 | | | | 99,436 | | | Light Industrial |
| Cincinnati, OH | | | 1 | | | | 345,000 | | | Bulk Warehouse |
| Northern New Jersey | | | 1 | | | | 208,000 | | | Bulk Warehouse |
| Los Angeles, CA | | | 2 | | | | 30,157 | | | Light Industrial |
| Houston, TX | | | 1 | | | | 74,716 | | | Light Industrial |
| Minneapolis, MN | | | 1 | | | | 47,263 | | | Light Industrial |
| Baltimore, MD | | | 3 | | | | 190,456 | | | Light Industrial |
| Central PA | | | 1 | | | | 249,640 | | | Bulk Warehouse |
| Tampa, FL | | | 1 | | | | 41,377 | | | Regional Warehouse |
| Chicago, IL | | | 1 | | | | 288,000 | | | Bulk Warehouse |
| Los Angeles, CA | | | 3 | | | | 245,302 | | | Regional & Bulk Warehouse |
| Baltimore, MD | | | 2 | | | | 125,000 | | | Light Industrial |
| Milwaukee, WI | | | 1 | | | | 160,000 | | | Bulk Warehouse |
| Central PA | | | 1 | | | | 252,000 | | | Bulk Warehouse |
| Atlanta, GA | | | 1 | | | | 239,435 | | | Manufacturing |
| Phoenix, AZ | | | 3 | | | | 407,205 | | | Bulk Warehouse |
| Des Moines, IA | | | 1 | | | | 90,000 | | | Regional Warehouse |
| Los Angeles, CA | | | 1 | | | | 68,446 | | | Regional Warehouse |
| St. Louis, MO | | | 2 | | | | 318,200 | | | Bulk Warehouse |
| Southern New Jersey | | | — | | | | 25,779 | | | Light Industrial |
| Tampa, FL | | | 1 | | | | 38,780 | | | R&D/Flex |
| Dallas, TX | | | 3 | | | | 262,686 | | | Lt Industrial/Regional & Bulk Warehouse |
| Denver, CO | | | 1 | | | | 34,740 | | | Light Industrial |
| Chicago, IL | | | 1 | | | | 31,175 | | | Light Industrial |
| Chicago, IL | | | 1 | | | | 74,960 | | | Manufacturing |
24
| | | | | | | | | | | |
| | | Number of
| | | | | | |
Metropolitan Area | | Properties | | | GLA | | | Property Type |
| |
| Columbus, OH | | | 1 | | | | 128,537 | | | Bulk Warehouse |
| Northern New Jersey | | | 1 | | | | 266,338 | | | Bulk Warehouse |
| Denver, CO | | | 1 | | | | 14,822 | | | R&D/Flex |
| Southern New Jersey | | | 1 | | | | 14,400 | | | R&D/Flex |
| Atlanta, GA | | | 1 | | | | 36,000 | | | Light Industrial |
| Los Angeles, CA | | | 2 | | | | 73,000 | | | Light Industrial |
| Los Angeles, CA | | | 1 | | | | 33,145 | | | Light Industrial |
| Salt Lake City, UT | | | 4 | | | | 100,072 | | | Light Industrial |
| Phoenix, AZ | | | 1 | | | | 56,801 | | | Light Industrial |
| Tampa, FL | | | 6 | | | | 179,494 | | | R&D/Flex |
| Des Moines, IA | | | 3 | | | | 731,169 | | | Manufacturing/Bulk Warehouse |
| Other, NH | | | 1 | | | | 107,908 | | | R&D/Flex |
| Nashville, TN | | | 1 | | | | 325,000 | | | Bulk Warehouse |
| Northern New Jersey | | | 1 | | | | 158,242 | | | Bulk Warehouse |
| Northern New Jersey | | | 1 | | | | 87,500 | | | Regional Warehouse |
| Tampa, FL | | | 3 | | | | 73,723 | | | R&D Flex/Light Industrial |
| Dallas, TX | | | 1 | | | | 395,970 | | | Bulk Warehouse |
| Atlanta, GA | | | 1 | | | | 1,054,500 | | | Bulk Warehouse |
| | | | | | | | | | | |
| | | | 82 | | | | 10,662,286 | | | |
| | | | | | | | | | | |
During 2005, the Other Real Estate Partnerships sold fourteen industrial properties totaling approximately 2.1 million square feet of GLA. Total gross sales proceeds approximated $94.5 million. The fourteen properties sold have the following characteristics:
| | | | | | | | | | | |
| | | Number of
| | | | | | |
Metropolitan Area | | Properties | | | GLA | | | Property Type |
| |
| Central PA | | | 1 | | | | 112,500 | | | Bulk Warehouse |
| Philadelphia, PA | | | 1 | | | | 61,157 | | | Light Industrial |
| Philadelphia, PA | | | 1 | | | | 72,000 | | | Regional Warehouse |
| Baltimore, MD | | | 1 | | | | 65,860 | | | Light Industrial |
| Indianapolis | | | 1 | | | | 192,000 | | | Bulk Warehouse |
| Atlanta, GA | | | 1 | | | | 59,959 | | | Light Industrial |
| Philadelphia, PA | | | 1 | | | | 26,827 | | | Manufacturing |
| Atlanta, GA | | | 1 | | | | 44,242 | | | R&D/Flex |
| Atlanta, GA | | | 1 | | | | 800,000 | | | Bulk Warehouse |
| Central PA | | | 1 | | | | 100,000 | | | Bulk Warehouse |
| Central PA | | | 1 | | | | 198,386 | | | Bulk Warehouse |
| Philadelphia, PA | | | 1 | | | | 40,000 | | | Light Industrial |
| Chicago, IL | | | 1 | | | | 49,730 | | | R&D/Flex |
| Central PA | | | 1 | | | | 300,000 | | | Bulk Warehouse |
| | | | | | | | | | | |
| | | | 14 | | | | 2,122,661 | | | |
| | | | | | | | | | | |
Property Acquisitions, Developments and Sales Subsequent to Year End
From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142.4 million (approximately $.9 million of which was made through the issuance of limited partnership interests in the Operating
25
Partnership (“Units”)). The Consolidated Operating Partnership also sold 16 industrial properties for approximately $240.1 million of gross proceeds during this period.
During the period January 1, 2006 through March 6, 2006, the Other Real Estate Partnerships acquired two industrial properties for a total estimated investment of approximately $7.3 million.
Tenant and Lease Information
The Consolidated Operating Partnership has a diverse base of over 2,400 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net or semi-net leases and pay as additional rent their percentage of the property’s operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2005, approximately 92% of the GLA of the Consolidated Operating Partnership’s in-service properties was leased, and no single tenant or group of related tenants accounted for more than 4.5% of the Consolidated Operating Partnership’s and Other Real Estate Partnership’s combined rent revenues, nor did any single tenant or group of related tenants occupy more than 5.8% of the Consolidated Operating Partnership’s and Other Real Estate Partnership’s Combined total GLA as of December 31, 2005.
The following table shows scheduled lease expirations for all leases for the Consolidated Operating Partnership’s in service properties as of December 31, 2005.
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Annual Base Rent
| | | | |
| | | Number of
| | | | | | Percentage of
| | | Under Expiring
| | | Percentage of Total
| |
| | | Leases
| | | GLA
| | | GLA
| | | Leases
| | | Annual Base Rent
| |
Year of Expiration(1) | | Expiring | | | Expiring(2) | | | Expiring | | | (In thousands) | | | Expiring(2) | |
| |
| 2006 | | | 713 | | | | 12,732,193 | | | | 22 | % | | | 52,856 | | | | 24 | % |
| 2007 | | | 487 | | | | 9,558,856 | | | | 17 | % | | | 39,933 | | | | 18 | % |
| 2008 | | | 468 | | | | 8,754,317 | | | | 15 | % | | | 36,707 | | | | 16 | % |
| 2009 | | | 269 | | | | 5,086,545 | | | | 9 | % | | | 22,181 | | | | 10 | % |
| 2010 | | | 240 | | | | 5,317,872 | | | | 9 | % | | | 21,668 | | | | 10 | % |
| 2011 | | | 85 | | | | 2,189,336 | | | | 4 | % | | | 7,619 | | | | 3 | % |
| 2012 | | | 31 | | | | 1,085,093 | | | | 2 | % | | | 3,404 | | | | 2 | % |
| 2013 | | | 30 | | | | 2,177,011 | | | | 4 | % | | | 7,263 | | | | 3 | % |
| 2014 | | | 19 | | | | 1,022,704 | | | | 2 | % | | | 3,682 | | | | 2 | % |
| 2015 | | | 35 | | | | 3,216,067 | | | | 6 | % | | | 11,055 | | | | 5 | % |
| Thereafter | | | 34 | | | | 5,498,145 | | | | 10 | % | | | 15,104 | | | | 7 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 2,411 | | | | 56,638,139 | | | | 100.0 | % | | $ | 221,472 | | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | | Lease expirations as of December 31, 2005 assume tenants do not exercise existing renewal, termination, or purchase options. |
| |
| (2) | | Does not include existing vacancies of 5,036,287 aggregate square feet. |
The Other Real Estate Partnerships have a diverse base of more than 250 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net or semi-net leases and pay as additional rent their percentage of the property’s operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2005, approximately 92% of the GLA of the Other Real Estate Partnerships’ in-service properties was leased.
26
The following table shows scheduled lease expirations for all leases for the Other Real Estate Partnerships’ properties in — service as of December 31, 2005.
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Annual Base Rent
| | | | |
| | | Number of
| | | | | | Percentage of
| | | Under Expiring
| | | Percentage of Total
| |
| | | Leases
| | | GLA
| | | GLA
| | | Leases
| | | Annual Base Rent
| |
Year of Expiration(1) | | Expiring | | | Expiring(2) | | | Expiring | | | (In thousands) | | | Expiring(2) | |
| |
| 2006 | | | 72 | | | | 1,411,048 | | | | 17.2 | % | | | 6,794 | | | | 19 | % |
| 2007 | | | 47 | | | | 1,054,689 | | | | 12.9 | % | | | 5,061 | | | | 15 | % |
| 2008 | | | 41 | | | | 1,925,609 | | | | 23.5 | % | | | 7,784 | | | | 22 | % |
| 2009 | | | 35 | | | | 880,319 | | | | 10.8 | % | | | 4,113 | | | | 12 | % |
| 2010 | | | 34 | | | | 953,549 | | | | 11.6 | % | | | 4,176 | | | | 12 | % |
| 2011 | | | 16 | | | | 955,757 | | | | 11.7 | % | | | 3,868 | | | | 11 | % |
| 2012 | | | 6 | | | | 242,826 | | | | 3.0 | % | | | 1,033 | | | | 3 | % |
| 2013 | | | 7 | | | | 371,684 | | | | 4.5 | % | | | 1,145 | | | | 3 | % |
| 2014 | | | 2 | | | | 109,697 | | | | 1.3 | % | | | 279 | | | | 1 | % |
| 2015 | | | 3 | | | | 244,803 | | | | 3.0 | % | | | 812 | | | | 2 | % |
| Thereafter | | | 1 | | | | 37,765 | | | | 0.5 | % | | | — | | | | — | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 264 | | | | 8,187,746 | | | | 100.0 | % | | $ | 35,065 | | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | | Lease expirations as of December 31, 2005 assume tenants do not exercise existing renewal, termination, or purchase options. |
| |
| (2) | | Does not include existing vacancies of 330,989 aggregate square feet. |
| |
| Item 3. | Legal Proceedings |
The Consolidated Operating Partnership is involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on the results of operations, financial position or liquidity of the Consolidated Operating Partnership.
| |
| Item 4. | Submission of Matters to a Vote of Security Holders |
None
PART II
| |
| Item 5. | Market for Registrant’s Partners’ Capital, Related Partner Matters and Issuer Purchases of Equity Securities |
There is no established public trading market for the general partner and limited partner units. As of March 6, 2006, there were 251 holders of record of general partner and limited partner units (“Unit”).
Beginning with the third quarter of 1994, the Operating Partnership has made consecutive quarterly distributions to its partners with respect to general partner and limited partner units since the initial public offering of the Company in June 1994. The current indicated annual distribution rate with respect to general partner and limited partner units is $2.80 per unit ($.7000 per Unit per quarter). The Operating Partnership’s ability to make distributions depends on a number of factors, including its net cash provided by operating activities, capital commitments and debt repayment schedules. Holders of general partner and limited partner units are entitled to receive distributions when, as and if declared by the Board of Directors of the Company, its general partner, after the priority distributions required under the Operating Partnership’s partnership agreement have been made with respect to Preferred Units out of any funds legally available for that purpose.
27
The following table sets forth the distributions per Unit paid or declared by the Operating Partnership during the periods noted:
| | | | | |
| | | Distribution
| |
Quarter Ended | | Declared | |
| |
| December 31, 2005 | | $ | 0.7000 | |
| September 30, 2005 | | $ | 0.6950 | |
| June 30, 2005 | | $ | 0.6950 | |
| March 31, 2005 | | $ | 0.6950 | |
| December 31, 2004 | | $ | 0.6950 | |
| September 30, 2004 | | $ | 0.6850 | |
| June 30, 2004 | | $ | 0.6850 | |
| March 31,2004 | | $ | 0.6850 | |
For the year ended December 31, 2005, the Operating Partnership issued 366,472 Units valued, in the aggregate, at $14.7 million in exchange for interests in certain properties.
All of the above Units were issued in private placements in reliance on Section 4(2) of the Securities Act of 1933, as amended, including Regulation D promulgated thereunder, to individuals or entities holding real property or interests therein. No underwriters were used in connection with such issuances.
Subject tolock-up periods and certain adjustments, Units are convertible into common stock, par value $0.01 per share, of the Company on aone-for-one basis or cash at the option of the Company.
28
| |
| Item 6. | Selected Financial Data |
The following sets forth selected financial and operating data for the Consolidated Operating Partnership on a historical consolidated basis. The following data should be read in conjunction with the financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in thisForm 10-K. The historical statements of operations for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 include the results of operations of the Consolidated Operating Partnership as derived from the Consolidated Operating Partnership’s audited financial statements. The results of operations of properties sold are presented in discontinued operations if such properties met both of the following criteria: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Consolidated Operating Partnership as a result of the disposition and (b) the Consolidated Operating Partnership will not have any significant involvement in the operations of the property after the disposal transaction. The historical balance sheet data and other data as of December 31, 2005, 2004, 2003, 2002 and 2001 include the balances of the Consolidated Operating Partnership as derived from the Consolidated Operating Partnership’s audited financial statements.
| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | 12/31/05 | | | 12/31/04 | | | 12/31/03 | | | 12/31/02 | | | 12/31/01 | |
| | | (In thousands, except per unit and property data) | |
| |
Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | |
| Total Revenues | | $ | 323,357 | | | $ | 258,768 | | | $ | 236,165 | | | $ | 220,847 | | | $ | 233,685 | |
| Interest Income | | | 1,075 | | | | 2,025 | | | | 1,698 | | | | 121 | | | | 265 | |
Market-to-Market/Gain on Settlement of Interest Rate Protection Agreement | | | 811 | | | | 1,583 | | | | — | | | | — | | | | — | |
| Property Expenses | | | (108,519 | ) | | | (87,461 | ) | | | (80,562 | ) | | | (73,062 | ) | | | (72,153 | ) |
| Expenses from Build to Suit Development for Sale | | | (15,574 | ) | | | — | | | | — | | | | — | | | | — | |
| General and Administrative Expense | | | (54,846 | ) | | | (38,912 | ) | | | (25,607 | ) | | | (19,230 | ) | | | (17,990 | ) |
| Interest Expense | | | (108,164 | ) | | | (98,458 | ) | | | (94,637 | ) | | | (87,069 | ) | | | (78,841 | ) |
| Amortization of Deferred Financing Costs | | | (2,122 | ) | | | (1,928 | ) | | | (1,761 | ) | | | (1,858 | ) | | | (1,742 | ) |
| Depreciation and Other Amortization | | | (105,714 | ) | | | (77,404 | ) | | | (60,046 | ) | | | (49,387 | ) | | | (45,775 | ) |
| Gain (Loss) from Early Retirement of Debt (b) | | | 82 | | | | (515 | ) | | | — | | | | (888 | ) | | | (10,309 | ) |
| Valuation Provision on Real Estate (a) | | | — | | | | — | | | | — | | | | — | | | | (6,490 | ) |
| Equity in Income of Other Real Estate Partnerships | | | 48,212 | | | | 29,203 | | | | 43,332 | | | | 53,038 | | | | 47,949 | |
| Equity in Income (Loss) of Joint Ventures | | | 3,698 | | | | 35,840 | | | | 539 | | | | 463 | | | | (791 | ) |
| Income Tax Benefit | | | 12,033 | | | | 7,673 | | | | 5,147 | | | | 2,193 | | | | 197 | |
| | | | | | | | | | | | | | | | | | | | | |
| (Loss) Income from Continuing Operations | | | (5,671 | ) | | | 30,414 | | | | 24,268 | | | | 45,168 | | | | 48,005 | |
| Income from Discontinued Operations (Including Gain on Sale of Real Estate of $102,742, $81,806, $74,797 and $37,106 for the Year Ended December 31, 2005, 2004, 2003 and 2002), (c) | | | 108,482 | | | | 95,740 | | | | 102,943 | | | | 80,701 | | | | 48,307 | |
| Provision for Income Taxes Allocable to Discontinued Operations (Including $19,719, $8,267, $1,988 and $1,435 allocable to Gain on Sale of Real Estate for the years ended December 31, 2005, 2004, 2003 and 2002, respectively) | | | (21,754 | ) | | | (10,800 | ) | | | (3,427 | ) | | | (2,465 | ) | | | (1,248 | ) |
| Gain on Sale of Real Estate | | | 28,870 | | | | 15,112 | | | | 9,594 | | | | 16,408 | | | | 42,942 | |
| Provision for Income Taxes Allocable to Gain on Sale of Real Estate | | | (10,711 | ) | | | (5,312 | ) | | | (2,322 | ) | | | (3,394 | ) | | | (43 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net Income | | | 99,216 | | | | 125,154 | | | | 131,056 | | | | 136,418 | | | | 137,963 | |
| Redemption of Preferred Units | | | — | | | | (7,959 | ) | | | — | | | | (3,707 | ) | | | — | |
| Preferred Unit Distributions | | | (10,688 | ) | | | (14,488 | ) | | | (20,176 | ) | | | (23,432 | ) | | | (28,924 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 88,528 | | | $ | 102,707 | | | $ | 110,880 | | | $ | 109,279 | | | $ | 109,039 | |
| | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | 12/31/05 | | | 12/31/04 | | | 12/31/03 | | | 12/31/02 | | | 12/31/01 | |
| | | (In thousands, except per unit and property data) | |
| |
| Income from Continuing Operations Available to Unitholders Per Weighted Average Unit Outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.04 | | | $ | 0.38 | | | $ | 0.25 | | | $ | 0.68 | | | $ | 1.35 | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted | | $ | 0.04 | | | $ | 0.37 | | | $ | 0.25 | | | $ | 0.67 | | | $ | 1.34 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders Per Weighted Average Unit Outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 1.81 | | | $ | 2.18 | | | $ | 2.45 | | | $ | 2.38 | | | $ | 2.37 | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted | | $ | 1.80 | | | $ | 2.16 | | | $ | 2.44 | | | $ | 2.37 | | | $ | 2.36 | |
| | | | | | | | | | | | | | | | | | | | | |
| Distributions Per Unit | | $ | 2.7850 | | | $ | 2.7500 | | | $ | 2.7400 | | | $ | 2.7250 | | | $ | 2.6525 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted Average Number of Units Outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 48,968 | | | | 47,136 | | | | 45,322 | | | | 45,841 | | | | 45,949 | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted | | | 49,193 | | | | 47,467 | | | | 45,443 | | | | 46,079 | | | | 46,258 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Income | | $ | 99,216 | | | $ | 125,154 | | | $ | 131,056 | | | $ | 136,418 | | | $ | 137,963 | |
| Other Comprehensive (Loss) Income: | | | | | | | | | | | | | | | | | | | | |
| Cumulative Transition Adjustment | | | — | | | | — | | | | — | | | | — | | | | (14,920 | ) |
| Settlement of Interest Rate Protection Agreements | | | — | | | | 6,816 | | | | — | | | | 1,772 | | | | (191 | ) |
| Reclassification of Settlement of Interest Rate Protection Agreements to Net Income | | | (159 | ) | | | — | | | | — | | | | — | | | | — | |
Mark-to-Market of Interest Rate Protection Agreements and Interest Rate Swap Agreements | | | (1,414 | ) | | | 106 | | | | 251 | | | | (126 | ) | | | (231 | ) |
| Write-off of Unamortized Interest Rate Protection Agreements Due to Early Retirement of Debt | | | — | | | | — | | | | — | | | | — | | | | 2,156 | |
| Amortization of Interest Rate Protection Agreements | | | (1,085 | ) | | | (512 | ) | | | 198 | | | | 176 | | | | 805 | |
| | | | | | | | | | | | | | | | | | | | | |
| Comprehensive Income | | $ | 96,558 | | | $ | 131,564 | | | $ | 131,505 | | | $ | 138,240 | | | $ | 125,582 | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance Sheet Data (End of Period): | | | | | | | | | | | | | | | | | | | | |
| Real Estate, Before Accumulated Depreciation | | | 2,896,937 | | | $ | 2,486,414 | | | $ | 2,352,026 | | | $ | 2,316,970 | | | $ | 2,311,883 | |
| Real Estate, After Accumulated Depreciation | | | 2,541,182 | | | | 2,165,411 | | | | 2,056,338 | | | | 2,055,595 | | | | 2,082,590 | |
| Real Estate Held for Sale, Net | | | 16,840 | | | | 50,286 | | | | — | | | | 7,040 | | | | 28,702 | |
| Investment in and Advances to Other Real Estate Partnerships | | | 378,864 | | | | 339,967 | | | | 374,906 | | | | 377,776 | | | | 378,350 | |
| Total Assets | | | 3,230,465 | | | | 2,721,151 | | | | 2,633,262 | | | | 2,585,805 | | | | 2,580,652 | |
| Mortgage Loans Payable, Net, Unsecured Lines of Credit and Senior Unsecured Debt, Net | | | 1,811,322 | | | | 1,572,473 | | | | 1,451,269 | | | | 1,402,069 | | | | 1,277,722 | |
| Total Liabilities | | | 2,016,827 | | | | 1,711,429 | | | | 1,570,195 | | | | 1,525,587 | | | | 1,400,727 | |
| Partners’ Capital | | | 1,213,638 | | | | 1,009,722 | | | | 1,063,067 | | | | 1,060,218 | | | | 1,179,925 | |
| Other Data: | | | | | | | | | | | | | | | | | | | | |
| Cash Flow From Operating Activities | | $ | 82,831 | | | $ | 81,015 | | | $ | 91,266 | | | $ | 138,453 | | | $ | 145,986 | |
| Cash Flow From Investing Activities | | | (404,742 | ) | | | 5,570 | | | | 18,115 | | | | 11,007 | | | | (80,236 | ) |
| Cash Flow From Financing Activities | | | 325,653 | | | | (83,516 | ) | | | (109,381 | ) | | | (149,460 | ) | | | (69,394 | ) |
| Total In-Service Properties | | | 786 | | | | 726 | | | | 729 | | | | 798 | | | | 812 | |
| Total In-Service GLA, in Square Feet | | | 61,674,426 | | | | 52,330,335 | | | | 48,527,601 | | | | 49,867,755 | | | | 52,214,832 | |
| In-Service Occupancy Percentage | | | 92 | % | | | 91 | % | | | 90 | % | | | 89 | % | | | 91 | % |
| | |
| (a) | | Represents a valuation provision on real estate relating to certain properties located in Columbus, Ohio, Des Moines, Iowa and Grand Rapids, Michigan. |
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| (b) | | In 2005, the Consolidated Operating Partnership wrote off $.05 million of financing fees related to the Consolidated Operating Partnership’s previous line of credit agreement which was amended and restated |
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| | |
| | on August 23, 2005. In addition, the Consolidated Operating Partnership paid $.3 million of finance fees and wrote off a loan premium of $.4 million on a mortgage loan payable which was assumed by the buyers of the related properties on July 13, 2005. In 2004, the Consolidated Operating Partnership paid off and retired a mortgage loan. The Consolidated Operating Partnership recorded a loss from the early retirement of debt of approximately $.5 million which is comprised of the write-off of unamortized deferred financing costs and a prepayment penalty. In 2002, the Consolidated Operating Partnership paid off and retired certain senior unsecured debt. The Consolidated Operating Partnership recorded a loss from the early retirement of debt of approximately $.9 million which is comprised of the amount paid above the carrying amount of the senior unsecured debt, the write-off of pro rata unamortized deferred financing costs and legal costs. In 2001, the Consolidated Operating Partnership, paid off and retired certain mortgage loans and senior unsecured debt. The Consolidated Operating Partnership recorded a loss from the early retirement of debt of approximately $10.3 million, which is comprised of the amount paid above the carrying amount of the senior unsecured debt, the write-off of unamortized deferred financing costs, the write-off of the unamortized portion of an interest rate protection agreement which was used to fix the interest rate on the senior unsecured debt prior to issuance, the settlement of an interest rate protection agreement used to fix the retirement price of the senior unsecured debt, prepayment fees, legal costs and other expenses. |
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| (c) | | On January 1, 2002, the Consolidated Operating Partnership adopted the Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Consolidated Operating Partnership as a result of the disposal transaction and (b) the Consolidated Operating Partnership will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be restated and presented in discontinued operations in prior consolidated statements of operations. |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following discussion should be read in conjunction with “Selected Financial Data” and the historical Consolidated Financial Statements and Notes thereto appearing elsewhere in thisForm 10-K.
This report contains certain 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. First Industrial, L.P. (the “Operating Partnership”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Operating Partnership, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Operating Partnership’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Operating Partnership on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rates, competition, supply and demand for industrial properties in the Operating Partnership’s current and proposed market areas, potential environmental liabilities, slippage in development orlease-up schedules, tenant credit risks,higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and its business, including additional factors that could materially affect the Operating Partnership’s financial results, is included herein in Item 1A, “Risk Factors” and in the Operating Partnership’s other filings with the Securities and Exchange Commission.
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First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% ownership interest at December 31, 2005. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $312.5 million. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 13.2% interest in the Operating Partnership at December 31, 2005.
The Operating Partnership or First Industrial Development Services, Inc. is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of First Industrial Development Services, Inc., (together with the Operating Partnership and the L.L.C.’s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership. The Operating Partnership also holds at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P (the “Mortgage Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD., and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnerships’ operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership. The Operating Partnership or First Industrial Development Services, Inc., through separate wholly-owned limited liability companies in which it is the sole member, also owns minority equity interests in, and provides asset and property management services to, four joint ventures which invest in industrial properties (the “September 1998 Joint Venture” , the “May 2003 Joint Venture”, the “March 2005 Joint Venture” and the “September 2005 Joint Venture”). The Operating Partnership, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in, and provided property management services to, a fifth joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 joint Venture and the September 2005 Joint venture; the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. The operating data of the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein.
The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.
The financial statements of the Operating Partnership report the L.L.C.s and First Industrial Development Services, Inc. on a consolidated basis and the Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting. Profits, losses and distributions of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships are allocated to the general partner and the limited partners, or members, as applicable, in accordance with the provisions contained within the partnership agreements or operating agreements, as applicable, of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships.
As of December 31, 2005, the Consolidated Operating Partnership owned 786 in-service industrial properties, containing an aggregate of approximately 61.7 million square feet of gross leasable area (“GLA”). On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 98 in-service industrial properties, containing an aggregate of approximately 8.5 million square feet of GLA. Of the 98 industrial properties owned by the Other Real Estate Partnerships at December 31, 2005, 21 are held by the Financing Partnership, 14 are held by the Securities Partnership, 11 are held by the Mortgage Partnership, 37 are held by the Pennsylvania Partnership, 10 are held by the Harrisburg Partnership, four are held by the Indianapolis Partnership and one is held by TK-SV, LTD.
Management believes the Consolidated Operating Partnership’s financial condition and results of operations are, primarily, a function of the Consolidated Operating Partnership’s and its joint ventures’
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performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, redeployment of internal capital and access to external capital.
The Consolidated Operating Partnership generates revenue primarily from rental income and tenant recoveries from long-term (generally three to six years) operating leases of its and its joint ventures’ industrial properties. Such revenue is offset by certain property specific operating expenses, such as real estate taxes, repairs and maintenance, property management, utilities and insurance expenses, along with certain other costs and expenses, such as depreciation and amortization costs and general and administrative and interest expenses. The Consolidated Operating Partnership’s revenue growth is dependent, in part, on its ability to (i) increase rental income, through increasing, either or both, occupancy rates and rental rates at the Consolidated Operating Partnership’s and its joint ventures’ properties, (ii) maximize tenant recoveries and (iii) minimize operating and certain other expenses. Revenues generated from rental income and tenant recoveries are a significant source of funds, in addition to income generated from gains/losses on the sale of the Consolidated Operating Partnership’s and its joint ventures’ properties (as discussed below), for the Consolidated Operating Partnership’s distributions. The leasing of property, in general, and occupancy rates, rental rates, operating expenses and certain non-operating expenses, in particular, are impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The leasing of property also entails various risks, including the risk of tenant default. If the Consolidated Operating Partnership were unable to maintain or increase occupancy rates and rental rates at the Consolidated Operating Partnership’s and its joint ventures’ properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, the Consolidated Operating Partnership’s revenue growth would be limited. Further, if a significant number of the Consolidated Operating Partnership’s or its joint ventures’ tenants were unable to pay rent (including tenant recoveries) or if the Consolidated Operating Partnership or its joint ventures were unable to rent their properties on favorable terms, the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
The Consolidated Operating Partnership’s revenue growth is also dependent, in part, on its and its joint ventures’ ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Consolidated Operating Partnership itself, and through its various joint ventures, continually seeks to acquire existing industrial properties on favorable terms, and, when conditions permit, also seeks to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as they lease-up, generate revenue from rental income, tenant recoveries and fees, income from which, as discussed above, is a source of funds for the Consolidated Operating Partnership’s distributions. The acquisition and development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The acquisition and development of properties also entails various risks, including the risk that the Consolidated Operating Partnership’s and its joint ventures’ investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustainand/or achieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, the Consolidated Operating Partnership may not be able to complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties. Also, the Consolidated Operating Partnership and its joint ventures face significant competition for attractive acquisition and development opportunities from other well-capitalized real estate investors, including both publicly-traded real estate investment trusts and private investors. Further, as discussed below, the Consolidated Operating Partnership and its joint ventures may not be able to finance the acquisition and development opportunities they identify. If the Company and its joint ventures were unable to acquire and develop sufficient additional properties on favorable terms or if such investments did not perform as expected, the Consolidated Operating Partnership’s revenue growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
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The Consolidated Operating Partnership also generates income from the sale of its and its joint ventures’ properties (including existing buildings, buildings which the Consolidated Operating Partnership or joint ventures have developed or re-developed on a merchant basis and land). The Consolidated Operating Partnership itself, and through its various joint ventures, is continually engaged in, and its income growth is dependent, in part, on systematically redeploying capital from properties and other assets with lower yield potential into properties and other assets with higher yield potential. As part of that process, the Consolidated Operating Partnership and its joint ventures sell, on an ongoing basis, select stabilized properties or land or properties offering lower potential returns relative to their market value. The gain/loss on, and fees from, the sale of such properties are included in the Consolidated Operating Partnership’s income and are a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for the Consolidated Operating Partnership’s distributions. Also, a significant portion of the Consolidated Operating Partnership’s proceeds from such sales is used to fund the Consolidated Operating Partnership’s acquisition of existing, and the acquisition and development of new, industrial properties. The sale of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of the Consolidated Operating Partnership’s properties. Further, the Consolidated Operating Partnership’s ability to sell properties is limited by safe harbor rules applying to REITs under the Code which relate to the number of properties that may be disposed of in a year, their tax bases and the cost of improvements made to the properties, along with other tests which enable a REIT to avoid punitive taxation on the sale of assets. If the Consolidated Operating Partnership and its joint ventures were unable to sell properties on favorable terms, the Consolidated Operating Partnership’s income growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
Currently, the Consolidated Operating Partnership utilizes a portion of the net sales proceeds from property sales, borrowings under its unsecured lines of credit and proceeds from the issuance, when and as warranted, of additional equity securities to finance future acquisitions and developments, and to fund its equity commitments to its joint ventures. Access to external capital on favorable terms plays a key role in the Consolidated Operating Partnership’s financial condition and results of operations, as it impacts the Consolidated Operating Partnership’s cost of capital and its ability and cost to refinance existing indebtedness as it matures and to fund acquisitions, developments and contributions to its joint ventures or through the issuance, when and as warranted, of additional equity securities. The Company’s ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on the Company’s capital stock and debt, the market’s perception of the Company’s growth potential, the Company’s current and potential future earnings and cash distributions and the market price of the Company’s capital stock. If the Company were unable to access external capital on favorable terms, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
CRITICAL ACCOUNTING POLICIES
The Consolidated Operating Partnership’s significant accounting policies are described in more detail in Note 3 to the Consolidated Financial Statements. The Consolidated Operating Partnership believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
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| | • | The Consolidated Operating Partnership maintains an allowance for doubtful accounts which is based on estimates of potential losses which could result from the inability of the Consolidated Operating Partnership’s tenants to satisfy outstanding billings with the Consolidated Operating Partnership. The allowance for doubtful accounts is an estimate based on the Consolidated Operating Partnership’s assessment of the creditworthiness of its tenants. |
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| | • | Properties are classified as held for sale when the Consolidated Operating Partnership has entered into a binding contract to sell such properties. When properties are classified as held for sale, the Consolidated |
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| | |
| | | Operating Partnership ceases depreciating the properties and estimates the values of such properties and measures them at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Consolidated Operating Partnership decides not to sell a property previously classified as held for sale, the Consolidated Operating Partnership will reclassify such property as held and used. The Consolidated Operating Partnership estimates the value of such property and measures it at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. Fair value is determined by deducting from the contract price of the property the estimated costs to close the sale. |
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| | • | The Consolidated Operating Partnership reviews its properties on a quarterly basis for possible impairment and provides a provision if impairments are determined. The Consolidated Operating Partnership utilizes the guidelines established under Financial Accounting Standards Board’s Statement of Financial Accounting Standards (“FAS”) No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”) to determine if impairment conditions exist. The Consolidated Operating Partnership reviews the expected undiscounted cash flows of each property to determine if there are any indications of impairment. If the expected undiscounted cash flows of a particular property are less than the net book basis of the property, the Consolidated Operating Partnership will recognize an impairment charge equal to the amount of carrying value of the property that exceeds the fair value of the property. Fair value is determined by discounting the future expected cash flows of the property. The calculation of the fair value involves subjective assumptions such as estimated occupancy, rental rates, ultimate residual value and the discount rate used to present value the cash flows. |
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| | • | The Consolidated Operating Partnership is engaged in the acquisition of individual properties as well as multi-property portfolios. In accordance with FAS No. 141, “Business Combinations” (“FAS 141”), the Consolidated Operating Partnership is required to allocate purchase price between land, building, tenant improvements, leasing commissions, intangible assets and above and below market leases. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rents for each corresponding in-place lease. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental income. The Consolidated Operating Partnership also must allocate purchase price on multi-property portfolios to individual properties. The allocation of purchase price is based on the Consolidated Operating Partnership’s assessment of various characteristics of the markets where the property is located and the expected cash flows of the property. |
RESULTS OF OPERATIONS
Comparison of Year Ended December 31, 2005 to Year Ended December 31, 2004
The Consolidated Operating Partnership’s net income available to unitholders was $88.5 million and $102.7 million for the years ended December 31, 2005 and December 31, 2004, respectively. Basic and diluted net income available to unitholders was $1.81 and $1.80 per unit, respectively, for the year ended December 31, 2005, and $2.18 and $2.16 per unit, respectively, for the year ended December 31, 2004.
The tables below summarize the Consolidated Operating Partnership’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2005 and December 31, 2004. Same store properties are in service properties owned prior to January 1, 2004. Acquired properties are properties that were acquired subsequent to December 31, 2003. Sold properties are properties that were sold subsequent to December 31, 2003. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2003 or acquisitions acquired prior to January 1, 2004 that were not placed in service as of December 31,
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2003. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Consolidated Operating Partnership’s maintenance company, fees earned from the Consolidated Operating Partnership’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Consolidated Operating Partnership’s maintenance company and other miscellaneous regional expenses.
The Consolidated Operating Partnership’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The future revenues and expenses may vary materially from historical rates.
At December 31, 2005 and 2004, the occupancy rates of the Consolidated Operating Partnership’s same store properties were 89.1% and 90.1%, respectively.
| | | | | | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | $ Change | | | % Change | |
| | | ($ in 000’s) | |
| |
REVENUES | | | | | | | | | | | | | | | | |
| Same Store Properties | | $ | 212,949 | | | $ | 213,742 | | | $ | (793 | ) | | | (0.4 | )% |
| Acquired Properties | | | 50,864 | | | | 11,613 | | | | 39,251 | | | | 338.0 | % |
| Sold Properties | | | 19,273 | | | | 40,725 | | | | (21,452 | ) | | | (52.7 | )% |
| Properties Not Placed in-service | | | 40,779 | | | | 22,159 | | | | 18,620 | | | | 84.0 | % |
| Other | | | 19,389 | | | | 8,768 | | | | 10,621 | | | | 121.1 | % |
| | | | | | | | | | | | | | | | | |
| | | | 343,254 | | | | 297,007 | | | | 46,247 | | | | 15.6 | % |
| Discontinued Operations | | | (19,897 | ) | | | (38,239 | ) | | | 18,342 | | | | (48.0 | )% |
| | | | | | | | | | | | | | | | | |
| Total Revenues | | $ | 323,357 | | | $ | 258,768 | | | $ | 64,589 | | | | 25.0 | % |
| | | | | | | | | | | | | | | | | |
Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $39.3 million due to properties acquired subsequent to December 31, 2003. Revenues from sold properties decreased $21.5 million due to properties sold subsequent to December 31, 2003. Revenues from properties not in service increased by approximately $18.6 million due primarily tobuild-to-suit-for-sale revenues of $16.2 million. Other revenues increased by approximately $10.6 million due primarily to an increase in joint venture fees due to new joint ventures (as discussed further) and assignment fees.
| | | | | | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | $ Change | | | % Change | |
| | | ($ in 000’s) | |
| |
PROPERTY EXPENSES | | | | | | | | | | | | | | | | |
| Same Store Properties | | $ | 71,972 | | | $ | 68,842 | | | $ | 3,130 | | | | 4.5 | % |
| Acquired Properties | | | 15,079 | | | | 3,668 | | | | 11,411 | | | | 311.1 | % |
| Sold Properties | | | 7,051 | | | | 13,812 | | | | (6,761 | ) | | | (49.0 | )% |
| Properties Not Placed in-service | | | 25,252 | | | | 8,018 | | | | 17,234 | | | | 214.9 | % |
| Other | | | 11,841 | | | | 6,355 | | | | 5,486 | | | | 86.3 | % |
| | | | | | | | | | | | | | | | | |
| | | | 131,195 | | | | 100,695 | | | | 30,500 | | | | 30.3 | % |
| Discontinued Operations | | | (7,102 | ) | | | (13,234 | ) | | | 6,132 | | | | (46.3 | )% |
| | | | | | | | | | | | | | | | | |
| Total Property Expenses | | $ | 124,093 | | | $ | 87,461 | | | $ | 36,632 | | | | 41.9 | % |
| | | | | | | | | | | | | | | | | |
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and expenses from build to suit development for sale. Property expenses from same store properties increased $3.1 million or 4.5% primarily due to an increase of $.8 million in utility expense attributable to increases in water, gas and electric costs, an increase of $1.1 million in repair and maintenance attributable to increases in snow removal expense and an increase of $.6 million in real estate tax expense. Property expenses from acquired properties increased by $11.4 million due to properties acquired subsequent to December 31, 2003. Property expenses from sold properties decreased by $6.8 million due to
36
properties sold subsequent to December 31, 2003. Property expenses from properties not in service increased $17.2 million due primarily tobuild-to-suit-for-sale costs of $15.6 million. Other expense increased by $5.5 million due primarily to increases in employee compensation.
General and administrative expense increased by approximately $15.9 million, or 41.0%, due primarily to increases in employee compensation related to compensation for new employees as well as an increase in incentive compensation.
Amortization of deferred financing costs remained relatively unchanged.
| | | | | | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | $ Change | | | % Change | |
| | | ($ in 000’s) | |
| |
DEPRECIATION AND OTHER AMORTIZATION | | | | | | | | | | | | | | | | |
| Same Store Properties | | $ | 66,785 | | | $ | 62,897 | | | $ | 3,888 | | | | 6.2 | % |
| Acquried Properties | | | 27,011 | | | | 3,759 | | | | 23,252 | | | | 618.6 | % |
| Sold Properties | | | 6,075 | | | | 11,510 | | | | (5,435 | ) | | | (47.2 | )% |
| Properties Not in-service and Other | | | 11,154 | | | | 8,421 | | | | 2,733 | | | | 32.5 | % |
| Corporate Furniture, Fixtures & Equipment | | | 1,371 | | | | 1,279 | | | | 92 | | | | 7.2 | % |
| | | | | | | | | | | | | | | | | |
| | | | 112,396 | | | | 87,866 | | | | 24,530 | | | | 27.9 | % |
| Discontinued Operations | | | (6,682 | ) | | | (10,462 | ) | | | 3,780 | | | | (36.1 | )% |
| | | | | | | | | | | | | | | | | |
| Total Depreciation and Other Amortization | | $ | 105,714 | | | $ | 77,404 | | | $ | 28,310 | | | | 36.6 | % |
| | | | | | | | | | | | | | | | | |
The increase in depreciation and other amortization for same store properties is due to an acceleration of depreciation and amortization on tenant improvements and leasing commissions for tenants who terminated leases early, an acceleration of amortization on in-place lease values related to leases for which the tenants did not renew and a net increase in leasing commissions and tenant improvements paid in 2005 and 2004. Depreciation and other amortization from acquired properties increased by $23.3 million due to properties acquired subsequent to December 31, 2003. Depreciation and other amortization from sold properties decreased by $5.4 million due to properties sold subsequent to December 31, 2003. Depreciation and other amortization for properties not in service and other increased by $2.7 million due primarily to depreciation expense being recognized in 2005 for developments that were substantially completed. Amortization of corporate furniture, fixtures and equipment remained relatively unchanged.
Interest income remained relatively unchanged.
Interest expense increased by $9.7 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2005 ($1,687.8 million), as compared to the year ended December 31, 2004 ($1,520.4 million) and an increase in the weighted average interest rate for the year ended December 31, 2005 (6.62%), as compared to the year ended December 31, 2004 (6.60%). This was partially offset by an increase in capitalized interest for the year ended December 31, 2005 due to an increase in development activities.
The Consolidated Operating Partnership recognized a $.08 million gain on the early retirement of debt for the year ended December 31, 2005. This includes $.05 million write-off of financing fees associated with the Consolidated Operating Partnership’s previous line of credit agreement which was amended and restated on August 23, 2005. The gain on early retirement of debt also includes a payment of $.3 million of fees and a write-off of loan premium of $.4 million on a $13.7 million mortgage loan which was assumed by the buyers of the related properties on July 13, 2005. The loss on early retirement of debt of approximately $.5 million for the year ended December 31, 2004 is comprised of the write-off of unamortized deferred financing costs, a loan premium and a prepayment penalty related to the early pay off and retirement of a $4.8 million mortgage loan (the “Acquisition Mortgage Loan XI.”)
The Consolidated Operating Partnership recognized a $.6 million gain related to thesettlement/mark-to-market of two interest rate protection agreements that the Consolidated Operating Partnership entered into
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during 2005 in order to hedge the change in value of a build to suit development project as well as $.2 million in deferred gain that wasre-classed out of other comprehensive income relating to a settled interest rate protection agreement that no longer qualified for hedge accounting.
In March 2004, the Consolidated Operating Partnership entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73.5 million. In May 2004, the Consolidated Operating Partnership reduced the projected amount of the future debt offering and settled $24.5 million of this interest rate protection agreement for proceeds in the amount of $1.5 million which is recognized in net income for the year ended December 31, 2004. In November 2004, the Consolidated Operating Partnership settled an interest rate protection agreement for $.3 million that had been designated as a cash flow hedge of $50.0 million of a forecasted debt issuance. Hedge ineffectiveness in the amount of $.1 million, due to a mismatch in the forecasted debt issuance dates, was recognized in net income. The remaining $.2 million is included in other comprehensive income and was reclassed into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
Income tax benefit increased by $4.4 million due primarily to an increase in general and administrative expense (“G&A”) due to additional G&A costs, which increases the loss from continuing operations, incurred in the year ended December 31, 2005 compared to the year ended December 31, 2004 associated with additional investment activity in the Company’s taxable REIT subsidiary. The increase in the income tax benefit is partially offset by an increase in state tax expense.
Equity in income of Other Real Estate Partnerships increased by $19.0 million primarily due to an increase in gain on sale of real estate.
Equity in income of joint ventures decreased by $32.1 million due primarily to the Company’s allocation of gain from the sale of all the properties in December 2001 joint venture and the Company’s recognition of the deferred gain on its initial sale of certain properties to the December 2001 joint venture recognized in the year ended December 31, 2004.
The $28.9 million gain on sale of real estate for the year ended December 31, 2005 resulted from the sale of nine industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $15.1 million gain on sale of real estate for the year ended December 31, 2004 resulted from the sale of four industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.
The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership for the year ended December 31, 2005 and December 31, 2004.
| | | | | | | | | |
| | | Year Ended
| |
| | | December 31, | |
| | | 2005 | | | 2004 | |
| |
| Total Revenues | | $ | 19,897 | | | $ | 38,239 | |
| Operating Expenses | | | (7,102 | ) | | | (13,234 | ) |
| Interest Expense | | | (373 | ) | | | (609 | ) |
| Depreciation and Amortization | | | (6,682 | ) | | | (10,462 | ) |
| Provision for Income Taxes Allocable to Operations | | | (2,035 | ) | | | (2,533 | ) |
| Gain on Sale of Real Estate | | | 102,742 | | | | 81,806 | |
| Provision for Income Taxes Allocable to Gain on Sale | | | (19,719 | ) | | | (8,267 | ) |
| | | | | | | | | |
| Income from Discontinued Operations | | $ | 86,728 | | | $ | 84,940 | |
| | | | | | | | | |
Income from discontinued operations, net of income taxes, for the year ended December 31, 2005 reflects the results of operations and gain on sale of real estate of $102.7 million relating to 73 industrial properties
38
that were sold during the year ended December 31, 2005 and the results of operations from five properties identified as held for sale at December 31, 2005.
Income from discontinued operations, net of income taxes, for the year ended December 31, 2004 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2005, five properties identified as held for sale at December 31, 2005, industrial properties that were sold during the year ended December 31, 2004 as well as the gain on sale of real estate of $81.8 million from the 86 industrial properties which were sold during the year ended December 31, 2004.
Comparison of Year Ended December 31, 2004 to Year Ended December 31, 2003
The Consolidated Operating Partnership’s net income available to unitholders was $102.7 million and $110.9 million for the years ended December 31, 2004 and December 31, 2003, respectively. Basic and diluted net income available to unitholders was $2.18 and $2.16 per unit, respectively, for the year ended December 31, 2004, and $2.45 and $2.44 per unit, respectively, for the year ended December 31, 2003.
The tables below summarize the Consolidated Operating Partnership’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2004 and December 31, 2003. Same store properties are in service properties owned prior to January 1, 2003. Acquired properties are properties that were acquired subsequent to December 31, 2002. Sold properties are properties that were sold subsequent to December 31, 2002. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2002 or acquisitions acquired prior to January 1, 2003 that were not placed in service as of December 31, 2002. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Consolidated Operating Partnership’s maintenance company, fees earned from the Consolidated Operating Partnership’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Consolidated Operating Partnership’s maintenance company and other miscellaneous regional expenses.
The Consolidated Operating Partnership’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The future revenues and expenses may vary materially from historical rates.
At December 31, 2004 and 2003, the occupancy rates of the Consolidated Operating Partnership’s same store properties were 89.4% and 89.4%, respectively.
| | | | | | | | | | | | | | | | | |
| | | 2004 | | | 2003 | | | $ Change | | | % Change | |
| | | ($ in 000’s) | |
| |
REVENUES | | | | | | | | | | | | | | | | |
| Same Store Properties | | $ | 212,298 | | | $ | 215,026 | | | $ | (2,728 | ) | | | (1.3 | )% |
| Acquired Properties | | | 41,935 | | | | 9,895 | | | | 32,040 | | | | 323.8 | % |
| Sold Properties | | | 18,440 | | | | 50,982 | | | | (32,542 | ) | | | (63.8 | )% |
| Properties Not Placed in-service | | | 15,593 | | | | 15,915 | | | | (322 | ) | | | (2.0 | )% |
| Other | | | 8,741 | | | | 7,641 | | | | 1,100 | | | | 14.4 | % |
| | | | | | | | | | | | | | | | | |
| | | | 297,007 | | | | 299,459 | | | | (2,452 | ) | | | (0.8 | )% |
| Discontinued Operations | | | (38,239 | ) | | | (63,294 | ) | | | 25,055 | | | | (39.6 | )% |
| | | | | | | | | | | | | | | | | |
| Total Revenues | | $ | 258,768 | | | $ | 236,165 | | | $ | 22,603 | | | | 9.6 | % |
| | | | | | | | | | | | | | | | | |
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Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $32.0 million due to properties acquired subsequent to December 31, 2002. Revenues from sold properties decreased $32.5 million due to properties sold subsequent to December 31, 2002. Other revenues increased by approximately $1.1 million due primarily to an increase in third party development and joint venture fees, partially offset by a decrease in assignment fees.
| | | | | | | | | | | | | | | | | |
| | | 2004 | | | 2003 | | | $ Change | | | % Change | |
| | | ($ in 000’s) | |
| |
PROPERTY EXPENSES | | | | | | | | | | | | | | | | |
| Same Store Properties | | $ | 69,071 | | | $ | 71,946 | | | $ | (2,875 | ) | | | (4.0 | )% |
| Acquired Properties | | | 12,443 | | | | 3,008 | | | | 9,435 | | | | 313.7 | % |
| Sold Properties | | | 5,917 | | | | 16,177 | | | | (10,260 | ) | | | (63.4 | )% |
| Properties Not Placed in-service | | | 7,156 | | | | 5,373 | | | | 1,783 | | | | 33.2 | % |
| Other | | | 6,108 | | | | 4,375 | | | | 1,733 | | | | 39.6 | % |
| | | | | | | | | | | | | | | | | |
| | | | 100,695 | | | | 100,879 | | | | (184 | ) | | | (0.2 | )% |
| Discontinued Operations | | | (13,234 | ) | | | (20,317 | ) | | | 7,083 | | | | (34.9 | )% |
| | | | | | | | | | | | | | | | | |
| Total Property Expenses | | $ | 87,461 | | | $ | 80,562 | | | $ | 6,899 | | | | 8.6 | % |
| | | | | | | | | | | | | | | | | |
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties decreased by approximately $2.9 million primarily due to a decrease in bad debt expense. Property expenses from acquired properties increased by $9.4 million due to properties acquired subsequent to December 31, 2002. Property expenses from sold properties decreased by $10.3 million due to properties sold subsequent to December 31, 2002. Property expenses from properties not in service increased $1.8 million due primarily to an increase in bad debt expense. Other expense increased by $1.7 million due primarily to increases in employee compensation.
General and administrative expense increased by approximately $13.3 million, or 52.0%, due primarily to increases in employee incentive compensation and outside professional service fees.
Amortization of deferred financing costs remained relatively unchanged.
| | | | | | | | | | | | | | | | | |
| | | 2004 | | | 2003 | | | $ Change | | | % Change | |
| | | ($ in 000’s) | |
| |
DEPRECIATION AND OTHER AMORTIZATION | | | | | | | | | | | | |
| Same Store Properties | | $ | 59,775 | | | $ | 54,756 | | | $ | 5,019 | | | | 9.2 | % |
| Acquried Properties | | | 15,796 | | | | 3,710 | | | | 12,086 | | | | 325.8 | % |
| Sold Properties | | | 4,107 | | | | 10,438 | | | | (6,331 | ) | | | (60.7 | )% |
| Properties Not in-service and Other | | | 6,909 | | | | 4,190 | | | | 2,719 | | | | 64.9 | % |
| Corporate Furniture, Fixtures & Equipment | | | 1,279 | | | | 1,222 | | | | 57 | | | | 4.7 | % |
| | | | | | | | | | | | | | | | | |
| | | | 87,866 | | | | 74,316 | | | | 13,550 | | | | 18.2 | % |
| Discontinued Operations | | | (10,462 | ) | | | (14,270 | ) | | | 3,808 | | | | (26.7 | )% |
| | | | | | | | | | | | | | | | | |
| Total Depreciation and Other Amortization | | $ | 77,404 | | | $ | 60,046 | | | $ | 17,358 | | | | 28.9 | % |
| | | | | | | | | | | | | | | | | |
The increase in depreciation and other amortization for the same store properties is primarily due to a net increase in leasing commissions and, building and tenant improvements paid in 2004 and 2003. Depreciation and other amortization from acquired properties increased by $12.1 million due to properties acquired subsequent to December 31, 2002. Depreciation and other amortization from sold properties decreased by $6.3 million due to properties sold subsequent to December 31, 2002. Depreciation and other amortization for properties not in service and other increased by $2.7 million due primarily to depreciation expense being recognized in 2004 for developments that were substantially completed.
Interest income remained relatively unchanged.
40
In March 2004, the Consolidated Operating Partnership entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73.5 million. In May 2004, the Consolidated Operating Partnership reduced the projected amount of the future debt offering and settled $24.5 million of this interest rate protection agreement for proceeds in the amount of $1.5 million which is recognized in net income for the year ended December 31, 2004. In November 2004, the Consolidated Operating Partnership settled an interest rate protection agreement for $.3 million that had been designated as a cash flow hedge of $50.0 million of a forecasted debt issuance. Hedge ineffectiveness in the amount of $.1 million, due to a mismatch in the forecasted debt issuance dates, was recognized in net income. The remaining $.2 million was included in other comprehensive income and was reclassed into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
Interest expense increased by $3.8 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2004 ($1,520.4 million), as compared to the year ended December 31, 2003 ($1,452.0 million). This was partially offset by a decrease in the weighted average interest rate for the year ended December 31, 2004 (6.60%), as compared to the year ended December 31, 2003 (6.61%), and an increase in capitalized interest for the year ended December 31, 2004 due to an increase in development activities.
The $.5 million loss on early retirement of debt for the year ended December 31, 2004 is comprised of the write-off of unamortized deferred financing costs and a prepayment penalty related to the early payoff and retirement of the Acquisition Mortgage Loan XI.
Income tax benefit increased by $2.5 million due primarily to an increase in general and administrative expense (“G&A”), which increases the loss from continuing operations, due to additional G&A costs incurred in 2004 compared to 2003 associated with additional investment activity in the Company’s taxable REIT subsidiary.
Equity in income of Other Real Estate Partnerships decreased by $14.1 million primarily due to the decrease in net operating income as a result of property sales subsequent to December 31, 2003 .
Equity in income of joint ventures increased by $35.3 million due primarily to the Consolidated Operating Partnership’s allocation of gain from the sale of all of the properties in the December 2001 Joint Venture and the Consolidated Operating Partnership’s recognition of the deferred gain on it’s initial sale of properties to the December 2001 Joint Venture in the year ended December 31, 2004.
The $15.1 million gain on sale of real estate for the year ended December 31, 2004 resulted from the sale of four industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $9.6 million gain on sale of real estate for the year ended December 31, 2003 resulted from the sale of eight industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.
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The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership for the year ended December 31, 2004 and December 31, 2003.
| | | | | | | | | |
| | | Year Ended
| |
| | | December 31, | |
| | | 2004 | | | 2003 | |
| |
| Total Revenues | | $ | 38,239 | | | $ | 63,294 | |
| Operating Expenses | | | (13,234 | ) | | | (20,317 | ) |
| Interest Expense | | | (609 | ) | | | (561 | ) |
| Depreciation and Amortization | | | (10,462 | ) | | | (14,270 | ) |
| Provision for Income Taxes Allocable to Operations | | | (2,533 | ) | | | (1,439 | ) |
| Gain on Sale of Real Estate | | | 81,806 | | | | 74,797 | |
| Provision for Income Taxes Allocable to Gain on Sale | | | (8,267 | ) | | | (1,988 | ) |
| | | | | | | | | |
| Income from Discontinued Operations | | $ | 84,940 | | | $ | 99,516 | |
| | | | | | | | | |
Income from discontinued operations, net of income taxes, for the year ended December 31, 2004 reflects the results of operations and gain on sale of real estate of $81.8 million relating to 86 industrial properties that were sold during the year ended December 31, 2004 and the results of operations from eight properties identified as held for sale at December 31, 2004.
Income from discontinued operations, net of income taxes, for the year ended December 31, 2003 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2004, eight properties identified as held for sale at December 31, 2004, industrial properties that were sold during the twelve months ended December 31, 2003 as well as the gain on sale of real estate of $74.8 million from the 113 industrial properties which were sold during the year ended December 31, 2003.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2005, the Consolidated Operating Partnership’s cash and cash equivalents, as well as restricted cash, was approximately $21.8 million. Restricted cash is comprised of gross proceeds from the sales of certain industrial properties. These sales proceeds will be disbursed as the Consolidated Operating Partnership exchanges industrial properties under Section 1031 of the Internal Revenue Code.
The Consolidated Operating Partnership has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flow from operations and other expected liquidity sources to meet these needs. The Consolidated Operating Partnership’s 7.0% Notes due in 2006, in the aggregate principal amount of $150 million are due on December 1, 2006 (the “2006 Notes”). The Company expects to satisfy the maturity of the 2006 Notes with the issuance of additional debt. With the exception of the 2006 Notes, the Consolidated Operating Partnership believes that its principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements and the minimum distribution required by the Company to maintain the Company’s REIT qualification under the Internal Revenue Code. The Consolidated Operating Partnership anticipates that these needs will be met with cash flows provided by operating activities.
The Consolidated Operating Partnership expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through the disposition of select assets, the issuance of long-term unsecured indebtedness and additional Units and preferred Units. As of December 31, 2005, approximately $500.0 million of debt securities were registered and unissued under the Securities Act of 1933, as amended. As of March 6, 2006, approximately $300.0 million of debt securities were registered and unissued under the Securities Act of 1933, as amended. As of March 6, 2006, the Consolidated Operating Partnership, through the Operating Partnership, had approximately $212.4 million available in additional borrowings under the 2005 Unsecured Line of Credit I. The 2005 Unsecured Line of Credit I bears interest at a floating rate of LIBOR plus .625% or the Prime Rate, at the Company’s election. The Unsecured Lines of
42
Credit contain certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness. The Consolidated Operating Partnership’s access to borrowings may be limited if it fails to meet any of these covenants. Also, the Consolidated Operating Partnership’s borrowing rate on its 2005 Unsecured Line of Credit I may increase in the event of a downgrade on the Consolidated Operating Partnership’s unsecured notes by the rating agencies.
The Consolidated Operating Partnership currently has credit ratings from Standard & Poor’s, Moody’s and Fitch Ratings of BBB/Baa2/BBB, respectively. The Consolidated Operating Partnership’s goal is to maintain its existing credit ratings. In the event of a downgrade, management believes the Consolidating Operating Partnership would continue to have access to sufficient capital; however, the Consolidated Operating Partnership’s cost of borrowing would increase and its ability to access certain financial markets may be limited.
Year Ended December 31, 2005
Net cash provided by operating activities of approximately $82.8 million for the year ended December 31, 2005 was comprised primarily of net income of approximately $99.2 million, the net change in operating assets and liabilities of approximately $1.4 million, and net distributions from joint ventures of $.1 million, offset by adjustments for non-cash items of approximately $17.9 million. The adjustments for the non-cash items of approximately $17.9 million are primarily comprised of the gain on sale of real estate of approximately $131.6 million, the effect of the straight-lining of rental income of approximately $7.5 million, and other of $.2 offset by an increase of the bad debt provision of approximately $1.7 million and depreciation and amortization of approximately $119.7 million.
Net cash used in investing activities of approximately $404.7 million for the year ended December 31, 2005 was comprised primarily of the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate, an increase in restricted cash that is held by an intermediary for Section 1031 exchange purposes, investments in and advances to the Other Real Estate Partnerships and contributions and investments in the Consolidated Operating Partnership’s joint ventures partially offset by the net proceeds from the sale of real estate, the repayment of mortgage loans receivable, distributions from the Other Real Estate Partnerships and distributions from the Consolidated Operating Partnership’s industrial real estate joint ventures.
During the year ended December 31, 2005, the Consolidated Operating Partnership sold 82 industrial properties comprising approximately 10.7 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 82 industrial properties and several land parcels were approximately $561.6 million.
During the year ended December 31, 2005, the Consolidated Operating Partnership acquired 149 industrial properties comprising approximately 18.4 million square feet of GLA and several land parcels. The purchase price for these acquisitions totaled approximately $690.6 million, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. The Consolidated Operating Partnership also substantially completed the development of five industrial properties comprising approximately 1.8 million square feet of GLA at an estimated cost of approximately $97.5 million.
The Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, contributed approximately $43.3 million to, and received distributions of approximately $6.8 million from, the Operating Partnership’s industrial real estate joint ventures. As of December 31, 2005, the Operating Partnership’s industrial real estate joint ventures owned 316 industrial properties comprising approximately 24.3 million square feet of GLA.
Net cash provided by financing activities of approximately $325.7 million for the year ended December 31, 2005 was comprised primarily from the net proceeds from the exercise of stock options and issuance of common and preferred units, net borrowings under the Consolidated Operating Partnership’s Unsecured Lines of Credit partially offset by the payoff and retirement of senior unsecured debt, general partnership and limited partnership units (“Unit”) and preferred general partnership unit distributions, the repurchase of restricted units and net repayments on mortgage loans payable.
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On August 23, 2005, the Consolidated Operating Partnership, through the Operating Partnership, amended and restated its $300.0 million unsecured line of credit (the “Unsecured Line of Credit”), which was due September 28, 2007, and bore interest at a floating rate of LIBOR plus .7%, or the Prime Rate, at the Consolidated Operating Partnership’s election. The amended and restated unsecured line of credit (the “2005 Unsecured Line of Credit”) will mature on September 28, 2008, has a borrowing capacity of $500.0 million, with the right, subject to certain conditions, to increase the borrowing capacity up to $600.0 million and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Consolidated Operating Partnership’s election.
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, each representing $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187.5 million. Net of offering costs, the Company received net proceeds of $181.5 from the issuance of the Series I Preferred Stock which were contributed to the Operating Partnership in exchange for Series I Cumulative Preferred Units (the “Series I Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series I Depositary Shares are payable monthly in arrears commencing December 31, 2005 at an initial dividend rate of One-Month LIBOR plus 1.25%, subject to reset on the four-month, six-month and one year anniversary of the date of issuance. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series I Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. Refer to the Subsequent Events Section (hereinafter) for the redemption of the Series I Preferred Stock and Series I Preferred Units.
On November 20, 1997, the Consolidated Operating Partnership, issued $50 million of senior unsecured debt which matured on November 21, 2005 and bore a coupon interest rate of 6.90%, which was the effective interest rate (the “2005 Notes”). On November 21, 2005 the Consolidated Operating Partnership, paid off and retired the 2005 Notes for $50 million plus accrued interest.
On December 9, 2005, the Company issued 1,250,000 shares of $.01 par value common stock (the “December 2005 Equity Offering”). The net proceeds of $48.8 million received from the December 2005 Equity Offering were contributed to the Operating Partnership in exchange for 1,250,000 Units and are reflected in the Operating Partnership’s financial statements as a general partner contribution.
For the year ended December 31, 2005, the Operating Partnership issued 366,472 Units valued, in the aggregate, at $14.7 million in exchange for interests in certain properties. These contributions are reflected in the Consolidated Operating Partnership’s financial statements as limited partner contributions.
During the year ended December 31, 2005, the Company awarded 189,878 shares of restricted common stock to certain employees and 10,164 shares of restricted common stock to certain Directors. The Consolidated Operating Partnership, through the Operating Partnership, issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $8.4 million on the date of grant. The restricted common stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting periods.
For the year ended December 31, 2005, certain employees of the Company exercised 248,881 non-qualified employee stock options. Net proceeds to the Company were approximately $6.7 million. The Consolidated Operating Partnership, through the Operating Partnership, issued 248,881 Units to the Company.
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Contractual Obligations and Commitments
The following table lists our contractual obligations and commitments as of December 31, 2005 (In thousands):
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | Payments Due by Period | |
| | | | | | Less Than
| | | | | | | | | | |
| | | Total | | | 1 Year | | | 1-3 Years | | | 3-5 Years | | | Over 5 Years | |
| |
| Operating and Ground Leases* | | $ | 40,660 | | | $ | 1,678 | | | $ | 3,185 | | | $ | 3,167 | | | $ | 32,630 | |
| Real Estate Development* | | | 93,784 | | | | 93,784 | | | | — | | | | — | | | | — | |
| Long-term Debt | | | 1,823,975 | | | | 280,026 | | | | 486,986 | | | | 147,435 | | | | 909,528 | |
| Interest Expense on Long Term Debt* | | | 858,708 | | | | 95,641 | | | | 152,739 | | | | 137,137 | | | | 473,191 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 2,817,127 | | | $ | 471,129 | | | $ | 642,910 | | | $ | 287,739 | | | $ | 1,415,349 | |
| | | | | | | | | | | | | | | | | | | | | |
Off-Balance Sheet Arrangements
Letters of credit are issued in most cases as pledges to governmental entities for development purposes or to support purchase obligations. At December 31, 2005 the Consolidated Operating Partnership has $7.6 million in outstanding letters of credit, none of which are reflected as liabilities on the Consolidated Operating Partnership’s balance sheet. The Consolidated Operating Partnership has no other off-balance sheet arrangements other than those disclosed on the previous Contractual Obligations and Commitments table.
Environmental
The Consolidated Operating Partnership incurred environmental costs of approximately $.3 million and $.5 million in 2005 and 2004, respectively. The Consolidated Operating Partnership estimates 2006 costs of approximately $.7 million. The Consolidated Operating Partnership estimates that the aggregate cost which needs to be expended in 2006 and beyond with regard to currently identified environmental issues will not exceed approximately $1.2 million, a substantial amount of which will be the primary responsibility of the tenant, the seller to the Consolidated Operating Partnership or another responsible party. This estimate was determined by a third party evaluation.
Inflation
For the last several years, inflation has not had a significant impact on the Consolidated Operating Partnership because of the relatively low inflation rates in the Consolidated Operating Partnership’s markets of operation. Most of the Consolidated Operating Partnership’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing the Consolidated Operating Partnership’s exposure to increases in costs and operating expenses resulting from inflation. In addition, many of the outstanding leases expire within six years which may enable the Consolidated Operating Partnership to replace existing leases with new leases at higher base rentals if rents of existing leases are below the then-existing market rate.
Ratio of Earnings to Fixed Charges
The ratio of earnings to fixed charges was 1.08, 1.38 and 1.32 for the years ended December 31, 2005, 2004 and 2003, respectively. The decrease in earnings to fixed charges between fiscal years 2005 and 2004 is primarily due to a decrease in income from continuing operations in fiscal year 2005 due to a decrease in equity in income from joint ventures and an increase in depreciation and amortization expense for fiscal year 2005 as compared to fiscal year 2004 as discussed in “Results of Operations” above. The increase in earnings to fixed charges between fiscal years 2004 and 2003 is primarily due to an increase in income from continuing
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operations in fiscal year 2004 due to an increase in the equity in income of joint ventures, as discussed in “Results of Operations” above.
Market Risk
The following discussion about the Consolidated Operating Partnership’s risk-management activities includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.
This analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by the Consolidated Operating Partnership at December 31, 2005 that are sensitive to changes in the interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast.
In the normal course of business, the Consolidated Operating Partnership also faces risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis.
At December 31, 2005, $1,353.8 million (approximately 74.7% of total debt at December 31, 2005) of the Consolidated Operating Partnership’s debt was fixed rate debt and $457.5 million (approximately 25.3% of total debt at December 31, 2005) of the Consolidated Operating Partnership’s debt was variable rate debt. Currently, the Consolidated Operating Partnership does not enter into financial instruments for trading or other speculative purposes.
For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not earnings or cash flows of the Consolidated Operating Partnership. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect the Consolidated Operating Partnership’s future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on the Consolidated Operating Partnership until the Consolidated Operating Partnership is required to refinance such debt. See Note 6 to the consolidated financial statements for a discussion of the maturity dates of the Consolidated Operating Partnership’s various fixed rate debt.
Based upon the amount of variable rate debt outstanding at December 31, 2005, a 10% increase or decrease in the interest rate on the Consolidated Operating Partnership’s variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $2.3 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2005 by approximately $47.3 million, to $1,424.5 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2005 by approximately $56.2 million, to $1,528.0 million.
Subsequent Events
On January 3, 2006, the Operating Partnership paid fourth quarter 2005 distributions of $53.906 per Unit Series C Preferred Units, totaling, in the aggregate, approximately $1.1 million; and a monthly distribution of $1,930.243 per Unit on its Series I Preferred Units, totaling, in the aggregate, approximately $1.5 million.
On January 5, 2006, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., settled the interest rate protection agreement entered into in October 2005 with a notional value of $50 million for a payment of $.2 million.
The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $.4 million. The Series I Preferred Units were redeemed on January 13, 2006 as well. In accordance with EITF D-42, due to the redemption of the Series I Preferred Units, the initial offering costs associated with the issuance of the Series I Preferred Units of approximately $.7 million will be reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per Unit for the three months ended March 31, 2006.
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On January 10, 2006, the Operating Partnership, issued $200 million of senior unsecured debt which matures on January 15, 2016 and bears a coupon interest rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. In December 2005, the Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. On January 9, 2006 the Operating Partnership settled the interest rate protection agreements for a payment of approximately $1.7 million, which will be included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements will be amortized over the life of the 2016 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Operating Partnership’s effective interest rate on the 2016 Notes is 5.91%. The 2016 Notes contain certain covenants, including limitations on incurrence of debt and debt service coverage.
On January 23, 2006, the Operating Partnership paid a fourth quarter 2005 distribution of $.7000 per Unit, totaling approximately $35.8 million.
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Flexible Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds from the issuance of the Series J Preferred Stock was contributed to the Operating Partnership in exchange for Series J Cumulative Preferred Units (the “Series J Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the depositary shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, the Company will increase the dividend on the preferred shares to a rate of 8.25% of the liquidation preference per year. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. The Series J Preferred Stock is not redeemable prior to January 15, 2011. However, if at any time both (i) the depositary shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. On or after January 15, 2011, the Series J Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
On March 8, 2006, the Consolidated Operating Partnership declared a first quarter 2006 distribution of $.70 per Unit which is payable on April 17, 2006. The Consolidated Operating Partnership also declared first quarter 2006 preferred unit distributions of $53.906 per Unit on its 85/8% Series C Cumulative Preferred Units, totaling, in the aggregate, approximately $1.1 million, which is payable on March 31, 2006; semi-annual dividends of $3,118.00 per Unit on its Series F Preferred Unit, totaling, in the aggregate, approximately $1.6 million, which is payable on March 31, 2006; and semi-annual dividends of $3,618.00 per Unit on its Series G Preferred Unit, totaling, in the aggregate, approximately $.9 million, which is payable on March 31, 2006; and prorated quarterly dividends of $3,927.08 per Unit on its Series J Preferred Unit, totaling, in the aggregate, approximately $2.4 million, which is payable on March 31, 2006.
From January 1, 2006 to March 8, 2006, the Company awarded 303,142 shares of restricted common stock to certain employees and 1,169 shares of restricted common stock to certain Directors. The Operating Partnership issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $12.0 million on the date of grant. The restricted common stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting period.
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From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142.4 million (approximately $.9 million of Units). The Consolidated Operating Partnership also sold 16 industrial properties including the industrial property that is accounted for as a build to suit development for sale, for approximately $240.1 million of gross proceeds during this period.
Related Party Transactions
The Consolidated Operating Partnership periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the President and Chief Executive Officer and a director of the Company, is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2005 and 2004, this relative received approximately $.3 and $.03 million in brokerage commissions.
Other
In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FAS 153 did not have a material effect on the Operating Partnership’s consolidated financial statements.
In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is required to be measured based on the fair value of the equity of liability instruments issued. SFAS 123(R) also contains additional minimum disclosure requirements that including, but not limited to, the valuation method and assumptions used, amounts of compensation capitalized and modifications made. The effective date of SFAS 123(R) was subsequently amended by the SEC to be as of the beginning of the first interim or annual reporting period of the first fiscal year that begins on or after June 15, 2005, and allows several different methods of transition. The Consolidated Operating Partnership expects to adopt the pronouncement as required on January 1, 2006 using the prospective method and does not believe that the adoption of SFAS 123(R) will have a material impact on its financial position, results of operations or cash flows.
In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143. A conditional asset retirement obligation refers to a legal obligation to retire assets where the timingand/or method of settlement are conditioned on future events. FIN No. 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The Consolidated Operating Partnership adopted the provisions of FIN 47 in 2005. The adoption of this Interpretation did not have a material impact on the Operating Partnerships’ consolidated financial position, results of operations or cash flows.
In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements.” FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
In June 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regardingEITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is
48
the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined inEITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, “Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Operating Partnership adoptedEITF 04-05 as of December 31, 2005. The adoption of the EITF had no impact on the Operating partnerships’ results of operations, financial position or liquidity.
In June 2005, the FASB ratified the consensus reached by the EITF regardingEITF 05-6, “Determining the Amortization Period for Leasehold Improvements.” The guidance requires that leasehold improvements acquired in a business combination, or purchased subsequent to the inception of a lease, be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase. The guidance is effective for periods beginning after June 29, 2005.EITF 05-6 does not impact the Operating Partnership’s results of operations, financial position, or liquidity.
| |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
Response to this item is included in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.
| |
| Item 8. | Financial Statements and Supplementary Data |
See Index to Financial Statements and Financial Statement Schedule onpage F-1 included in Item 15.
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
None.
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| Item 9A. | Controls and Procedures |
Disclosure Controls and Procedures
The Consolidated Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Consolidated Operating Partnership’s periodic reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Consolidated Operating Partnership’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.
The Consolidated Operating Partnership carried out an evaluation, under the supervision and with the participation of the Consolidated Operating Partnership’s management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Consolidated Operating Partnership’s disclosure controls and procedures pursuant to Exchange ActRule 15d-15(b) as of the end of the period covered by this report. Based upon this evaluation, the Consolidated Operating Partnership’s principal executive officer and principal financial officer concluded that the Consolidated Operating Partnership’s disclosure controls and procedures were effective as of the end of the period covered by this report.
Management’s Report on Internal Control Over Financial Reporting
Management of the Consolidated Operating Partnership is responsible for establishing and maintaining adequate internal control over financial reporting. The Consolidated Operating Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
49
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Management of the Consolidated Operating Partnership has assessed the effectiveness of the Consolidated Operating Partnership’s internal control over financial reporting as of December 31, 2005. In making its assessment of internal control over financial reporting, management used the criteria described in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Management of the Consolidated Operating Partnership has concluded that, as of December 31, 2005, the Consolidated Operating Partnership’s internal control over financial reporting was effective.
Management’s assessment of the effectiveness of the Consolidated Operating Partnership’s internal control over financial reporting as of December 31, 2005 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein within Item 15. See Report of Independent Registered Public Accounting Firm onpage F-2 of thisForm 10-K.
Changes in Internal Control Over Financial Reporting
On December 22, 2005, the Consolidated Operating Partnership filed aForm 8-K disclosing that, on December 19, 2005, management and the audit committee of the Consolidated Operating Partnership determined that the Consolidated Operating Partnership’s consolidated balance sheet as of December 31, 2004 and consolidated statement of changes in partners’ capital for the year then ended contained in its annual report onForm 10-K for the year then ended and its consolidated balance sheets as of March 31, 2005, June 30, 2005 and September 30, 2005 contained in its quarterly reports onForm 10-Q for the periods ended on such dates (such financial statements being herein collectively referred to as the “Affected Financial Statements”) should no longer be relied upon and should be restated because of errors in such financial statements. These errors did not impact the Consolidated Operating Partnership’s consolidated statements of operations and comprehensive income or its consolidated statements of cash flows and, consequently, did not impact earnings per unit (basic and diluted).
The errors had no impact on the consolidated financial statements of First Industrial Realty Trust, Inc. (the “REIT”), which is the general partner of the Consolidated Operating Partnership, and did not constitute a material weakness in the internal control over financial reporting of the REIT.
The errors related to how the Consolidated Operating Partnership recorded the redemption of its Series D, Series E and Series H General Partner Preferred Units and the issuance of its Series F, Series G and Series H General Partner Preferred Units. In its consolidated statement of changes in partners’ capital for the year ended December 31, 2004, the Consolidated Operating Partnership incorrectly recorded the redemption of its Series D, Series E and Series H General Partner Preferred Units as a reduction to the General Partner Unit account dollar balance instead of as a reduction to the General Partner Preferred Unit account dollar balance and the issuance of its Series F, Series G and Series H General Partner Preferred Units as an increase to the General Partner Unit account dollar balance instead of as an increase to the General Partner Preferred Unit account dollar balance. Additionally, the redemption of its Series D, Series E and Series H General Partner Preferred Units that was reflected in the General Partner Unit account dollar balance was effected at par, which was in excess of the related carrying amounts. Such excess should have been treated as a preferred unit distribution in accordance with Emerging Issues Task Force Topic D-42, “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock” (“EITF Topic D-42”). EITF Topic D-42 requires the difference between the cost of redeeming preferred stock and the carrying value of such preferred stock on the date of the redemption to be treated as a preferred distribution. Due to the determination to restate the Affected Financial Statements as described above, management concluded that, as of December 31, 2004, March 31, 2005, June 30, 2005 and September 30, 2005, a material weakness in the Consolidated Operating Partnership’s internal control over financial reporting existed.
A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be
50
prevented or detected. As of December 31, 2004, March 31, 2005, June 30, 2005 and September 30, 2005, the Consolidated Operating Partnership did not maintain effective controls over the accuracy, presentation, monitoring and review of its General Partner Unit and General Partner Preferred Unit account dollar balances. Specifically, the Consolidated Operating Partnership did not maintain effective controls over the accuracy, presentation, monitoring and review of data related to preferred unit issuances and redemptions as reflected on a supporting spreadsheet schedule used by management to prepare the Consolidated Operating Partnership’s financial statements. This control deficiency resulted in the restatement of the Consolidated Operating Partnership’s 2004 consolidated financial statements and the Consolidated Operating Partnership’s first, second and third quarter consolidated financial statements in 2005. Accordingly, management concluded that this control deficiency constituted a material weakness. Management took immediate action upon identification of this material weakness and reviewed the Consolidated Operating Partnership’s partners’ capital accounts and corrected the General Partner Preferred Unit and General Partner Unit account dollar balances. Additionally, management implemented additional controls to remediate this control deficiency. Specifically, such additional controls involved the completion of a schedule which reconciles the equity accounts of the Consolidated Operating Partnership to the equity accounts of the Company.
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| Item 9B. | Other Information |
None.
PART III
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| Item 10, 11, 12, 13 and 14. | Directors and Executive Officers of the Registrant, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions and Principal Accountant Fees and Services |
The Operating Partnership has no directors or executive officers; instead it is managed by its sole general partner, the Company. The information with respect to the sole general partner of the Operating Partnership required by Item 10, Item 11, Item 12, Item 13 and Item 14 is incorporated herein by reference to the Company’s definitive proxy statement expected to be filed with the Securities and Exchange Commission no later than 120 days after the Company’s fiscal year (which will be filed no later than 120 days after the end of the Company’s fiscal year end). Information contained in the parts of such proxy statement captioned “Stock Performance Graph”, “Report of the Compensation Committee”, “Report of the Audit Committee” and in statements with respect to the independence of the Audit Committee, (except as such statements specifically relate to the independence of such committee’s financial expert) and regarding the Audit Committee Charter, are specifically not incorporated herein by reference.
PART IV
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| Item 15. | Exhibits and Financial Statement Schedules |
(a) Financial Statements, Financial Statement Schedule and Exhibits (1 & 2) See Index to Financial Statements and Financial Statement Schedule onpage F-1.
(3) Exhibits:
| | | | | |
Exhibit No. | | Description |
| |
| | 3 | .1 | | Tenth Amended and Restated Limited Partnership Agreement of First Industrial, L.P. (the “LP Agreement”) dated January 13, 2006 (incorporated by reference to Exhibit 10.2 of theForm 8-K of the Company filed January 17, 2006, FileNo. 1-13102) |
| | 3 | .2 | | Amendment No. 1 dated January 20, 2006 to the LP Agreement (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2005, FileNo. 1-13102) |
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| | | | | |
Exhibit No. | | Description |
| |
| | 4 | .1 | | Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of theForm 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/A No. 1 of the Company filed May 30, 1997, FileNo. 1-13102) |
| | 4 | .2 | | Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of theForm 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/A No. 1 of the Company filed May 30, 1997, FileNo. 1-13102) |
| | 4 | .3 | | Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of theForm 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, FileNo. 333-21873) |
| | 4 | .4 | | Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 ofForm 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, FileNo. 333-21873) |
| | 4 | .5 | | 7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 1997, FileNo. 1-13102) |
| | 4 | .6 | | 7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 1997, FileNo. 1-13102) |
| | 4 | .7 | | Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of theForm 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, FileNo. 333-21873) |
| | 4 | .8 | | 7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of theForm 8-K of the Operating Partnership dated July 15, 1998, FileNo. 333-21873) |
| | 4 | .9 | | Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of theForm 8-K of the Operating Partnership dated July 15, 1998, FileNo. 333-21873) |
| | 4 | .10 | | 7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of the Operating Partnership’s Annual Report onForm 10-K for the year ended December 31, 2000, FileNo. 333-21873) |
| | 4 | .11 | | Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011(incorporated by reference to Exhibit 4.16 of the Operating Partnership’s Annual Report onForm 10-K for the year ended December 31, 2000, FileNo. 333-21873) |
| | 4 | .12 | | Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of the Operating Partnership’s Annual Report onForm 10-K for the year ended December 31, 2000, FileNo. 333-21873) |
| | 4 | .13 | | Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and the U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Operating Partnership’sForm 8-K, dated April 4, 2002, FileNo. 333-21873) |
52
| | | | | |
Exhibit No. | | Description |
| |
| | 4 | .14 | | Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. and 7.75% Notes due in 2032 in the principal amount of $50 million issued by First Industrial L.P. (incorporated by reference to Exhibit 4.2 of the Operating Partnership’sForm 8-K of First Industrial, L.P. dated April 4, 2002, FileNo. 333-21873) |
| | 4 | .15 | | Form of 7.75% Notes due 2032 in the principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Operating Partnership’sForm 8-K, dated April 4, 2002, FileNo. 333-21873) |
| | 4 | .16 | | Supplemental Indenture No. 8, dated as of May 17,relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-K of First Industrial, L.P., dated May 27, 2004, FileNo. 333-21873) |
| | 4 | .17 | | Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-K of First Industrial, L.P., dated June 17, 2004, FileNo. 333-21873) |
| | 4 | .18 | | Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-K of the Company, filed January 11, 2006, FileNo. 1-13102) |
| | 10 | .1 | | Sales Agreement by and among the Company and First Industrial, L.P., and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of theForm 8-K of First Industrial, L.P., dated September 16, 2004, FileNo. 333-21873) |
| | 10 | .2 | | Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase, NA and certain other banks (incorporated by reference to Exhibit 10.1 of theForm 8-K of the Company, filed August 25, 2005, FileNo. 1-13102) |
| | 12 | .1* | | Computation of ratios of earnings to fixed charges of First Industrial, L.P. |
| | 21 | .1 | | Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company’s Annual Report onForm 10-K for the year ended December 31, 2005, FileNo. 1-13102) |
| | 23* | | | Consent of PricewaterhouseCoopers LLP |
| | 31 | .1* | | Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant toRule 13a-14(a) under the Securities Exchange Act of 1934, as amended. |
| | 31 | .2* | | Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant toRule 13a-14(a) under the Securities Exchange Act of 1934, as amended. |
| | 32 | .1** | | Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002. |
| | |
| * | | Filed herewith. |
| |
| ** | | Furnished herewith |
53
EXHIBIT INDEX
| | | | | |
Exhibit No. | | Description |
| |
| | 3 | .1 | | Tenth Amended and Restated Limited Partnership Agreement of First Industrial, L.P. (the “LP Agreement”) dated January 13, 2006 (incorporated by reference to Exhibit 10.2 of theForm 8-K of the Company filed January 17, 2006, FileNo. 1-13102) |
| | 3 | .2 | | Amendment No. 1 dated January 20, 2006 to the LP Agreement (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2005, FileNo. 1-13102) |
| | 4 | .1 | | Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of theForm 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/A No. 1 of the Company filed May 30, 1997, FileNo. 1-13102) |
| | 4 | .2 | | Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of theForm 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/A No. 1 of the Company filed May 30, 1997, FileNo. 1-13102) |
| | 4 | .3 | | Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of theForm 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, FileNo. 333-21873) |
| | 4 | .4 | | Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 ofForm 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, FileNo. 333-21873) |
| | 4 | .5 | | 7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 1997, FileNo. 1-13102) |
| | 4 | .6 | | 7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 1997, FileNo. 1-13102) |
| | 4 | .7 | | Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of theForm 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, FileNo. 333-21873) |
| | 4 | .8 | | 7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of theForm 8-K of the Operating Partnership dated July 15, 1998, FileNo. 333-21873) |
| | 4 | .9 | | Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of theForm 8-K of the Operating Partnership dated July 15, 1998, FileNo. 333-21873) |
| | 4 | .10 | | 7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of the Operating Partnership’s Annual Report onForm 10-K for the year ended December 31, 2000, FileNo. 333-21873) |
| | 4 | .11 | | Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011(incorporated by reference to Exhibit 4.16 of the Operating Partnership’s Annual Report onForm 10-K for the year ended December 31, 2000, FileNo. 333-21873) |
54
| | | | | |
Exhibit No. | | Description |
| |
| | 4 | .12 | | Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of the Operating Partnership’s Annual Report onForm 10-K for the year ended December 31, 2000, FileNo. 333-21873) |
| | 4 | .13 | | Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and the U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Operating Partnership’sForm 8-K, dated April 4, 2002, FileNo. 333-21873) |
| | 4 | .14 | | Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. and 7.75% Notes due in 2032 in the principal amount of $50 million issued by First Industrial L.P. (incorporated by reference to Exhibit 4.2 of the Operating Partnership’sForm 8-K of First Industrial, L.P. dated April 4, 2002, FileNo. 333-21873) |
| | 4 | .15 | | Form of 7.75% Notes due 2032 in the principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Operating Partnership’sForm 8-K, dated April 4, 2002, FileNo. 333-21873) |
| | 4 | .16 | | Supplemental Indenture No. 8, dated as of May 17,relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-K of First Industrial, L.P., dated May 27, 2004, FileNo. 333-21873) |
| | 4 | .17 | | Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-K of First Industrial, L.P., dated June 17, 2004, FileNo. 333-21873) |
| | 4 | .18 | | Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-K of the Company, filed January 11, 2006, FileNo. 1-13102) |
| | 10 | .1 | | Sales Agreement by and among the Company and First Industrial, L.P., and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of theForm 8-K of First Industrial, L.P., dated September 16, 2004, FileNo. 333-21873) |
| | 10 | .2 | | Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase, NA and certain other banks (incorporated by reference to Exhibit 10.1 of theForm 8-K of the Company, filed August 25, 2005, FileNo. 1-13102) |
| | 12 | .1* | | Computation of ratios of earnings to fixed charges of First Industrial, L.P. |
| | 21 | .1 | | Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company’s Annual Report onForm 10-K for the year ended December 31, 2005, FileNo. 1-13102) |
| | 23* | | | Consent of PricewaterhouseCoopers LLP |
| | 31 | .1* | | Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant toRule 13a-14(a) under the Securities Exchange Act of 1934, as amended |
| | 31 | .2* | | Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant toRule 13a-14(a) under the Securities Exchange Act of 1934, as amended |
| | 32 | .1** | | Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002 |
| | |
| * | | Filed herewith. |
| |
| ** | | Furnished herewith |
55
FIRST INDUSTRIAL, L.P.
INDEX TO FINANCIAL STATEMENTS
| | | | | |
| | | Page |
| |
FINANCIAL STATEMENTS | | | | |
| | | F-2 | |
| | | F-4 | |
| | | F-5 | |
| | | F-6 | |
| | | F-7 | |
| | | F-8 | |
| | | F-9 | |
OTHER REAL ESTATE PARTNERSHIPS
INDEX TO FINANCIAL STATEMENTS
| | | | | |
| | | Page |
| |
FINANCIAL STATEMENTS | | | | |
| | | F-50 | |
| | | F-51 | |
| | | F-52 | |
| | | F-53 | |
| | | F-54 | |
| | | F-55 | |
FIRST INDUSTRIAL, L.P.
FINANCIAL STATEMENT SCHEDULE
| | | | | |
| | | Page |
| |
FINANCIAL STATEMENT SCHEDULE | | | | |
| | | S-1 | |
F-1
Report of Independent Registered Public Accounting Firm
To the Partners of
First Industrial, L.P.:
We have completed integrated audits of First Industrial, L.P.’s 2005 and 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2005 and an audit of its 2003 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.
Consolidated financial statements and financial statement schedule
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of First Industrial, L.P. and its subsidiaries (“the Consolidated Operating Partnership”) at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Consolidated Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
Internal control over financial reporting
Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Consolidated Operating Partnership maintained effective internal control over financial reporting as of December 31, 2005 based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Consolidated Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005 based on criteria established inInternal Control — Integrated Framework issued by the COSO. The Consolidated Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Consolidated Operating Partnership’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.
F-2
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
PricewaterhouseCoopers LLP
Chicago, Illinois
March 16, 2006
F-3
FIRST INDUSTRIAL, L.P.
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| | | (Dollars in thousands, except share and per share data) | |
| |
ASSETS |
| Assets: | | | | | | | | |
| Investment in Real Estate: | | | | | | | | |
| Land | | $ | 490,359 | | | $ | 423,836 | |
| Buildings and Improvements | | | 2,340,504 | | | | 2,039,486 | |
| Construction in Progress | | | 66,074 | | | | 23,092 | |
| Less: Accumulated Depreciation | | | (355,755 | ) | | | (321,003 | ) |
| | | | | | | | | |
| Net Investment in Real Estate | | | 2,541,182 | | | | 2,165,411 | |
| | | | | | | | | |
| Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $1,622 and $2,908 at December 31, 2005 and December 31, 2004 | | | 16,840 | | | | 50,286 | |
| Investments in and Advances to Other Real Estate Partnerships | | | 378,864 | | | | 339,967 | |
| Cash and Cash Equivalents | | | 6,811 | | | | 3,069 | |
| Restricted Cash | | | 14,945 | | | | 25 | |
| Tenant Accounts Receivable, Net | | | 7,627 | | | | 6,509 | |
| Investments in Joint Ventures | | | 44,330 | | | | 5,489 | |
| Deferred Rent Receivable, Net | | | 21,520 | | | | 15,928 | |
| Deferred Financing Costs, Net | | | 10,907 | | | | 11,569 | |
| Deferred Leasing Intangibles, Net | | | 70,879 | | | | 38,200 | |
| Prepaid Expenses and Other Assets, Net | | | 116,560 | | | | 84,698 | |
| | | | | | | | | |
| Total Assets | | $ | 3,230,465 | | | $ | 2,721,151 | |
| | | | | | | | | |
| |
LIABILITIES AND PARTNERS’ CAPITAL |
| Liabilities: | | | | | | | | |
| Mortgage Loans Payable, Net | | $ | 54,929 | | | $ | 57,449 | |
| Senior Unsecured Debt, Net | | | 1,298,893 | | | | 1,347,524 | |
| Unsecured Lines of Credit | | | 457,500 | | | | 167,500 | |
| Accounts Payable and Accrued Expenses | | | 116,249 | | | | 68,577 | |
| Deferred Leasing Intangibles, Net | | | 22,169 | | | | 8,451 | |
| Rents Received in Advance and Security Deposits | | | 27,578 | | | | 26,441 | |
| Dividends Payable | | | 39,509 | | | | 35,487 | |
| | | | | | | | | |
| Total Liabilities | | | 2,016,827 | | | | 1,711,429 | |
| | | | | | | | | |
| Commitments and Contingencies | | | — | | | | — | |
| Partners’ Capital: | | | | | | | | |
| General Partner Preferred Units (21,500 and 20,750 units issued and outstanding at December 31, 2005 and 2004, respectively), with a liquidation preference of $312,500 and $125,000, respectively | | | 303,068 | | | | 121,584 | |
| General Partner Units (44,444,710 and 42,834,091 units issued and outstanding at December 31, 2005 and 2004, respectively) | | | 773,921 | | | | 757,840 | |
| Unamortized Value of General Partnership Restricted Units | | | (16,825 | ) | | | (19,611 | ) |
| Limited Partners’ Units (6,740,742 and 6,455,914 units issued and outstanding at December 31, 2005 and 2004, respectively) | | | 159,832 | | | | 153,609 | |
| Accumulated Other Comprehensive Loss | | | (6,358 | ) | | | (3,700 | ) |
| | | | | | | | | |
| Total Partners’ Capital | | | 1,213,638 | | | | 1,009,722 | |
| | | | | | | | | |
| Total Liabilities and Partners’ Capital | | $ | 3,230,465 | | | $ | 2,721,151 | |
| | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-4
FIRST INDUSTRIAL, L.P.
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| | | (In thousands except per unit data) | |
| |
| Revenues: | | | | | | | | | | | | |
| Rental Income | | $ | 222,997 | | | $ | 193,156 | | | $ | 176,720 | |
| Tenant Recoveries and Other Income | | | 84,119 | | | | 65,612 | | | | 59,445 | |
| Build to Suit Development for Sale Revenues | | | 16,241 | | | | — | | | | | |
| | | | | | | | | | | | | |
| Total Revenues | | | 323,357 | | | | 258,768 | | | | 236,165 | |
| | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | |
| Real Estate Taxes | | | 47,003 | | | | 40,026 | | | | 37,121 | |
| Repairs and Maintenance | | | 24,677 | | | | 20,862 | | | | 19,053 | |
| Property Management | | | 17,042 | | | | 11,699 | | | | 8,955 | |
| Utilities | | | 10,721 | | | | 8,695 | | | | 7,299 | |
| Insurance | | | 2,317 | | | | 2,882 | | | | 2,469 | |
| Other | | | 6,759 | | | | 3,297 | | | | 5,665 | |
| General and Administrative | | | 54,846 | | | | 38,912 | | | | 25,607 | |
| Amortization of Deferred Financing Costs | | | 2,122 | | | | 1,928 | | | | 1,761 | |
| Depreciation and Other Amortization | | | 105,714 | | | | 77,404 | | | | 60,046 | |
| Expenses from Build to Suit Development for Sale | | | 15,574 | | | | — | | | | — | |
| | | | | | | | | | | | | |
| Total Expenses | | | 286,775 | | | | 205,705 | | | | 167,976 | |
| | | | | | | | | | | | | |
| Other Income/Expense: | | | | | | | | | | | | |
| Interest Income | | | 1,075 | | | | 2,025 | | | | 1,698 | |
| Mark-to-Market/Gain on Settlement of Interest Rate Protection Agreements | | | 811 | | | | 1,583 | | | | — | |
| Interest Expense | | | (108,164 | ) | | | (98,458 | ) | | | (94,637 | ) |
| Gain (Loss) From Early Retirement of Debt | | | 82 | | | | (515 | ) | | | — | |
| | | | | | | | | | | | | |
| Total Other Income/Expense | | | (106,196 | ) | | | (95,365 | ) | | | (92,939 | ) |
| Loss from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Income Tax Benefit | | | (69,614 | ) | | | (42,302 | ) | | | (24,750 | ) |
| Equity in Income of Other Real Estate Partnerships | | | 48,212 | | | | 29,203 | | | | 43,332 | |
| Equity in Income of Joint Ventures | | | 3,698 | | | | 35,840 | | | | 539 | |
| Income Tax Benefit | | | 12,033 | | | | 7,673 | | | | 5,147 | |
| | | | | | | | | | | | | |
| (Loss) Income from Continuing Operations | | | (5,671 | ) | | | 30,414 | | | | 24,268 | |
| Income from Discontinued Operations (Including Gain on Sale of Real Estate of $102,742, $81,806 and $74,797 for the Years Ended December 31, 2005, 2004 and 2003 respectively) | | | 108,482 | | | | 95,740 | | | | 102,943 | |
| Provision for Income Taxes Allocable to Discontinued Operations (Including $19,719, $8,267 and $1,988 allocable to Gain on Sale of Real Estate for the Year Ended December 31, 2005, 2004 and 2003, respectively) | | | (21,754 | ) | | | (10,800 | ) | | | (3,427 | ) |
| | | | | | | | | | | | | |
| Income Before Gain on Sale of Real Estate | | | 81,057 | | | | 115,354 | | | | 123,784 | |
| Gain on Sale of Real Estate | | | 28,870 | | | | 15,112 | | | | 9,594 | |
| Provision for Income Taxes Allocable to Gain on Sale of Real Estate | | | (10,711 | ) | | | (5,312 | ) | | | (2,322 | ) |
| | | | | | | | | | | | | |
| Net Income | | | 99,216 | | | | 125,154 | | | | 131,056 | |
| Less: Preferred Unit Distributions | | | (10,688 | ) | | | (14,488 | ) | | | (20,176 | ) |
| Less: Redemption of Preferred Units | | | — | | | | (7,959 | ) | | | — | |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 88,528 | | | $ | 102,707 | | | $ | 110,880 | |
| | | | | | | | | | | | | |
| Basic Earnings Per Unit: | | | | | | | | | | | | |
| Income from Continuing Operations Available to Unitholders | | $ | 0.04 | | | $ | 0.38 | | | $ | 0.25 | |
| | | | | | | | | | | | | |
| Income from Discontinued Operations | | $ | 1.77 | | | $ | 1.80 | | | $ | 2.20 | |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 1.81 | | | $ | 2.18 | | | $ | 2.45 | |
| | | | | | | | | | | | | |
| Weighted Average Units Outstanding | | | 48,968 | | | | 47,136 | | | | 45,322 | |
| | | | | | | | | | | | | |
| Diluted Earnings Per Unit: | | | | | | | | | | | | |
| Income from Continuing Operations Available to Unitholders | | $ | 0.04 | | | $ | 0.37 | | | $ | 0.25 | |
| | | | | | | | | | | | | |
| Income from Discontinued Operations | | $ | 1.76 | | | $ | 1.79 | | | $ | 2.19 | |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 1.80 | | | $ | 2.16 | | | $ | 2.44 | |
| | | | | | | | | | | | | |
| Weighted Average Units Outstanding | | | 49,193 | | | | 47,467 | | | | 45,443 | |
| | | | | | | | | | | | | |
| Distributions Per Unit | | $ | 2.7850 | | | $ | 2.7500 | | | $ | 2.7400 | |
| | | | | | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-5
FIRST INDUSTRIAL , LP.
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
Net Income | | $ | 99,216 | | | $ | 125,154 | | | $ | 131,056 | |
Other Comprehensive (Loss) Income: | | | | | | | | | | | | |
| Settlement of Interest Rate Protection Agreements | | | — | | | | 6,816 | | | | — | |
| Reclassification of Settlement of Interest Rate Protection Agreements to Net Income | | | (159 | ) | | | — | | | | — | |
Mark-to-Market of Interest Rate Protection Agreements | | | (1,414 | ) | | | 106 | | | | 251 | |
| Amortization of Interest Rate Protection Agreements | | | (1,085 | ) | | | (512 | ) | | | 198 | |
| | | | | | | | | | | | | |
Comprehensive Income | | $ | 96,558 | | | $ | 131,564 | | | $ | 131,505 | |
| | | | | | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-6
FIRST INDUSTRIAL, L.P.
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| General Partner Preferred Units — Beginning of Year | | $ | 121,584 | | | $ | 240,697 | | | $ | 240,697 | |
| Distributions | | | (10,688 | ) | | | (22,447 | ) | | | (20,176 | ) |
| Issuance of Preferred Units | | | 181,484 | | | | 194,424 | | | | — | |
| Redemption of Preferred Units | | | — | | | | (313,537 | ) | | | — | |
| Net Income | | | 10,688 | | | | 22,447 | | | | 20,176 | |
| | | | | | | | | | | | | |
| General Partner Preferred Units — End of Year | | $ | 303,068 | | | $ | 121,584 | | | $ | 240,697 | |
| | | | | | | | | | | | | |
| General Partner Units — Beginning of Year | | $ | 757,840 | | | $ | 687,721 | | | $ | 665,647 | |
| Contributions and Issuance of General Partner Units | | | 56,122 | | | | 99,280 | | | | 15,117 | |
| Issuance of General Partner Restricted Units | | | 8,381 | | | | 8,379 | | | | 20,641 | |
| Purchase of General Partnership Units | | | — | | | | — | | | | (997 | ) |
| Repurchase and Retirement of Restricted Units/Units | | | (3,285 | ) | | | (3,751 | ) | | | (1,865 | ) |
| Restricted Unit Forfeitures | | | (2,972 | ) | | | (14,095 | ) | | | — | |
| Amortization of Stock Based Compensation | | | — | | | | — | | | | 54 | |
| Distributions | | | (120,995 | ) | | | (114,569 | ) | | | (108,171 | ) |
| Unit Conversions | | | 1,951 | | | | 6,195 | | | | 2,750 | |
| Net Income | | | 76,879 | | | | 88,680 | | | | 94,545 | |
| | | | | | | | | | | | | |
| General Partner Units — End of Year | | $ | 773,921 | | | $ | 757,840 | | | $ | 687,721 | |
| | | | | | | | | | | | | |
| Unamort. Value of Gen. Partner Restricted Units — Beg. of Year | | $ | (19,611 | ) | | $ | (19,035 | ) | | $ | (4,307 | ) |
| Issuance of General Partner Restricted Units | | | (8,381 | ) | | | (8,379 | ) | | | (20,641 | ) |
| Amortization of General Partner Restricted Units | | | 8,845 | | | | 6,866 | | | | 5,913 | |
| Restricted Unit Forfeitures | | | 2,322 | | | | 937 | | | | — | |
| | | | | | | | | | | | | |
| Unamort. Value of Gen. Partner Restricted Units — End of Year | | $ | (16,825 | ) | | $ | (19,611 | ) | | $ | (19,035 | ) |
| | | | | | | | | | | | | |
| Limited Partners Units — Beginning of Year | | $ | 153,609 | | | $ | 163,794 | | | $ | 168,740 | |
| Contributions and Issuance of Limited Partner Units | | | 14,698 | | | | — | | | | — | |
| Distributions | | | (18,173 | ) | | | (18,017 | ) | | | (18,531 | ) |
| Unit Conversions | | | (1,951 | ) | | | (6,195 | ) | | | (2,750 | ) |
| Net Income | | | 11,649 | | | | 14,027 | | | | 16,335 | |
| | | | | | | | | | | | | |
| Limited Partners Units — End of Year | | $ | 159,832 | | | $ | 153,609 | | | $ | 163,794 | |
| | | | | | | | | | | | | |
| Accum. Other Comprehensive Loss — Beginning of Year | | $ | (3,700 | ) | | $ | (10,110 | ) | | $ | (10,559 | ) |
| Settlement of Interest Rate Protection Agreements | | | — | | | | 6,816 | | | | — | |
| Reclassification of Settlement of Interest Rate Protection Agreements to Net Income | | | (159 | ) | | | — | | | | — | |
| Mark to Market of Interest Rate Protection Agreements | | | (1,414 | ) | | | 106 | | | | 251 | |
| Amortization of Interest Rate Protection Agreements | | | (1,085 | ) | | | (512 | ) | | | 198 | |
| | | | | | | | | | | | | |
| Accum. Other Comprehensive Loss — End of Year | | $ | (6,358 | ) | | $ | (3,700 | ) | | $ | (10,110 | ) |
| | | | | | | | | | | | | |
| Total Partners’ Capital at End of Year | | $ | 1,213,638 | | | $ | 1,009,722 | | | $ | 1,063,067 | |
| | | | | | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-7
FIRST INDUSTRIAL, LP.
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | |
| Net Income | | $ | 99,216 | | | $ | 125,154 | | | $ | 131,056 | |
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | | | | | | | | | | | | |
| Depreciation | | | 86,588 | | | | 71,785 | | | | 63,281 | |
| Amortization of Deferred Financing Costs | | | 2,122 | | | | 1,928 | | | | 1,761 | |
| Other Amortization | | | 31,031 | | | | 20,661 | | | | 16,174 | |
| Provision for Bad Debt | | | 1,689 | | | | (1,474 | ) | | | (160 | ) |
| Mark-to-Market of /Loss on Settlement of Interest Rate Protection Agreements | | | (143 | ) | | | — | | | | — | |
| Equity in Income of Joint Ventures | | | (3,698 | ) | | | (34,990 | ) | | | (539 | ) |
| Distributions from Joint Ventures | | | 3,866 | | | | 34,990 | | | | 539 | |
| Gain on Sale of Real Estate | | | (131,612 | ) | | | (83,160 | ) | | | (80,193 | ) |
| (Gain) Loss on Early Retirement of Debt | | | (82 | ) | | | 515 | | | | — | |
| Equity in Income of Other Real Estate Partnerships | | | (48,212 | ) | | | (29,203 | ) | | | (43,332 | ) |
| Distributions from Investment in Other Real Estate Partnerships | | | 48,212 | | | | 29,203 | | | | 43,332 | |
| Increase in Build to Suit Development for Sale Costs Receivable | | | (16,241 | ) | | | — | | | | — | |
| Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net | | | (13,835 | ) | | | (53,510 | ) | | | (23,076 | ) |
| Increase in Deferred Rent Receivable | | | (7,485 | ) | | | (5,254 | ) | | | (2,629 | ) |
| Increase (Decrease) in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits | | | 31,415 | | | | 4,370 | | | | (14,948 | ) |
| | | | | | | | | | | | | |
| Net Cash Provided by Operating Activities | | | 82,831 | | | | 81,015 | | | | 91,266 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | |
| Purchase of and Additions to Investment in Real Estate | | | (846,033 | ) | | | (469,668 | ) | | | (280,049 | ) |
| Net Proceeds from Sales of Investments in Real Estate | | | 478,937 | | | | 324,919 | | | | 303,171 | |
| Investments in and Advances to Other Real Estate Partnerships | | | (122,606 | ) | | | (68,134 | ) | | | (59,430 | ) |
| Distributions/Repayments from Other Real Estate Partnerships | | | 83,709 | | | | 103,073 | | | | 62,300 | |
| Contributions to and Investments in Joint Ventures | | | (45,175 | ) | | | (5,422 | ) | | | (5,711 | ) |
| Distributions from Joint Ventures | | | 2,971 | | | | 15,535 | | | | 2,859 | |
| Repayment and Sale of Mortgage Loans Receivable | | | 58,375 | | | | 44,418 | | | | 27,500 | |
| (Increase) Decrease in Restricted Cash | | | (14,920 | ) | | | 60,849 | | | | (32,525 | ) |
| | | | | | | | | | | | | |
| Net Cash (Used in) Provided by Investing Activities | | | (404,742 | ) | | | 5,570 | | | | 18,115 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | |
| Unit Contributions | | | 55,754 | | | | 86,121 | | | | 14,799 | |
| Proceeds from the Issuance of Preferred Units | | | 187,500 | | | | 200,000 | | | | — | |
| Preferred Unit Offering Costs | | | (5,906 | ) | | | (5,576 | ) | | | — | |
| Unit Distributions | | | (137,672 | ) | | | (130,220 | ) | | | (125,916 | ) |
| Purchase of General Partner Units | | | — | | | | — | | | | (997 | ) |
| Repurchase of Restricted Units | | | (3,285 | ) | | | (3,751 | ) | | | (1,865 | ) |
| Redemption of Preferred Units | | | — | | | | (321,438 | ) | | | — | |
| Preferred Unit Distributions | | | (8,162 | ) | | | (13,256 | ) | | | (20,176 | ) |
| Repayments of Mortgage Loans Payable | | | (1,951 | ) | | | (5,931 | ) | | | (1,018 | ) |
| Proceeds from Mortgage Loan Payable | | | 1,167 | | | | 1,400 | | | | — | |
| Proceeds from Senior Unsecured Debt | | | — | | | | 134,496 | | | | — | |
| Other Proceeds from Senior Unsecured Debt | | | — | | | | 6,816 | | | | — | |
| Repayment of Senior Unsecured Debt | | | (50,000 | ) | | | — | | | | — | |
| Proceeds from Unsecured Lines of Credit | | | 647,500 | | | | 581,000 | | | | 264,300 | |
| Repayments on Unsecured Lines of Credit | | | (357,500 | ) | | | (609,400 | ) | | | (238,700 | ) |
| Book Overdraft. | | | — | | | | — | | | | 312 | |
| Cost of Debt Issuance and Prepayment Fees | | | (1,792 | ) | | | (3,777 | ) | | | (120 | ) |
| | | | | | | | | | | | | |
| Net Cash Provided by (Used in) Financing Activities | | | 325,653 | | | | (83,516 | ) | | | (109,381 | ) |
| | | | | | | | | | | | | |
| Net Increase in Cash and Cash Equivalents | | | 3,742 | | | | 3,069 | | | | — | |
| Cash and Cash Equivalents, Beginning of Period | | | 3,069 | | | | — | | | | — | |
| | | | | | | | | | | | | |
| Cash and Cash Equivalents, End of Period | | $ | 6,811 | | | $ | 3,069 | | | $ | — | |
| | | | | | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-8
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
| |
| 1. | Organization and Formation of Partnership |
First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% and 86.9% ownership interest at December 31, 2005 and 2004, respectively. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $312,500. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership owned, in the aggregate, approximately a 13.2% and 13.1% interest in the Operating Partnership at December 31, 2005 and 2004, respectively.
The Operating Partnership is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of First Industrial Development Services, Inc. (together with the Operating Partnership and the L.L.C.’s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership. The Other Real Estate Partnerships’ operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership. The Operating Partnership or First Industrial Development Services, Inc. also holds at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P, (the “Mortgage Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD. and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnership’s operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership. The Operating Partnership or First Industrial Development Services, Inc., through separate wholly-owned limited liability companies in which it is also the sole member, also owns minority equity interests in, and provides various services to, four joint ventures which invest in industrial properties (the “September 1998 Joint Venture”, the “May 2003 Joint Venture”, the “March 2005 Joint Venture” and the “September 2005 Joint Venture”). The Operating Partnership, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in, and provides various services to, a fifth joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture and the September 2005 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. The operating data of the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein. The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting.
The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.
As of December 31, 2005, the Consolidated Operating Partnership owned 859 industrial properties (inclusive of developments in progress), containing an aggregate of approximately 72.5 million square feet (unaudited) of gross leasable area (“GLA”). On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 100 industrial properties, containing an aggregate of approximately 9.1 million square feet (unaudited) of GLA.
Profits, losses and distributions of the Operating Partnership, the L.L.C.s and Other Real Estate Partnerships are allocated to the general partner and the limited partners, or the members, as applicable, in
F-9
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
accordance with the provisions contained within the partnership agreements or ownership agreements, as applicable, of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships.
The consolidated financial statements of the Consolidated Operating Partnership at December 31, 2005 and 2004 and for each of the years ended December 31, 2005, 2004 and 2003 include the accounts and operating results of the Operating Partnership, the L.L.C.s and First Industrial Development Services, Inc. on a consolidated basis. Such financial statements present the Operating Partnership’s limited partnership interests in each of the Other Real Estate Partnerships and the Consolidated Operating Partnership’s minority equity interests in the Joint Ventures under the equity method of accounting. All intercompany transactions have been eliminated in consolidation.
| |
| 3. | Summary of Significant Accounting Policies |
In order to conform with generally accepted accounting principles, management, in preparation of the Consolidated Operating Partnership’s financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2005 and 2004, and the reported amounts of revenues and expenses for each of the years ended December 31, 2005, 2004 and 2003. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments.
Restricted Cash
At December 31, 2005 and 2004, restricted cash includes gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Company exchanges into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.
Investment in Real Estate and Depreciation
Investment in Real Estate is carried at cost. The Consolidated Operating Partnership reviews its properties on a quarterly basis for impairment and provides a provision if impairments are found. To determine if an impairment may exist, the Consolidated Operating Partnership reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Consolidated Operating Partnership estimates the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property, on an individual property basis, the Consolidated Operating Partnership will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Consolidated Operating Partnership ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Consolidated Operating Partnership decides not to sell a property previously classified as held for sale, the Consolidated Operating Partnership will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. To calculate the fair value of properties held for sale, the
F-10
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Consolidated Operating Partnership deducts from the contract price of the property the estimated costs to close the sale.
Interest costs, real estate taxes, compensation costs of development personnel and other directly related costs incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, the Consolidated Operating Partnership reclassifies construction in progress to building, tenant improvement and leasing commissions. Such costs begin to be capitalized to the development projects from the point the Consolidated Operating Partnership is undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:
| | | |
| | | Years |
| |
| Buildings and Improvements | | 20 to 50 |
| Land Improvements | | 15 |
| Furniture, Fixtures and Equipment | | 5 to 10 |
Construction expenditures for tenant improvements, leasehold improvements and leasing commissions (inclusive of compensation costs of personnel attributable to leasing) are capitalized and amortized over the terms of each specific lease. Capitalized compensation costs of personnel attributable to leasing relate to time directly attributable to originating leases with independent third parties that result directly from and are essential to originating those leases and would not have been incurred had these leasing transactions not occurred. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized.
The Consolidated Operating Partnership accounts for all acquisitions entered into subsequent to June 30, 2001 in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standard No. 141, “Business Combinations” (“FAS 141”). Upon acquisition of a property, the Consolidated Operating Partnership allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases and above market and below market leases. The Consolidated Operating Partnership allocates the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term.
The purchase price is further allocated to in-place lease values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Consolidated Operating Partnership’s overall relationship with the respective tenant. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on the Consolidated Operating Partnership’s consolidated statements of operations. The value of in-place lease intangibles, which is included as a component of Deferred Leasing Intangibles, Net, is amortized over the remaining lease term and expected renewal periods of the respective lease as an adjustment to depreciation and other amortization expense. If a tenant terminates its lease early, the unamortized portion of leasing commissions, tenant improvements, above and below market leases and the in-place lease value is immediately written off.
F-11
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Deferred Leasing Intangibles included in the Consolidated Operating Partnership’s total assets consist of the following:
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| |
| In-Place Leases | | $ | 71,818 | | | $ | 37,047 | |
| Less: Accumulated Amortization | | | (5,829 | ) | | | (2,315 | ) |
| | | | | | | | | |
| | | $ | 65,989 | | | $ | 34,732 | |
| | | | | | | | | |
| Above Market Leases | | $ | 6,524 | | | $ | 4,348 | |
| Less: Accumulated Amortization | | | (1,634 | ) | | | (880 | ) |
| | | | | | | | | |
| | | $ | 4,890 | | | $ | 3,468 | |
| | | | | | | | | |
Deferred Leasing Intangibles included in the Consolidated Operating Partnership’s total liabilities consist of the following:
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| |
| Below Market Leases | | $ | 25,058 | | | $ | 10,222 | |
| Less: Accumulated Amortization | | | (2,889 | ) | | | (1,771 | ) |
| | | | | | | | | |
| | | $ | 22,169 | | | $ | 8,451 | |
| | | | | | | | | |
Amortization expense related to deferred leasing intangibles, was $6,624 and $1,620 for the years ended December 31, 2005 and 2004, respectively. The Consolidated Operating Partnership will recognize net amortization expense related to the deferred leasing intangibles over the next five years as follows:
| | | | | |
| 2006 | | $ | 5,208 | |
| 2007 | | | 5,385 | |
| 2008 | | | 5,544 | |
| 2009 | | | 5,703 | |
| 2010 | | | 5,493 | |
| | | | | |
| Total | | $ | 27,333 | |
| | | | | |
Build to Suit for Sale Revenues and Expenses
During 2005, First Industrial Development Services, Inc. entered into a contract with a third party to construct an industrial property. Thisbuild-to-suit for sale contract requires the purchase price to be paid at closing. The Consolidated Operating Partnership uses thepercentage-of-completion contract method of accounting in accordance withSOP 81-1 “Accounting for Performance of Construction-Type and Certain Production-Type Contracts”. During the period of performance, costs are accumulated on the balance sheet in Prepaid Expenses and Other Assets ($15,574 at December 31, 2005) and revenues and expenses are recognized in continuing operations.
Deferred Financing Costs
Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs was $12,517 and $10,853 at December 31, 2005 and 2004, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.
F-12
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Investment in and Advances to Other Real Estate Partnerships
Investment in and Advances to Other Real Estate Partnerships represents the Consolidated Operating Partnership’s limited partnership interests in and advances to, through the Operating Partnership, the Other Real Estate Partnerships. The Operating Partnership accounts for its Investment in and Advances to Other Real Estate Partnerships under the equity method of accounting. Under the equity method of accounting, the Operating Partnership’s share of earnings or losses of the Other Real Estate Partnerships is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Operating Partnership’s Investment in and Advances to Other Real Estate Partnerships as paid or received, respectively.
Investments in Joint Ventures
Investments in Joint Ventures represent the Operating Partnership’s limited partnership interests in the Joint Ventures. The Operating Partnership accounts for its investments in Joint Ventures under the equity method of accounting, as the Operating Partnership does not have operational control or a majority voting interest. Under the equity method of accounting, the Operating Partnership’s share of earnings or losses of the Joint Ventures is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Operating Partnership’s Investments in Joint Ventures as paid or received, respectively. Differences between the Operating Partnership’s carrying value of its investments in joint ventures and the Operating Partnership’s underlying equity of such joint ventures are amortized over the respective lives of the underlying assets, as applicable.
Stock Based Compensation
At December 31, 2005, the Company has three stock incentive employee compensation plans, which are described more fully in Note 14. Prior to January 1, 2003, the Consolidated Operating Partnership accounted for its stock incentive plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Under APB 25, compensation expense is not recognized for options issued in which the strike price is equal to the fair value of the Company’s stock on the date of grant. Certain options issued in 2000 were issued with a strike price less than the fair value of the Company’s stock on the date of grant. Compensation expense is being recognized for the intrinsic value of these options determined at the date of grant over the vesting period. On January 1, 2003, the Consolidated Operating Partnership adopted the fair value recognition provisions of the Financial Accounting Standards Board’s (“FASB”) Financial Accounting Standards No. 123, “Accounting for Stock Based Compensation” (“FAS 123”), as amended by Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure”. Beginning on January 1, 2003, the Consolidated Operating Partnership has applied the fair value recognition provisions of FAS 123 prospectively to all employee option awards granted after December 31, 2002. The Consolidated Operating Partnership has not awarded options to employees or directors of the Company during the years ended December 31, 2005, 2004 and 2003, and therefore no stock-based employee compensation expense, except for expense related to restricted stock, is included in net income available to common unitholders related to the fair value recognition provisions of FAS 123.
Had compensation expense for the Company’s Stock Incentive Plans been determined based upon the fair value at the grant date for awards under the stock incentive plans consistent with the methodology prescribed under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation”, as
F-13
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
amended by FAS 148, net income and earnings per unit would have been the pro forma amounts indicated in the table below:
| | | | | | | | | | | | | |
| | | For the Year Ended | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Net Income Available to Unitholders — as reported | | $ | 88,528 | | | $ | 102,707 | | | $ | 110,880 | |
| Add: Stock-Based Employee Compensation Expense Included in Net Income Available to Unitholders — as reported | | | — | | | | — | | | | 54 | |
| Less: Total Stock-Based Employee Compensation Expense - Determined Under the Fair Value Method | | | (100 | ) | | | (420 | ) | | | (1,350 | ) |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders — pro forma | | $ | 88,428 | | | $ | 102,287 | | | $ | 109,584 | |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders per Unit — as reported — Basic | | $ | 1.81 | | | $ | 2.18 | | | $ | 2.45 | |
| Net Income Available to Unitholders per Unit — pro forma — Basic | | $ | 1.81 | | | $ | 2.17 | | | $ | 2.42 | |
| Net Income Available to Unitholders per Unit — as reported — Diluted | | $ | 1.80 | | | $ | 2.16 | | | $ | 2.44 | |
| Net Income Available to Unitholders per Unit — pro forma — Diluted | | $ | 1.80 | | | $ | 2.15 | | | $ | 2.41 | |
| The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: | | | | | | | | | | | | |
| Expected dividend yield | | | N/A | | | | N/A | | | | N/A | |
| Expected stock price volatility | | | N/A | | | | N/A | | | | N/A | |
| Risk-free interest rate | | | N/A | | | | N/A | | | | N/A | |
| Expected life of options | | | N/A | | | | N/A | | | | N/A | |
| No options were granted during 2005, 2004 and 2003. | | | | | | | | | | | | |
Revenue Recognition
Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenue in the same period the related expenses are incurred by the Consolidated Operating Partnership.
Revenue is recognized on payments received from tenants for early lease terminations after the Consolidated Operating Partnership determines that all the necessary criteria have been met in accordance with FASB Statement of Financial Accounting Standards No. 13 “Accounting for Leases” (“FAS 13”).
Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.
The Consolidated Operating Partnership provides an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the consolidated balance sheets are shown net of an allowance for doubtful accounts of $111 and $73 as of December 31, 2005 and 2004, respectively. For accounts receivable the Consolidated Operating Partnership deems uncollectible, the Consolidated Operating Partnership uses the direct write-off method.
F-14
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Gain on Sale of Real Estate
Gain on sale of real estate is recognized using the full accrual method, when appropriate. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Consolidated Operating Partnership after completion of each sale are included in the determination of the gain on sales.
Income Taxes
In accordance with partnership taxation, each of the partners are responsible for reporting their share of taxable income or loss. Accordingly, no provision has been made for state or federal income taxes in the accompanying consolidated financial statements except for activities conducted in its taxable REIT subsidiary, First Industrial Development Services, Inc. which has been accounted for under FASB Statement of Financial Standards No. 109, “Accounting for Income Taxes” (“FAS 109”). In accordance with the FAS 109, the total benefit/expense has been separately allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
The Consolidated Operating Partnership is subject to certain state and local income, excise and franchise taxes. The provision for local, excise and franchise taxes has been reflected in general and administrative expense in the consolidated statements of operations and has not been separately stated due to its insignificance. State income taxes are included in the provision/benefit for income taxes which is allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
Earnings Per Unit (“EPU”)
Net income per weighted average general partnership and limited partnership unit (the “Units”) — basic is based on the weighted average Units outstanding (excluding restricted units that have not yet vested). Net income per weighted average Unit — diluted is based on the weighted average Units outstanding (excluding restricted units that have not yet vested) plus the dilutive effect of the Company’sin-the-money employee stock options and restricted stock that result in the issuance of general partnership units. See Note 11 for further disclosure about earnings per unit.
Fair Value of Financial Instruments
The Consolidated Operating Partnership’s financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses, mortgage loans payable, unsecured lines of credit and senior unsecured debt.
The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses approximates their carrying or contract values. See Note 6 for the fair values of the mortgage loans payable, unsecured lines of credit and senior unsecured debt.
Derivative Financial Instruments
Historically, the Consolidated Operating Partnership, through the Operating Partnership, has used interest rate protection agreements (the “Agreements”) to fix the interest rate on anticipated offerings of senior unsecured debt or convert floating rate debt to fixed rate debt. Receipts or payments that result from the settlement of Agreements used to fix the interest rate on anticipated offerings of senior unsecured debt are amortized over the life of the senior unsecured debt and included in interest expense. Receipts or payments resulting from Agreements used to convert floating rate debt to fixed rate debt are recognized as a component
F-15
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
of interest expense. Agreements which qualify for hedge accounting aremarked-to-market and any gain or loss is recognized in other comprehensive income (partners’ capital). Any agreements which no longer qualify for hedge accounting aremarked-to-market and any gain or loss is recognized in net income immediately. The credit risks associated with the Agreements are controlled through the evaluation and monitoring of the creditworthiness of the counterparty. In the event that the counterparty fails to meet the terms of the Agreements, the Consolidated Operating Partnership’s exposure is limited to the current value of the interest rate differential, not the notional amount, and the Consolidated Operating Partnership’s carrying value of the Agreements on the balance sheet. See Note 6 for more information on the Agreements.
Discontinued Operations
On January 1, 2002, the Consolidated Operating Partnership adopted the FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Consolidated Operating Partnership as a result of the disposal transaction and (b) the Consolidated Operating Partnership will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be reclassified and presented in discontinued operations in prior consolidated statements of operations.
Segment Reporting
Management views the Consolidated Operating Partnership as a single segment.
Recent Accounting Pronouncements
In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FAS 153 did not have a material effect on the Operating Partnership’s consolidated financial statements.
In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”. SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is required to be measured based on the fair value of the equity of liability instruments issued. SFAS 123(R) also contains additional minimum disclosure requirements that including, but not limited to, the valuation method and assumptions used, amounts of compensation capitalized and modifications made. The effective date of SFAS 123(R) was subsequently amended by the SEC to be as of the beginning of the first interim or annual reporting period of the first fiscal year that begins on or after June 15, 2005, and allows several different methods of transition. The Consolidated Operating Partnership expects to adopt the pronouncement as required on January 1, 2006 using the prospective method and does not believe that the adoption of SFAS 123(R) will have a material impact on its financial position, results of operations or cash flows.
In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143. A conditional asset retirement obligation refers to a legal obligation to retire assets where the timingand/or method of settlement are
F-16
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
conditioned on future events. FIN No. 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The Consolidated Operating Partnership adopted the provisions of FIN 47 in 2005. The adoption of this Interpretation did not have a material impact on the Operating Partnership’s consolidated financial position, results of operations or cash flows.
In May, 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements”. FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
In June, 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regardingEITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined inEITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, “Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Company will adoptEITF 04-05 as of January 1, 2006. The Operating Partnership’s adoption of the EITF will have no impact on the Operating Partnership’s results of operations, financial position or liquidity.
In June 2005, the FASB ratified the consensus reached by the EITF regarding EITFNo. 05-6, “Determining the Amortization Period for Leasehold Improvements.” The guidance requires that leasehold improvements acquired in a business combination, or purchased subsequent to the inception of a lease, be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination of purchase. The guidance is effective for periods beginning after June 29, 2005.EITF 05-6 does not impact the Consolidated Operating Partnership’s results of operations, financial position, or liquidity.
Reclassification
Certain 2004 and 2003 items have been reclassified to conform to the 2005 presentation.
| |
| 4. | Investments in and Advances to Other Real Estate Partnerships |
The investments in and advances to Other Real Estate Partnerships reflects the Operating Partnership’s limited partnership equity interests in the entities referred to in Note 1 to these financial statements.
F-17
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Summarized condensed financial information as derived from the financial statements of the Other Real Estate Partnerships is presented below:
Condensed Combined Balance Sheets:
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| |
ASSETS |
| Assets: | | | | | | | | |
| Investment in Real Estate, Net | | $ | 309,013 | | | $ | 312,679 | �� |
| Other Assets, Net | | | 87,866 | | | | 39,829 | |
| | | | | | | | | |
| Total Assets | | | 396,879 | | | | 352,508 | |
| | | | | | | | | |
| |
LIABILITIES AND PARTNERS’ CAPITAL |
| Liabilities: | | | | | | | | |
| Mortgage Loans Payable | | $ | 2,380 | | | $ | 2,456 | |
| Other Liabilities | | | 12,492 | | | | 7,136 | |
| | | | | | | | | |
| Total Liabilities | | | 14,872 | | | | 9,592 | |
| Partners’ Capital | | | 382,007 | | | | 342,916 | |
| | | | | | | | | |
| Total Liabilities and Partners’ Capital | | $ | 396,879 | | | $ | 352,508 | |
| | | | | | | | | |
Condensed Combined Statements of Operations:
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Total Revenues (including Interest Income) | | $ | 44,093 | | | $ | 39,537 | | | $ | 42,068 | |
| Property Expenses | | | (13,387 | ) | | | (12,317 | ) | | | (12,166 | ) |
| Interest Expense | | | (175 | ) | | | (178 | ) | | | (256 | ) |
| Amortization of Deferred Financing Costs | | | (4 | ) | | | (3 | ) | | | (3 | ) |
| Depreciation and Other Amortization | | | (13,894 | ) | | | (10,533 | ) | | | (9,662 | ) |
| Loss on Early Retirement of Debt | | | — | | | | — | | | | (1,466 | ) |
| Equity in Income of Joint Ventures | | | — | | | | 1,461 | | | | — | |
| | | | | | | | | | | | | |
| Income from Continuing Operations | | | 16,663 | | | | 17,967 | | | | 18,515 | |
| Income from Discontinued Operations (Including Gain on Sale of Real Estate of $29,213, $6,439 and $4,689 for the years ended December 31, 2005, 2004 and 2003 | | | 31,004 | | | | 9,853 | | | | 18,932 | |
| Gain on Sale of Real Estate | | | 863 | | | | 1,643 | | | | 6,198 | |
| | | | | | | | | | | | | |
| Net Income | | $ | 48,500 | | | $ | 29,463 | | | $ | 43,645 | |
| | | | | | | | | | | | | |
| |
| 5. | Investments in Joint Ventures |
On September 28, 1998, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is its sole member, entered into a joint venture arrangement (the “September 1998 Joint Venture”) with an institutional investor to invest in industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies in which the Operating Partnership is the sole member, owns a ten percent equity interest in the September 1998 Joint Venture and
F-18
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
provides property and asset management services to the September 1998 Joint Venture. On or after October 2000, under certain circumstances, the Consolidated Operating Partnership has the right to purchase all of the properties owned by the September 1998 Joint Venture at a price to be determined in the future. The Consolidated Operating Partnership has not exercised this right.
On December 28, 2001, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “December 2001 Joint Venture”) with an institutional investor to invest in industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership, owned a 15% equity interest in the December 2001 Joint Venture and provided property management services to the December 2001 Joint Venture. On August 27, 2004, the December 2001 Joint Venture sold its investment of 36 industrial properties, containing approximately 6.2 million square feet (unaudited) of GLA, to a third party for gross proceeds of approximately $349,750. Due to certain provisions in the operating agreement, the Consolidated Operating Partnership received distributions in excess of it’s 15% equity interest in the December 2001 Joint Venture. Due to the sale of all industrial properties, the Consolidated Operating Partnership recognized, in aggregate, approximately $34,767 from the Consolidated Operating Partnership’s 15% share of gain from the sale of the December 2001 Joint Venture’s properties and distributions received from the December 2001 Joint Venture in excess of the Consolidated Operating Partnership’s 15% equity interest. This amount is included in Equity in Income of Joint Ventures.
As a result of the sale on August 27, 2004 to a third party, the Consolidated Operating Partnership recognized the unamortized portion of the previously deferred gain from the original sales to the December 2001 Joint Venture, of approximately $4,375. These deferred gains are included in Equity in Income of Joint Ventures.
On May 16, 2003, the Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “May 2003 Joint Venture”) with an institutional investor to invest in industrial properties. The Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership, owns a 15% equity interest in the May 2003 Joint Venture and provides property management services to the May 2003 Joint Venture.
On March 18, 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into a joint venture arrangement (the “March 2005 Joint Venture”) with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Development Services, Inc., owns a 10% equity interest in the March 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the March 2005 Joint Venture.
On September 7, 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into a joint venture arrangement (the “September 2005 Joint Venture”) with an institutional investor to invest in, own and operate certain industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Development Services, Inc., owns a 10% equity interest in the September 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the September 2005 Joint Venture.
As of December 31, 2005, the September 1998 Joint Venture owned 41 industrial properties comprising approximately 1.3 million square feet (unaudited) of GLA, the May 2003 Joint Venture owned 11 industrial properties comprising approximately 4.7 million square feet (unaudited) of GLA, the March 2005 Joint Venture owned 47 industrial properties comprising approximately 4.2 million square feet (unaudited) of GLA
F-19
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
and several land parcels and the September 2005 Joint Venture owned 217 industrial properties comprising approximately 14.0 million square feet (unaudited) of GLA and several land parcels.
During the year ended December 31, 2005, the Consolidated Operating Partnership sold seven properties and several land parcels to the March 2005 Joint Venture comprising approximately 1.5 million square feet (unaudited) of GLA for a sales price of $89.0 million. The Consolidated Operating Partnership deferred 10% of the gain from the sale, which is equal to the Consolidated Operating Partnership’s economic interest in the March 2005 Joint Venture. In December 2005, the March 2005 Joint Venture sold a portion of a parcel of land to a third party. As a result of the sale, the Consolidated Operating Partnership recognized the unamortized portion of the previously deferred gain, net of tax, from the original sale to the March 2005 Joint Venture in Equity in Income of Joint Ventures. If the Consolidated Operating Partnership repurchases any of the seven properties or land parcels, the 10% deferral will be netted against the basis of the property purchased (which reduces the basis of the property).
During the year ended December 31, 2005, the Consolidated Operating Partnership earned acquisition fees from the May 2003 Joint Venture and the September 2005 Joint Venture. The Consolidated Operating Partnership deferred 15% of the acquisition fees earned from the May 2003 Joint Venture activity and 10% of the acquisition earned fees from the September 2005 Joint Venture activity. The deferrals reduced the Consolidated Operating Partnership’s investment in the joint ventures and are amortized into income over the life of the properties, generally 25 to 40 years.
At December 31, 2005 and 2004, the Consolidated Operating Partnership has a receivable from the Joint Ventures of $3,354 and $1,261, respectively, which mainly relate to development, property management and asset management fees due to the Consolidated Operating Partnership from the Joint Ventures and from borrowings made to the September 1998 Joint Venture.
During the years ended December 31, 2005, 2004 and 2003, the Consolidated Operating Partnership invested the following amounts in its Joint Ventures as well as received distributions and recognized fees from acquisition, disposition, property management, leasing, development and asset management services in the following amounts:
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Contributions | | $ | 43,311 | | | $ | 3,676 | | | $ | 5,558 | |
| Distributions | | $ | 6,837 | | | $ | 50,525 | | | $ | 3,398 | |
| Fees | | $ | 8,301 | | | $ | 2,689 | | | $ | 2,173 | |
F-20
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The combined summarized financial information of the investments in joint ventures is as follows
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| |
Condensed Combined Balance Sheets | | | | | | | | |
| Gross Real Estate Investment | | $ | 1,410,389 | | | $ | 120,633 | |
| Less: Accumulated Depreciation | | | (30,497 | ) | | | (9,308 | ) |
| | | | | | | | | |
| Net Real Estate | | | 1,379,892 | | | | 111,325 | |
| Other Assets | | | 256,233 | | | | 16,637 | |
| | | | | | | | | |
| Total Assets | | $ | 1,636,125 | | | $ | 127,962 | |
| | | | | | | | | |
| Debt | | $ | 1,174,296 | | | $ | 88,398 | |
| Other Liabilities | | | 46,962 | | | | 5,711 | |
| Equity | | | 414,867 | | | | 33,853 | |
| | | | | | | | | |
| Total Liabilities and Equity | | $ | 1,636,125 | | | $ | 127,962 | |
| | | | | | | | | |
| Consolidated Operating Partnership’s share of Equity | | $ | 44,772 | | | $ | 4,580 | |
| Basis Differentials(1) | | | (442 | ) | | | 909 | |
| | | | | | | | | |
| Carrying Value of the Consolidated Operating Partnership’s investments in joint ventures | | $ | 44,330 | | | $ | 5,489 | |
| | | | | | | | | |
| | |
| (1) | | This amount represents the aggregate difference between the Consolidated Operating Partnership’s historical cost basis and the basis reflected at the joint venture level. Basis differentials are primarily comprised of gain deferrals related to properties the Consolidated Operating Partnership sold to the Joint Ventures and certain acquisition costs which are not reflected at the joint venture level. |
| | | | | | | | | | | | | |
| | | Year Ended December 31, | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
Condensed Combined Statements of Operations | | | | | | | | | | | | |
| Total Revenues | | $ | 59,411 | | | $ | 32,353 | | | $ | 35,603 | |
| Expenses | | | | | | | | | | | | |
| Operating and Other | | | 16,128 | | | | 11,593 | | | | 9,725 | |
| Interest | | | 20,995 | | | | 7,712 | | | | 7,353 | |
| Depreciation and Amortization | | | 32,150 | | | | 12,540 | | | | 17,585 | |
| | | | | | | | | | | | | |
| Total Expenses | | | 69,273 | | | | 31,845 | | | | 34,663 | |
| | | | | | | | | | | | | |
| Gain (Loss) on Sale of Real Estate | | | 10,761 | | | | 81,431 | | | | (2,069 | ) |
| | | | | | | | | | | | | |
| Net Income (Loss) | | | 899 | | | | 81,939 | | | | (1,129 | ) |
| | | | | | | | | | | | | |
| Consolidated Operating Partnership’s share of Net Income | | $ | 3,698 | | | $ | 35,840 | | | $ | 539 | |
| | | | | | | | | | | | | |
6. Mortgage Loans Payable, Net, Senior Unsecured Debt, Net and Unsecured Lines of Credit
Mortgage Loans Payable, Net
On March 20, 1996, the Consolidated Operating Partnership, through the Operating Partnership, assumed a $6,424 mortgage loan (the “Assumed Loan I”) and a $2,993 mortgage loan (the “Assumed Loan II”) (together, the “Assumed Loans”) that are collateralized by 12 properties in Indianapolis, Indiana and one
F-21
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
property in Indianapolis, Indiana, respectively. The Assumed Loans bear interest at a fixed rate of 9.25% and provide for monthly principal and interest payments based on a16.75-year amortization schedule. The Assumed Loan I matures on September 1, 2009. The Assumed Loan II matures on January 1, 2013. The Assumed Loans may be prepaid only after December 1999 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium.
On April 16, 1998, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $2,525 (the “Acquisition Mortgage Loan IV”). The Acquisition Mortgage Loan IV is collateralized by one property in Baltimore, Maryland, bears interest at a fixed rate of 8.95% and provides for monthly principal and interest payments based on a20-year amortization schedule. The Acquisition Mortgage Loan IV matures on October 1, 2006. The Acquisition Mortgage Loan IV may be prepaid only after October 2001 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium.
On April 1, 2002, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $5,814 (the “Acquisition Mortgage Loan VIII”). The Acquisition Mortgage Loan VIII is collateralized by one property in Rancho Dominguez, California, bears interest at a fixed rate of 8.26% and provides for monthly principal and interest payments based on a22-year amortization schedule. The Acquisition Mortgage Loan VIII matures on December 1, 2019. The Acquisition Mortgage Loan VIII may be prepaid only after November 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
On April 1, 2002, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $6,030 (the “Acquisition Mortgage Loan IX”). The Acquisition Mortgage Loan IX is collateralized by one property in Bloomington, Minnesota, bears interest at a fixed rate of 8.26% and provides for monthly principal and interest payments based on a22-year amortization schedule. The Acquisition Mortgage Loan IX matures on December 1, 2019. The Acquisition Mortgage Loan IX may be prepaid only after November 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
On May 1, 2003, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $14,157 (the “Acquisition Mortgage Loan X”). The Acquisition Mortgage Loan X is collateralized by one property in Hagerstown, Maryland, bears interest at a fixed rate of 8.25% and provides for monthly principal and interest payments based on a30-year amortization schedule. The Acquisition Mortgage Loan X matures on December 1, 2010. In conjunction with the assumption of the Acquisition Mortgage Loan X, the Consolidated Operating Partnership recorded a premium in the amount of $2,927 which will be amortized over the remaining life of the Acquisition Mortgage Loan X as an adjustment to interest expense. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan X is 5.00%. The Acquisition Mortgage Loan X may be prepaid only after November 2004 in exchange for the greater of a 3% prepayment fee or yield maintenance premium.
On September 12, 2003, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $4,269 (the “Acquisition Mortgage Loan XI”). The Acquisition Mortgage Loan XI was collateralized by one property in Downers Grove, Illinois, bore interest at a fixed rate of 7.61% and provided for monthly principal and interest payments based on a30-year amortization schedule. In conjunction with the assumption of the Acquisition Mortgage Loan XI, the Consolidated Operating Partnership recorded a premium in the amount of $621 which was being amortized over the remaining life of the Acquisition Mortgage Loan XI as an adjustment to interest expense. The Acquisition Mortgage Loan XI may be prepaid only after June 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium. On December 3, 2004, the Consolidated Operating Partnership paid off and retired the Acquisition Mortgage Loan XI. As this pay off and retirement was prior to the stated maturity date of the Acquisition
F-22
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Mortgage Loan XI, the Consolidated Operating Partnership wrote off unamortized deferred financing costs, a loan premium and paid a prepayment penalty in the aggregate amount of approximately $515.
On September 12, 2003, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $2,325 (the “Acquisition Mortgage Loan XII”). The Acquisition Mortgage Loan XII is collateralized by one property in Indianapolis, Indiana, bears interest at a fixed rate of 7.54% and provides for monthly principal and interest payments based on a 30 — year amortization schedule. The Acquisition Mortgage Loan XII matures on January 1, 2012. In conjunction with the assumption of the Acquisition Mortgage Loan XII, the Consolidated Operating Partnership recorded a premium in the amount of $317 which will be amortized over the remaining life of the Acquisition Mortgage Loan XII as an adjustment to interest expense. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XII is 5.51%. The Acquisition Mortgage Loan XII may be prepaid only after February 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
On September 30, 2004, the Consolidated Operating Partnership assumed a mortgage loan in the amount of $12,057 and borrowed an additional $1,400 (collectively referred to as the “Acquisition Mortgage Loan XIII”). The Acquisition Mortgage Loan XIII is collateralized by three properties in Phoenix, Arizona, bears interest at a fixed rate of 5.60% and provides for monthly principal and interest payments based on a30-year amortization schedule. The Acquisition Mortgage Loan XIII matures on November 10, 2012. In conjunction with the assumption of the Acquisition Mortgage Loan XIII, the Consolidated Operating Partnership recorded a premium in the amount of $467 which will be amortized over the remaining life of the Acquisition Mortgage Loan XIII as an adjustment to interest expense. On July 13, 2005, the Consolidated Operating Partnership sold the properties that collateralized the Acquisition Mortgage Loan XIII. In conjunction with the sale, the buyer assumed the Acquisition Mortgage Loan XIII and the Consolidated Operating Partnership paid $291 in fees related to the assignment of the Acquisition Mortgage Loan XIII. Consequently, the Consolidated Operating Partnership wrote-off the remaining premium on the note of $424. Both the $291 of fees and $424 premium write-off are included in the Gain on Early Retirement of Debt on the Consolidated Operating Partnership Statement of Operations.
On December 21, 2004, the Consolidated Operating Partnership assumed a mortgage loan in the amount of $6,187 (the “Acquisition Mortgage Loan XIV”). The Acquisition Mortgage Loan XIV is collateralized by six properties in Tampa, Florida, bears interest at a fixed rate of 6.94% and provides for monthly principal and interest payments based on a20-year amortization schedule. The Acquisition Mortgage Loan XIV matures on July 1, 2009. In conjunction with the assumption of the Acquisition Mortgage Loan XIV, the Consolidated Operating Partnership recorded a premium in the amount of $553 which will be amortized over the remaining life of the Acquisition Mortgage Loan XIV as an adjustment to interest expense. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XIV is 4.58%. The Acquisition Mortgage Loan XIV may be prepaid in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
On January 12, 2005, in conjunction with the acquisition of a parcel of land, the seller provided the Operating Partnership a mortgage loan in the amount of $1,167 (the “Acquisition Mortgage Loan XV”). The Acquisition Mortgage Loan XV is collateralized by a land parcel in Lebanon, TN, does not require principal payments prior to maturity on January 12, 2006 and has a 0% interest rate. Since the Acquisition Mortgage XV is non-interest bearing, a discount should be applied with an offsetting amount allocated to the basis of the land. The Consolidated Operating Partnership has concluded that the discount is not material and has not accounted for the discount or the land basis adjustment. The Acquisition Mortgage Loan XV was paid off and retired January 12, 2006 (See Note 17).
On March 31, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $1,977 (the “Acquisition Mortgage Loan XVI”). The Acquisition Mortgage
F-23
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Loan XVI is collateralized by one property in New Hope, MN, bears interest at a fixed rate of 5.50% and provides for monthly principal and interest payments based on a20-year amortization schedule. The Acquisition Mortgage Loan XVI matures on September 30, 2024. In conjunction with the assumption of the Acquisition Mortgage Loan XVI, the Consolidated Operating Partnership recorded a premium in the amount of $32 which will be amortized as an adjustment to interest expense through March 31, 2009. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVI is 5.30%. The Acquisition Mortgage Loan XVI may be prepaid on April 1, 2009 without incurring a prepayment fee.
On June 27, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $3,056 (the “Acquisition Mortgage Loan XVII”). The Acquisition Mortgage Loan XVII is collateralized by one property in Villa Rica, GA, bears interest at a fixed rate of 7.38% and provides for monthly principal and interest payments based on a15-year amortization schedule. The Acquisition Mortgage Loan XVII matures on May 1, 2016. In conjunction with the assumption of the Acquisition Mortgage Loan XVII, the Consolidated Operating Partnership recorded a premium in the amount of $258 which will be amortized as an adjustment to interest expense through May 1, 2016. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVII is 5.70%. The Acquisition Mortgage Loan XVII may not be prepaid until maturity without incurring a prepayment fee.
On June 30, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $6,513 (the “Acquisition Mortgage Loan XVIII”). The Acquisition Mortgage Loan XVIII is collateralized by one property in Hammonton, NJ, bears interest at a fixed rate of 7.58% and provides for monthly principal and interest payments based on a20-year amortization schedule. The Acquisition Mortgage Loan XVIII matures on March 1, 2011. In conjunction with the assumption of the Acquisition Mortgage Loan XVIII, the Consolidated Operating Partnership recorded a premium in the amount of $749 which will be amortized as an adjustment to interest expense through November 30, 2010. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVIII is 4.93%. The Acquisition Mortgage Loan XVIII may be prepaid on December 1, 2010 without incurring a prepayment fee.
Senior Unsecured Debt, Net
On May 13, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $150,000 of senior unsecured debt which matures on May 15, 2007 and bears a coupon interest rate of 7.60% (the “2007 Notes”). The issue price of the 2007 Notes was 99.965%. Interest is paid semi-annually in arrears on May 15 and November 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2007 Notes prior to issuance. The Consolidated Operating Partnership, through, the Operating Partnership, settled the interest rate protection agreement for a payment of approximately $41, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2007 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2007 Notes is 7.61%.
On May 13, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matures on May 15, 2027, and bears a coupon interest rate of 7.15% (the “2027 Notes”). The issue price of the 2027 Notes was 99.854%. The 2027 Notes were redeemable, at the option of the holders thereof, on May 15, 2002. The Operating Partnership received redemption notices from holders representing $84,930 of the 2027 Notes outstanding. On May 15, 2002, the Consolidated Operating Partnership, through the Operating Partnership, paid off and retired $84,930 of the 2027 Notes. Interest is paid
F-24
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
semi-annually in arrears on May 15 and November 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2027 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreement for approximately $597 of proceeds, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2027 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2027 Notes is 7.11%.
On May 22, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matured on May 15, 2011 and bore a coupon interest rate of 7.375% (the “2011 PATS”). The issue price of the 2011 PATS was 99.348%. The Consolidated Operating Partnership received approximately $1,781 from the holder of the 2011 PATS as consideration for the put option. The Consolidated Operating Partnership amortized the put option proceeds over the life of the put option as an adjustment to interest expense. The Consolidated Operating Partnership also entered into an interest rate protection agreement which was used to fix the interest rate on the 2011 PATS. The Consolidated Operating Partnership amortized the settlement amount of the interest rate protection agreement over the life of the 2011 PATS. Including the impact of the offering discount, the proceeds from the put option and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2011 PATS was 7.26%. On May 17, 2004, the Consolidated Operating Partnership exchanged the 2014 Notes (hereinafter defined) for the 2011 PATS and net cash in the amount of $8,877. The Consolidated Operating Partnership retired the 2011 PATS.
On November 20, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $50,000 of senior unsecured debt which matured on November 21, 2005 and bore a coupon interest rate of 6.90%, which is the effective interest rate (the “2005 Notes”). The issue price of the 2005 Notes was 100%. Interest was paid semi-annually in arrears on May 21 and November 21. The 2005 Notes contained certain covenants including limitation on incurrence of debt and debt service coverage. On November 21, 2005 the Consolidated Operating Partnership paid off and retired the 2005 Notes.
On December 8, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $150,000 of senior unsecured debt which matures on December 1, 2006 and bears a coupon interest rate of 7.00% (the “2006 Notes”). The issue price of the 2006 Notes was 100%. Interest is paid semi-annually in arrears on June 1 and December 1. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2006 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreement for a payment of approximately $2,162, which is included in other comprehensive income. The settlement amount of the interest rate protection agreement is being amortized over the life of the 2006 Notes as an adjustment to interest expense. Including the impact of the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2006 Notes is 7.22%.
On December 8, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matures on December 1, 2017 and bears a coupon interest rate of 7.50% (the “2017 Notes”). The issue price of the 2017 Notes was 99.808%. Interest is paid semi-annually in arrears on June 1 and December 1. The Consolidated Operating Partnership is amortizing the debt issue discount over the life of the 2017 Notes as an adjustment to interest expense. Including the impact of the offering discount, the Consolidated Operating Partnership’s effective interest rate on the 2017 Notes is 7.52%.
On July 14, 1998, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on July 15, 2028 and bears a coupon interest rate of 7.60% (the “2028 Notes”). The issue price of the 2028 Notes was 99.882%. Interest is paid semi-annually in arrears on January 15 and July 15. The Consolidated Operating Partnership, through the Operating Partnership, also
F-25
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
entered into interest rate protection agreements which were used to fix the interest rate on the 2028 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreements for a payment of approximately $11,504, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2028 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2028 Notes is 8.13%. Approximately $50,000 of the 2028 Notes was purchased, through a broker/dealer, by an entity in which a Director of the Company owns less than a two percent interest.
On March 19, 2001, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on March 15, 2011 and bears a coupon interest rate of 7.375% (the “2011 Notes”). The issue price of the 2011 Notes was 99.695%. Interest is paid semi-annually in arrears on September 15 and March 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2011 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreement for approximately $371 of proceeds which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2011 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2011 Notes is 7.39%.
On April 15, 2002, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on April 15, 2012 and bears a coupon interest rate of 6.875% (the “2012 Notes”). The issue price of the 2012 Notes was 99.310%. Interest is paid semi-annually in arrears on April 15 and October 15. The Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2012 Notes prior to issuance. The Operating Partnership settled the interest rate protection agreements for approximately $1,772 of proceeds, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2012 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2012 Notes is 6.85%.
On April 15, 2002, the Consolidated Operating Partnership, through the Operating Partnership, issued $50,000 of senior unsecured debt which matures on April 15, 2032 and bears a coupon interest rate of 7.75% (the “2032 Notes”). The issue price of the 2032 Notes was 98.660%. Interest is paid semi-annually in arrears on April 15 and October 15. The debt issue discount is being amortized over the life of the 2032 Notes as an adjustment to interest expense. Including the impact of the offering discount, the Consolidated Operating Partnership’s effective interest rate on the 2032 Notes is 7.87%.
On May 17, 2004, the Consolidated Operating Partnership, through the Operating Partnership, exchanged $125,000 of senior unsecured debt which matures on June 1, 2014 and bears a coupon interest rate of 6.42% (the “2014 Notes”) the 2011 PATS and net cash in the amount of $8,877. The issue price of the 2014 Notes was 99.123%. Interest is paid semi-annually in arrears on June 1 and December 1. The debt issue discount of the Notes is being amortized over the life of the 2014 Notes as an adjustment to interest expense. This exchange is being accounted for under EITF 96-19, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments” (“EITF 96-19”). Under EITF 96-19, if the 2011 PATS and the 2014 Notes are not substantially different, the difference between the fair value of the 2011 PATS and the carrying value of the 2011 PATS, as well as the unamortized deferred financing costs of the 2011 PATS on the date of the exchange, is deferred and amortized over the life of the 2014 Notes. The Consolidated Operating Partnership is
F-26
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
amortizing this amount over the life of the 2014 Notes. Including the impact of the offering discount, the Consolidated Operating Partnership’s effective interest rate on the 2014 Notes is 6.54%.
On June 14, 2004, the Consolidated Operating Partnership, through the Operating Partnership, issued $125,000 of senior unsecured debt which matures on June 15, 2009 and bears a coupon interest rate of 5.25% (the “2009 Notes”). The issue price of the 2009 Notes was 99.826%. Interest is paid semi-annually in arrears on June 15 and December 15. The Consolidated Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2009 Notes prior to issuance. The Consolidated Operating Partnership settled the interest rate protection agreements for approximately $6,657 of proceeds, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2009 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2009 Notes is 4.10%.
All of the Senior Unsecured Debt contains certain covenants, including limitations on incurrence of debt and debt service coverage.
Unsecured Lines of Credit
The Consolidated Operating Partnership has maintained an unsecured revolving line of credit facility since 1997 (the “Unsecured Line of Credit”). On August 23, 2005, the Operating Partnership amended and restated the 2004 Unsecured Line of Credit. The amended and restated unsecured line of credit (the “2005 Unsecured Line of Credit I”) matures on September 28, 2008, has a borrowing capacity of $500,000, with the right, subject to certain conditions, to increase the borrowing capacity up to $600,000 and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Operating Partnership’s election. The net unamortized deferred financing fees related to the Unsecured Line of Credit and any additional deferred financing fees incurred related to the 2005 Unsecured Line of Credit I are being amortized over the life of the 2005 Unsecured Line of Credit I in accordance with Emerging Issues Task Force Issue 98-14, “Debtor’s Accounting for Changes inLine-of-Credit or Revolving-Debt Arrangements”, except for $51, which represents the write off of deferred financing costs and is included in the gain from early retirement of debt. The 2005 Unsecured Line of Credit I contains certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness.
In December 2005, the Operating Partnership, entered into another unsecured line of credit (the “2005 Unsecured Line of Credit II”; together with the 2005 Unsecured Line of Credit I, the “Unsecured Lines of Credit”). The 2005 Unsecured Line of Credit II has a borrowing capacity of $125,000 and matures on March 15, 2006. The 2005 Unsecured Line of Credit II provides for interest only payments at LIBOR plus .625% or at Prime, at the Operating Partnership’s election. The Operating Partnership, paid off and retired the 2005 Unsecured Line of Credit II in January 2006 (See Note 17).
F-27
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table discloses certain information regarding the Consolidated Operating Partnership’s mortgage loans, senior unsecured debt and unsecured line of credit:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Outstanding Balance at | | | Accrued Interest Payable at | | | Interest Rate at | | | | |
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | December 31,
| | | Maturity
| |
| | | 2005 | | | 2004 | | | 2005 | | | 2004 | | | 2005 | | | Date | |
| |
Mortgage Loans Payable, Net | | | | | | | | | | | | | | | | | | | | | | | | |
| Assumed Loan I | | $ | 2,320 | | | $ | 2,874 | | | $ | — | | | $ | 22 | | | | 9.250 | % | | | 09/01/09 | |
| Assumed Loan II | | | 1,805 | | | | 1,995 | | | | — | | | | 15 | | | | 9.250 | % | | | 01/01/13 | |
| Acquisition Mortgage Loan IV | | | 1,936 | | | | 2,037 | | | | 14 | | | | 15 | | | | 8.950 | % | | | 10/01/06 | |
| Acquisition Mortgage Loan VIII | | | 5,308 | | | | 5,461 | | | | 37 | | | | 38 | | | | 8.260 | % | | | 12/01/19 | |
| Acquisition Mortgage Loan IX | | | 5,505 | | | | 5,664 | | | | 38 | | | | 39 | | | | 8.260 | % | | | 12/01/19 | |
| Acquisition Mortgage Loan X | | | 15,733 | (1) | | | 16,251 | (1) | | | 98 | | | | 99 | | | | 8.250 | % | | | 12/01/10 | |
| Acquisition Mortgage Loan XII | | | 2,503 | (1) | | | 2,565 | (1) | | | 15 | | | | 15 | | | | 7.540 | % | | | 01/01/12 | |
| Acquisition Mortgage Loan XIII | | | — | (3) | | | 13,862 | (1) | | | — | | | | 42 | | | | 5.600 | % | | | 11/10/12 | |
| Acquisition Mortgage Loan XIV | | | 6,392 | (1) | | | 6,740 | (1) | | | 34 | | | | 13 | | | | 6.940 | % | | | 07/01/09 | |
| Acquisition Mortgage Loan XV | | | 1,167 | | | | — | | | | — | | | | — | | | | 0.000 | % | | | 01/12/06 | |
| Acquisition Mortgage Loan XVI | | | 1,960 | (1) | | | — | | | | 9 | | | | — | | | | 5.500 | % | | | 09/30/24 | |
| Acquisition Mortgage Loan XVII | | | 3,209 | (1) | | | — | | | | 18 | | | | — | | | | 7.375 | % | | | 05/01/16 | |
| Acquisition Mortgage Loan XVIII | | | 7,091 | (1) | | | — | | | | 42 | | | | — | | | | 7.580 | % | | | 03/01/11 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 54,929 | | | $ | 57,449 | | | $ | 305 | | | $ | 298 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Senior Unsecured Debt, Net | | | | | | | | | | | | | | | | | | | | | | | | |
| 2005 Notes | | $ | — | (4) | | $ | 50,000 | | | $ | — | | | $ | 383 | | | | 6.900 | % | | | 11/21/05 | |
| 2006 Notes | | | 150,000 | | | | 150,000 | | | | 875 | | | | 875 | | | | 7.000 | % | | | 12/01/06 | |
| 2007 Notes | | | 149,992 | (2) | | | 149,988 | (2) | | | 1,456 | | | | 1,456 | | | | 7.600 | % | | | 05/15/07 | |
| 2017 Notes | | | 99,886 | (2) | | | 99,876 | (2) | | | 625 | | | | 625 | | | | 7.500 | % | | | 12/01/17 | |
| 2027 Notes | | | 15,054 | (2) | | | 15,053 | (2) | | | 138 | | | | 138 | | | | 7.150 | % | | | 05/15/27 | |
| 2028 Notes | | | 199,823 | (2) | | | 199,815 | (2) | | | 7,009 | | | | 7,009 | | | | 7.600 | % | | | 07/15/28 | |
| 2011 Notes | | | 199,685 | (2) | | | 199,624 | (2) | | | 4,343 | | | | 4,343 | | | | 7.375 | % | | | 03/15/11 | |
| 2012 Notes | | | 199,132 | (2) | | | 198,994 | (2) | | | 2,903 | | | | 2,903 | | | | 6.875 | % | | | 04/15/12 | |
| 2032 Notes | | | 49,413 | (2) | | | 49,390 | (2) | | | 818 | | | | 818 | | | | 7.750 | % | | | 04/15/32 | |
| 2009 Notes | | | 124,849 | (2) | | | 124,806 | (2) | | | 292 | | | | 292 | | | | 5.250 | % | | | 06/15/09 | |
| 2014 Notes | | | 111,059 | (2) | | | 109,978 | (2) | | | 669 | | | | 669 | | | | 6.420 | % | | | 06/01/14 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 1,298,893 | | | $ | 1,347,524 | | | $ | 19,128 | | | $ | 19,511 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Unsecured Lines of Credit | | | | | | | | | | | | | | | | | | | | | | | | |
| 2005 Unsecured Line of Credit I | | $ | 332,500 | | | $ | 167,500 | | | $ | 1,833 | | | $ | 549 | | | | 4.845 | % | | | 09/28/08 | |
| 2005 Unsecured Line of Credit II | | | 125,000 | | | | — | | | | 232 | | | | — | | | | 4.995 | % | | | 03/15/06 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 457,500 | | | $ | 167,500 | | | $ | 2,065 | | | $ | 549 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | | At December 31, 2005, the Acquisition Mortgage Loan X, the Acquisition Mortgage Loan XII, the Acquisition Mortgage Loan XIV, the Acquisition Mortgage Loan XVI, the Acquisition Mortgage Loan XVII, the Acquisition Mortgage Loan XVIII, includes unamortized premiums of $1,909, $228, $432, $26, $246, and $681, respectively. At December 31, 2004, the Acquisition Mortgage Loan X, the Acquisition Mortgage Loan XII,the Acquisition Mortgage Loan XIII, and the Acquisition Mortgage Loan XIV include unamortized premiums of $2,291, $267, $453 and $553, respectively. |
F-28
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | |
| (2) | | At December 31, 2005, the 2007 Notes, 2017 Notes, 2027 Notes, 2028 Notes, 2011 Notes, 2012 Notes, 2032 Notes, 2009 Notes and the 2014 Notes are net of unamortized discounts of $8, $114, $16, $177, $315, $868, $587, $151, and $13,941, respectively. At December 31, 2004, the 2007 Notes, 2017 Notes, 2027 Notes, 2028 Notes, the 2011 Notes, 2012 Notes, 2032 Notes, 2009 Notes and the 2014 Notes are net of unamortized discounts of $12, $124, $17, $185, $376, $1,006, $610, $194 and $15,022, respectively. |
| |
| (3) | | On July 13, 2005, the Acquisition Mortgage Loan XIII was assumed by a third party in connection with the sale of the properties that collateralized the loan. |
| |
| (4) | | On November 21, 2005, the 2005 Notes were paid off and retired. |
The following is a schedule of the stated maturities and scheduled principal payments of the mortgage loans, senior unsecured debt and unsecured lines of credit, exclusive of premiums and discounts, for the next five years ending December 31, and thereafter:
| | | | | |
| | | Amount | |
| |
| 2006 | | $ | 280,028 | |
| 2007 | | | 152,153 | |
| 2008 | | | 334,833 | |
| 2009 | | | 132,195 | |
| 2010 | | | 15,240 | |
| Thereafter | | | 909,528 | |
| | | | | |
| Total | | $ | 1,823,977 | |
| | | | | |
Fair Value
At December 31, 2005 and 2004, the fair value of the Consolidated Operating Partnership’s mortgage loans payable, senior unsecured debt and unsecured lines of credit were as follows:
| | | | | | | | | | | | | | | | | |
| | | December 31, 2005 | | | December 31, 2004 | |
| | | Carrying
| | | Fair
| | | Carrying
| | | Fair
| |
| | | Amount | | | Value | | | Amount | | | Value | |
| |
| Mortgage Loans Payable | | $ | 54,929 | | | $ | 56,455 | | | $ | 57,449 | | | $ | 60,286 | |
| Senior Unsecured Debt | | | 1,298,893 | | | | 1,415,268 | | | | 1,347,524 | | | | 1,503,012 | |
| Unsecured Lines of Credit | | | 457,500 | | | | 457,500 | | | | 167,500 | | | | 167,500 | |
| | | | | | | | | | | | | | | | | |
| Total | | $ | 1,811,322 | | | $ | 1,929,223 | | | $ | 1,572,473 | | | $ | 1,730,798 | |
| | | | | | | | | | | | | | | | | |
The fair value of the senior unsecured debt was determined by quoted market prices, if available. The fair values of the Consolidated Operating Partnership’s senior unsecured debt not valued by quoted market prices and mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of the Unsecured Lines of Credit was equal to its carrying value due to the variable interest rate nature of the loans.
Other Comprehensive Income
In conjunction with the prior issuances of senior unsecured debt, the Consolidated Operating Partnership, through the Operating Partnership, entered into interest rate protection agreements to fix the interest rate on anticipated offerings of senior unsecured debt (the “Interest Rate Protection Agreements”). In the next
F-29
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
12 months, the Consolidated Operating Partnership will amortize approximately $1,077 of the Interest Rate Protection Agreements into net income as a decrease to interest expense.
In March 2004, the Consolidated Operating Partnership, through the Operating Partnership, entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73,500, was effective from July 1, 2004 through July 1, 2009 and fixed the LIBOR rate at 3.354%. In conjunction with the offering of the 2009 Notes, the Consolidated Operating Partnership settled this interest rate protection agreement and received proceeds in the amount of $3,817, which is recognized in other comprehensive income. The Consolidated Operating Partnership is amortizing this settlement amount into net income over the life of the 2009 Notes as an adjustment to interest expense.
In March 2004, the Consolidated Operating Partnership, through the Operating Partnership, entered into another interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73,500, was effective from August 15, 2004 through August 15, 2009 and fixed the LIBOR rate at 3.326%. In May 2004, the Consolidated Operating Partnership reduced the projected amount of the future debt offering and settled $24,500 of this interest rate protection agreement for proceeds in the amount of $1,450 which is recognized in net income as mark-to-market/gain on settlement of interest rate protection agreements. In conjunction with the offering of the 2009 Notes, the Consolidated Operating Partnership settled the remaining $49,000 of this interest rate protection agreement and received proceeds in the amount of $2,840, which is recognized in other comprehensive income. The Consolidated Operating Partnership is amortizing this settlement amount into net income over the life of the 2009 Notes as an adjustment to interest expense.
In October 2004, the Consolidated Operating Partnership, through the Operating Partnership, entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $48,980, was effective from January 5, 2005 through January 5, 2010 and fixed the LIBOR rate at 3.909%. In November 2004, the Consolidated Operating Partnership settled the interest rate protection agreement for proceeds of $310 due to a delay in the forecasted debt issuance date. Hedge ineffectiveness in the amount of $133, due to a mismatch in forecasted debt issuance dates, was recognized in net income. The remaining $159 was included in other comprehensive income and was reclassified into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
In January 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into an interest rate protection agreement which hedged the change in value of a build to suit development project the Consolidated Operating Partnership is in the process of constructing. This interest rate protection agreement has a notional value of $50,000, is based on the five year treasury, has a strike rate of 3.936% and settles on October 4, 2005. Per FASB Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”), fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement did not qualify for hedge accounting and the change in value of the interest rate protection agreement was recognized immediately in net income as opposed to other comprehensive income. On October 4, 2005 the Consolidated Operating Partnership settled the interest rate protection agreement for proceeds of $675. The settlement was recognized inmark-to-market/gain on settlement of interest rate protection agreements for the year ended December 31, 2005.
In October 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into an interest rate protection agreement which hedged the change in value of a build to suit
F-30
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
development project the Consolidated Operating Partnership is in the process of constructing. This interest rate protection agreement has a notional value of $50,000, is based on the three Month LIBOR rate, has a strike rate of 4.8675%, and has an effective date of December 30, 2005 and a termination date of December 30, 2010. Per FAS 133, fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement does not qualify for hedge accounting and the change in value of the interest rate protection agreement will be recognized immediately in net income as opposed to other comprehensive income. The Consolidated Operating Partnership recognized $16 in net loss from themark-to-market of the interest rate protection agreement for the year ended December 31, 2005. See Note 17 for further disclosure on the settlement of the interest rate protection agreement.
In December 2005, the Consolidated Operating Partnership entered into three interest rate protection agreements which fixed the interest rate on a forecasted offering of unsecured debt which it designated as cash flow hedges. Two of the interest rate protection agreements each had a notional value of $48,700 and were effective from December 30, 2005 through December 30, 2015. The interest rate protection agreements fixed the LIBOR rate at 5.066% and 5.067%. The third interest rate protection agreement had a notional value of $48,700, is effective from January 19, 2006 through January 19, 2016, and fixed the LIBOR rate at 4.992%. The Consolidated Operating Partnership recognized a loss of $1,414 in other comprehensive income related to themark-to-market of these interest rate protection agreements at December 31, 2005 as the interest rate protection agreements are highly effective based on the hypothetical derivative method. See Note 17 for further disclosure on the settlement of these interest rate protection agreements in January 2006 in conjunction with the issuance of senior unsecured debt.
The Operating Partnership has issued general partnership units and limited partnership units (together, the “Units”) and preferred general partnership units. The general partnership units resulted from capital contributions from the Company. The limited partnership units are issued in conjunction with the acquisition of certain properties (see discussion below). Subject tolock-up periods and certain adjustments, limited partnership units are convertible into common stock, $.01 par value, of the Company on aone-for-one basis or cash at the option of the Company. The preferred general partnership units result from preferred capital contributions from the Company. The preferred general partnership units had an aggregate liquidation priority of $312,500 and $125,000 as of December 31, 2005 and 2004, respectively. The Operating Partnership is required to make all required distributions on the preferred general partnership units prior to any distribution of cash or assets to the holders of the Units. The consent of the holder of the limited partnership units is required to alter such holder’s rights as to allocations and distributions, to alter or modify such holder’s rights with respect to redemption, to cause the early termination of the Consolidated Operating Partnership, or to amend the provisions of the partnership agreement which requires such consent.
Unit Contributions:
On December 9, 2005, the Company issued 1,250,000 shares of $.01 par value common stock (the “December 2005 Equity Offering”). The net proceeds of $48,775 received from the December 2005 Equity Offering were contributed to the Operating Partnership in exchange for 1,250,000 Units and are reflected in the Operating Partnership’s financial statements as a general partner contribution.
On September 16, 2004, the Company and the Operating Partnership entered into a sales agreement to sell up to 3,900,000 shares of the Company’s common stock from time to time with Cantor Fitzgerald & Co.,
F-31
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
as sales agent, in a controlled equity offering program. During the year ended December 31, 2004, the Company issued 1,333,600 shares of common stock under the controlled equity offering program and received net proceeds of $48,820. The Company contributed the net proceeds to the Consolidated Operating Partnership and the Consolidated Operating Partnership, through the Operating Partnership, issued Units to the Company in the same amount.
For the year ended December 31, 2005, the Operating Partnership issued 366,472 Units valued, in the aggregate, at $14,698 in exchange for interests in certain properties. These contributions are reflected in the Consolidated Operating Partnership’s financial statements as limited partner contributions.
For the year ended December 31, 2003, certain employees of the Company exercised 531,473 non-qualified employee stock options. Net proceeds to the Company approximated $14,799. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner contribution.
For the year ended December 31, 2004, certain employees of the Company exercised 1,663,652 non-qualified employee stock options. Net proceeds to the Company approximated $37,301. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner contribution.
For the year ended December 31, 2005, certain employees of the Company exercised 248,881 non-qualified employee stock options. Net proceeds to the Company approximated $6,698. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner contribution.
The following table is a roll-forward of the General Partnership and Limited Partnership units outstanding, including unvested restricted units, for the three years ended December 31, 2005:
| | | | | |
| | | General Partnership and
|
| | | Limited Partnership
|
| | | Units Outstanding |
| |
Balance at December 31, 2002 | | | 45,410,277 | |
| Issuance of General Partner Units | | | 542,744 | |
| Issuance of General Partner Restricted Units | | | 704,844 | |
| Repurchase and Retirement of Restricted Units | | | (66,183 | ) |
| Purchase of General Partnership Units | | | (37,300 | ) |
| | | | | |
Balance at December 31, 2003 | | | 46,554,382 | |
| | | | | |
| Issuance of General Partner Units | | | 2,621,082 | |
| Issuance of General Partner Restricted Units | | | 216,617 | |
| Repurchase and Retirement of Restricted Units | | | (102,076 | ) |
| | | | | |
Balance at December 31, 2004 | | | 49,290,005 | |
| | | | | |
| Issuance of General Partner Units | | | 1,480,942 | |
| Issuance of General Partner Restricted Units | | | 200,042 | |
| Repurchase and Retirement of Restricted Units | | | (152,009 | ) |
| Issuance of Limited Partner Units | | | 366,472 | |
| | | | | |
Balance at December 31, 2005 | | | 51,185,452 | |
| | | | | |
F-32
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Preferred Contributions:
On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 85/8%, $.01 par value, Series C Cumulative Preferred Stock (the “Series C Preferred Stock”), at an initial offering price of $25 per Depositary Share. The net proceeds of $47,997 received from the Series C Preferred Stock were contributed to the Consolidated Operating Partnership in exchange for 85/8% Series C Cumulative Preferred Units (the “Series C Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner preferred unit contribution.
On February 4, 1998, the Company issued 5,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.95%, $.01 par value, Series D Cumulative Preferred Stock (the “Series D Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds of $120,562 received from the Series D Preferred Stock were contributed to the Operating Partnership in exchange for 7.95% Series D Cumulative Preferred Units (the “Series D Preferred Units”). On or after February 4, 2003, the Series D Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $125,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series D Preferred Stock on June 7, 2004 at a redemption price of $25.00 per Depositary Share and paid a prorated second quarter dividend of $.36990 per Depositary Share, totaling approximately $1,850. The Series D Preferred Units were redeemed on June 7, 2004 as well. In accordance with EITF D-42, due to the redemption of the Series D Preferred Units, the initial offering costs associated with the issuance of the Series D Preferred Units of $4,467 were reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per unit for the year ended December 31, 2004.
On March 18, 1998, the Company issued 3,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.90%, $.01 par value, Series E Cumulative Preferred Stock (the “Series E Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds of $72,138 received from the Series E Preferred Stock were contributed to the Operating Partnership in exchange for 7.90% Series E Cumulative Preferred Units (the “Series E Preferred Units”). On or after March 18, 2003, the Series E Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $75,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series E Preferred Stock on June 7, 2004 at a redemption price of $25.00 per Depositary Share and paid a prorated second quarter dividend of $.36757 per Depositary Share, totaling approximately $1,103. The Series E Preferred Units were redeemed on June 7, 2004 as well. In accordance with EITF D-42, due to the redemption of the Series E Preferred Units, the initial offering costs associated with the issuance of the Series E Preferred Units of $2,892 were reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per unit for the year ended December 31, 2004.
On May 27, 2004, the Company issued 50,000 Depositary Shares, each representing 1/100th of a share of the Company’s 6.236%, $.01 par value, Series F Flexible Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share for gross proceeds of $50,000. Net of offering costs, the Company received net proceeds of $49,075 from the issuance of the Series F Preferred Stock which were contributed to the Operating Partnership in exchange for 6.236% Series F Cumulative Preferred Units (the “Series F Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series F Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance through March 31, 2009 (the “Series F Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 6.236% per annum of the liquidation preference (the “Series F Initial Distribution Rate”) (equivalent to $62.36 per Depositary Share). On or after March 31, 2009, the Series F Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain
F-33
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.375% (the initial credit spread), plus the greater of (i) the3-month LIBOR Rate, (ii) the10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the30-year Treasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series F Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series F Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series F Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series G Preferred Stock (hereinafter defined) and Series I Preferred Stock (hereinafter defined). On or after March 31, 2009, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series F Initial Fixed Rate Period, the Series F Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series F Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
On May 27, 2004, the Company issued 25,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.236%, $.01 par value, Series G Flexible Cumulative Redeemable Preferred Stock (the “Series G Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share for gross proceeds of $25,000. Net of offering costs, the Company received net proceeds of $24,512 from the issuance of the Series G Preferred Stock which were contributed to the Operating Partnership in exchange for 7.236% Series G Cumulative Preferred Units (the “Series G Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series G Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance of the Series G Preferred Stock through March 31, 2014 (the “Series G Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 7.236% per annum of the liquidation preference (the “Series G Initial Distribution Rate”) (equivalent to $72.36 per Depositary Share). On or after March 31, 2014, the Series G Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.500% (the initial credit spread), plus the greater of (i) the3-month LIBOR Rate, (ii) the10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the30-year Treasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series G Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series G Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series G Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series I Preferred Stock (hereinafter defined). On or after March 31, 2014, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series G Initial Fixed Rate Period, the Series G Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $25,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series G Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
On June 2, 2004, the Company issued 500 shares of 2.965% $.01 par value, Series H Flexible Cumulative Redeemable Preferred Stock (the “Series H Preferred Stock”), at an initial offering price of $250,000 per share for gross proceeds of $125,000. Net of offering costs, the Company received net proceeds of $120,837 from the issuance of the Series H Preferred Stock which were contributed to the Consolidated Operating Partnership in exchange for Series H Cumulative Preferred Units (the “Series H Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner preferred unit contribution. On
F-34
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
or after July 2, 2004, the Series H Preferred Stock became redeemable for cash at the option of the Company, in whole but not in part, at a redemption price equivalent, initially, to $242,875 per share plus accrued and unpaid dividends. The Company redeemed the Series H Preferred Stock on July 2, 2004 and paid a prorated second and third quarter dividend of $629.555 per share, totaling approximately $315. The Series H Preferred Units were redeemed on July 2, 2004 as well. In accordance with EITF D-42, due to the redemption of the Series H Preferred Units, the initial offering costs associated with the issuance of the Series H Preferred Units of $600 is reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per Unit for the year ended December 31, 2004.
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, of $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187,500. Net of offering costs, the Company received net proceeds of $181,484 million from the issuance of the Series I Preferred Stock which were contributed to the Operating Partnership in exchange for Series I Cumulative Preferred Units (the “Series I Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series I Depositary Shares are payable monthly in arrears commencing December 31, 2005 at an initial dividend rate of One-Month LIBOR plus 1.25%, subject to reset on the four-month, six-month and one year anniversary of the date of issuance. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series I Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. See Note 17 for further disclosure on the redemption of the Series I Preferred Units in January 2006.
Distributions:
On January 24, 2005, the Operating Partnership paid a fourth quarter 2004 distribution of $0.6950 per Unit, totaling approximately $34,255. On April 18, 2005, the Operating Partnership paid a first quarter 2005 distribution of $0.6950 per Unit, totaling approximately $34,339. On July 18, 2005, the Operating Partnership paid a second quarter 2005 distribution of $0.6950 per Unit, totaling approximately $34,485. On October 17, 2005, the Operating Partnership paid a third quarter 2005 distribution of $0.6950 per Unit, totaling approximately $34,593.
On March 31, 2005, the Operating Partnership paid first quarter 2005 distributions of $53.906 per Unit on its 8.625% Series C Preferred Units, a semi-annual distribution of $3,118.00 per Unit on its Series F Preferred Units and a semi-annual distribution of $3,618.00 per Unit on its Series G Preferred Units. The preferred unit distributions paid on March 31, 2005, totaled approximately $3,542. On June 30, 2005, the Operating Partnership paid second quarter 2005 distributions of $53.906 per Unit Series C Preferred Units, totaling approximately $1,078 and accrued dividends of $780 on its Series F Preferred Units and $452 on its Series G Preferred Units. On September 30, 2005, the Operating Partnership paid third quarter 2005 distributions of $53.906 per Unit on its 8.625% Series C Cumulative preferred Units, a semi-annual distribution of $3,118.00 per Unit on its Series F Preferred Units and a semi-annual distribution of $3,618.00 per Unit on its Series G Preferred Units. The preferred unit distributions paid on September 30, 2005, total approximately $3,542.
On January 19, 2004, the Operating Partnership paid a fourth quarter 2003 distribution of $.6850 per Unit, totaling approximately $31,889. On April 19, 2004, the Operating Partnership paid a first quarter 2004 distribution of $.6850 per Unit, totaling approximately $32,724. On July 19, 2004, the Operating Partnership paid a second quarter 2003 distribution of $.6850 per Unit, totaling approximately $32,737. On October 18, 2004, the Operating Partnership paid a third quarter 2004 distribution of $.6850 per Unit, totaling approximately $32,872.
F-35
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
On March 31, 2004, the Operating Partnership paid first quarter 2004 distributions of $53.906 per Unit on its 8.625% Series C Preferred Units, $49.688 per Unit on its Series D Preferred Units and $49.375 per Unit on its Series E Preferred Units. The preferred unit distributions paid on March 31, 2004, totaled approximately $5,044. On June 30, 2004 the Operating Partnership paid a second quarter 2004 distribution of $53.906 per Unit on its Series C Preferred Units, totaling approximately $1,078. On September 30, 2004, the Operating Partnership paid a third quarter 2004 distribution of $53.906 per Unit on its Series C Preferred Units, a pro rata distribution for the period May 27, 2004 through September 30, 2004 of $2,165.28 per Unit on its Series F Preferred Units and a pro rata distribution for the period May 27, 2004 through September 30, 2004 of $2,512.50 per Unit on its Series G Preferred Units. The preferred unit distribution paid on September 30, 2004, totaled approximately, $2,788. On December 31, 2004 the Operating Partnership paid a fourth quarter 2004 distribution of $53.906 per Unit on its Series C Preferred Units, totaling approximately $1,078 and accrued dividends of $780 on its Series F Preferred Units and $452 on its Series G Preferred Units.
Repurchase of Units:
In March 2000, the Company’s Board of Directors approved the repurchase of up to $100,000 of the Company’s common stock. The Company may make purchases from time to time, if price levels warrant, in the open market or in privately negotiated transactions. During the year ended December 31, 2003, the Company repurchased 37,300 shares of its common stock at a weighted average price of approximately $26.73 per share. The Operating Partnership repurchased general partnership units from the Company in the same amount.
| |
| 8. | Acquisition and Development of Real Estate |
In 2003, the Consolidated Operating Partnership acquired 62 industrial properties comprising, in the aggregate, approximately 6.3 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $219,091, excluding costs incurred in conjunction with the acquisition of properties. The Consolidated Operating Partnership also substantially completed development of 33 properties comprising approximately 3.2 million square feet (unaudited) of GLA at a cost of approximately $156,268. The Consolidated Operating Partnership reclassed the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
In 2004, the Consolidated Operating Partnership acquired 77 industrial properties comprising, in the aggregate, approximately 8.9 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $393,098, excluding costs incurred in conjunction with the acquisition of properties. The Consolidated Operating Partnership also substantially completed development of 11 properties comprising approximately 2.3 million square feet (unaudited) of GLA at a cost of approximately $80,241. The Consolidated Operating Partnership reduced the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
In 2005, the Consolidated Operating Partnership acquired 149 industrial properties comprising, in the aggregate, approximately 18.4 million square feet (unaudited) of GLA and several land parcels. The gross purchase price for 148 industrial properties and several land parcels totaled approximately $690,560, excluding costs incurred in conjunction with the acquisition of properties. Additionally, one industrial property was acquired through foreclosure due to a default on a mortgage loan receivable. The Consolidated Operating Partnership also substantially completed development of five properties comprising approximately 1.8 million square feet (unaudited) of GLA at a cost of approximately $97,466. The Consolidated Operating Partnership reduced the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
F-36
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Intangible Assets Subject To Amortization in the Period of Acquisition
The fair value of in-place leases, above market leases, and below market leases recorded as a result of the above acquisitions is $54,084, $4,997, and ($21,254), respectively. The weighted average life in months of in-place leases, above market leases, and below market leases recorded as a result of 2005 acquisitions was 142, 78, and 126 months, respectively.
| |
| 9. | Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations |
In 2003, the Consolidated Operating Partnership, through the Operating Partnership, sold 121 industrial properties comprising approximately 6.3 million square feet (unaudited) of GLA and several land parcels. Eight of the 121 industrial sold properties comprising approximately .7 million square feet (unaudited) of GLA were sold to the December 2001 Joint Venture. Gross proceeds from the sales of the 121 industrial properties and several land parcels were approximately $357,503. The gain on sale of real estate was approximately $84,391, of which $74,797 is shown in discontinued operations. In accordance with FAS 144, the results of operations and gain on sale of real estate for the 113 of the 121 sold properties are included in discontinued operations.
In 2004, the Consolidated Operating Partnership, through the Operating Partnership, sold 90 industrial properties comprising approximately 6.8 million square feet (unaudited) of GLA and several land parcels. Gross proceeds from the sales of the 90 industrial properties and several land parcels were approximately $393,029. The gain on sale of real estate was approximately $96,918, of which $81,806 is shown in discontinued operations. Eighty-six of the 90 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 86 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the four industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
In 2005, the Consolidated Operating Partnership, through the Operating Partnership, sold 82 industrial properties comprising approximately 10.7 million square feet (unaudited) of GLA and several land parcels. Of the 82 industrial properties sold, seven industrial property sales were made to the March 2005 Joint Venture (see Note 5). Gross proceeds from the sales of the 82 industrial properties and several land parcels were approximately $561,622. The gain on sale of real estate was approximately $131,612, of which $102,742 is shown in discontinued operations. Seventy-three of the 82 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 73 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the nine industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
At December 31, 2005, the Consolidated Operating Partnership had five industrial properties comprising approximately .2 million square feet (unaudited) of GLA and certain land parcels held for sale. In accordance with FAS 144, the results of operations of the five industrial properties held for sale at December 31, 2005 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.
F-37
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table discloses certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership for the years ended December 31, 2005, 2004 and 2003.
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Total Revenues | | $ | 19,897 | | | $ | 38,239 | | | $ | 63,294 | |
| Operating Expenses | | | (7,102 | ) | | | (13,234 | ) | | | (20,317 | ) |
| Interest Expense | | | (373 | ) | | | (609 | ) | | | (561 | ) |
| Depreciation and Amortization | | | (6,682 | ) | | | (10,462 | ) | | | (14,270 | ) |
| Provision for Income Taxes Allocable to Operations | | | (2,035 | ) | | | (2,533 | ) | | | (1,439 | ) |
| Gain on Sale of Real Estate | | | 102,742 | | | | 81,806 | | | | 74,797 | |
| Provision for Income Taxes Allocable Gain on Sale of Real Estate | | | (19,719 | ) | | | (8,267 | ) | | | (1,988 | ) |
| | | | | | | | | | | | | |
| Income from Discontinued Operations | | $ | 86,728 | | | $ | 84,940 | | | $ | 99,516 | |
| | | | | | | | | | | | | |
In conjunction with certain property sales, the Consolidated Operating Partnership provided seller financing. At December 31, 2005, 2004 and 2003, the Consolidated Operating Partnership had mortgage notes receivable and accrued interest outstanding of approximately $0, $19,739 and $29,336 respectively, which is included as a component of prepaid expenses and other assets. Also, in December 2004, the Consolidated Operating Partnership sold $15,170 of its notes receivable to a third party for par.
F-38
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| |
| 10. | Supplemental Information to Statements of Cash Flows |
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Interest paid, net of capitalized interest | | $ | 107,397 | | | $ | 98,733 | | | $ | 95,180 | |
| | | | | | | | | | | | | |
| Interest capitalized | | $ | 3,271 | | | $ | 1,304 | | | $ | 761 | |
| | | | | | | | | | | | | |
| Income Taxes Paid | | $ | 36,080 | | | $ | 7,936 | | | $ | 1,367 | |
| | | | | | | | | | | | | |
| Supplemental schedule of noncash investing and financing activities: | | | | | | | | | | | | |
| Distribution payable on general and limited units | | $ | 35,752 | | | $ | 34,255 | | | $ | 31,889 | |
| | | | | | | | | | | | | |
| Distribution payable on preferred units | | $ | 3,757 | | | $ | 1,232 | | | $ | — | |
| | | | | | | | | | | | | |
| Exchange of Limited partnership units for General partnership units: | | | | | | | | | | | | |
| Limited partnership units | | $ | (1,951 | ) | | $ | (6,195 | ) | | $ | (2,750 | ) |
| General partnership units | | | 1,951 | | | | 6,195 | | | | 2,750 | |
| | | | | | | | | | | | | |
| | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | |
| In conjunction with the property and land acquisitions, the following assets and liabilities were assumed: | | | | | | | | | | | | |
| Deferred purchase price | | $ | — | | | $ | — | | | $ | (10,425 | ) |
| | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | (4,248 | ) | | $ | (3,181 | ) | | $ | (1,897 | ) |
| | | | | | | | | | | | | |
| Issuance of Operating Partnership Units | | $ | (14,698 | ) | | $ | — | | | $ | — | |
| | | | | | | | | | | | | |
| Mortgage debt | | $ | (11,545 | ) | | $ | (18,244 | ) | | $ | (20,751 | ) |
| | | | | | | | | | | | | |
| Foreclosed property acquisition and write-off of a mortgage loan receivable | | $ | 3,870 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | |
| Write off of fully depreciated assets | | $ | 59,920 | | | $ | 21,487 | | | $ | — | |
| | | | | | | | | | | | | |
| In conjunction with certain property sales, the Company provided seller financing or assigned a mortgage loan payable: | | | | | | | | | | | | |
| Notes receivable | | $ | 42,543 | | | $ | 30,250 | | | $ | 29,203 | |
| | | | | | | | | | | | | |
| Mortgage note payable | | $ | 13,242 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | |
F-39
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| |
| 11. | Earnings Per Unit (“EPU”) |
The computation of basic and diluted EPU is presented below:
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Numerator: | | | | | | | | | | | | |
| (Loss) Income from Continuing Operations | | $ | (5,671 | ) | | $ | 30,414 | | | $ | 24,268 | |
| Gain on Sale of Real Estate | | | 28,870 | | | | 15,112 | | | | 9,594 | |
| Less: Provision for Income Taxes Allocable to Gain on Sale of Real Estate | | | (10,711 | ) | | | (5,312 | ) | | | (2,322 | ) |
| Less: Preferred Unit Distributions | | | (10,688 | ) | | | (14,488 | ) | | | (20,176 | ) |
| Less: Redemption of Preferred Units | | | — | | | | (7,959 | ) | | | — | |
| | | | | | | | | | | | | |
| Income from Continuing Operations Available to Unitholders — For Basic and Diluted EPU | | | 1,800 | | | | 17,767 | | | | 11,364 | |
| Income from Discontinued Operations | | | 108,482 | | | | 95,740 | | | | 102,943 | |
| Less: Provision for Income Taxes Allocable to Discontinued Operations | | | (21,754 | ) | | | (10,800 | ) | | | (3,427 | ) |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders — For Basic and Diluted EPU | | $ | 88,528 | | | $ | 102,707 | | | $ | 110,880 | |
| | | | | | | | | | | | | |
| Denominator: | | | | | | | | | | | | |
| Weighted Average Units Outstanding — Basic | | | 48,968,191 | | | | 47,136,296 | | | | 45,321,775 | |
| Effect of Dilutive Securities of the Company that Result in the Issuance of General Partner Units: | | | | | | | | | | | | |
| Employee and Director Common Stock Options | | | 141,625 | | | | 227,423 | | | | 91,599 | |
| Employee and Director Shares of Restricted Stock | | | 82,888 | | | | 103,551 | | | | 29,561 | |
| | | | | | | | | | | | | |
| Weighted Average Units Outstanding — Diluted | | | 49,192,704 | | | | 47,467,270 | | | | 45,442,935 | |
| | | | | | | | | | | | | |
| Basic EPU: | | | | | | | | | | | | |
| Income from Continuing Operations Available to Unitholders | | $ | 0.04 | | | $ | 0.38 | | | $ | 0.25 | |
| | | | | | | | | | | | | |
| Discontinued Operations, Net of Income Tax | | $ | 1.77 | | | $ | 1.80 | | | $ | 2.20 | |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 1.81 | | | $ | 2.18 | | | $ | 2.45 | |
| | | | | | | | | | | | | |
| Diluted EPU: | | | | | | | | | | | | |
| Income from Continuing Operations Available to Unitholders | | $ | 0.04 | | | $ | 0.37 | | | $ | 0.25 | |
| | | | | | | | | | | | | |
| Discontinued Operations, Net of Income Tax | | $ | 1.76 | | | $ | 1.79 | | | $ | 2.19 | |
| | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 1.80 | | | $ | 2.16 | | | $ | 2.44 | |
| | | | | | | | | | | | | |
Unvested restricted units of 700,149, 823,836, and 847,103 were outstanding as of December 31, 2005, 2004, and 2003, respectively. Unvested restricted units aggregating 182,651, 211,924, and 210,667 were anti-dilutive at December 31, 2005, 2004, and 2003, respectively, and accordingly, were excluded from dilution computations.
Additionally, options to purchase common stock of 546,723, 823,421, and 2,504,013 were outstanding as of December 31, 2005, 2004, and 2003, respectively. None of the options outstanding at December 31, 2005
F-40
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
and 2004 were antidilutive and options aggregating 1,858,191 were antidilutive at December 31, 2003, and accordingly, were excluded from dilution computations.
The components of income tax benefit (expense) for the Consolidated Operating Partnerships taxable REIT subsidiary (the “TRS”) for the years ended December 31, 2005, 2004 and 2003 are comprised of the following:
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
Current: | | | | | | | | | | | | |
| Federal | | $ | (19,265 | ) | | $ | (8,074 | ) | | $ | (873 | ) |
| State | | | (4,519 | ) | | | (1,654 | ) | | | (218 | ) |
Deferred: | | | | | | | | | | | | |
| Federal | | | 4,299 | | | | 1,070 | | | | 391 | |
| State | | | 1,009 | | | | 219 | | | | 98 | |
| | | | | | | | | | | | | |
| | | $ | (18,476 | ) | | $ | (8,439 | ) | | $ | (602 | ) |
| | | | | | | | | | | | | |
In addition to the income tax expense/benefit recognized by the TRS, $1,956 of state income taxes was recognized by the Consolidated Operating Partnership and is included in income tax expense (benefit) on the Consolidated Operating Partnership’s consolidated statement of operations for the year ended December 31, 2005.
Deferred income taxes represent the tax effect of the temporary differences between the book and tax basis of assets and liabilities. Deferred tax assets (liabilities) of the TRS include the following as of December 31, 2005, 2004 and 2003:
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Bad debt expense | | $ | 118 | | | $ | — | | | $ | — | |
| Investment in partnerships | | | 648 | | | | — | | | | — | |
| Fixed assets | | | 4,363 | | | | 2,012 | | | | 310 | |
| Prepaid rent | | | 461 | | | | 323 | | | | 149 | |
| Capitalized general and administrative expense under 263(A) | | | 2,696 | | | | 818 | | | | 576 | |
| Deferred losses/gains | | | 878 | | | | 334 | | | | 1,054 | |
| Mark-to-market of interest rate protection agreements | | | 6 | | | | — | | | | — | |
| Capitalized interest under 263(A) | | | 184 | | | | — | | | | 117 | |
| | | | | | | | | | | | | |
| Total deferred tax asset | | $ | 9,354 | | | $ | 3,487 | | | $ | 2,206 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Straight Line Rent | | | (923 | ) | | | (430 | ) | | | (438 | ) |
| Build to suit development | | | (66 | ) | | | — | | | | — | |
| | | | | | | | | | | | | |
| Total deferred tax liabilities | | $ | (989 | ) | | $ | (430 | ) | | $ | (438 | ) |
| | | | | | | | | | | | | |
| Total net deferred tax asset | | $ | 8,365 | | | $ | 3,057 | | | $ | 1,768 | |
| | | | | | | | | | | | | |
The TRS does not have any net operating loss carryforwards or tax credit carryforwards.
F-41
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The TRS’s components of income tax (expense) benefit for the years ended December 31, 2005, 2004 and 2003 are as follows:
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Tax expense associated with income from operations on sold properties which is included in discontinued operations | | $ | (2,035 | ) | | $ | (2,533 | ) | | $ | (1,439 | ) |
| Tax expense associated with gains and losses on the sale of real estate which is included in discontinued operations | | | (19,719 | ) | | | (8,267 | ) | | | (1,988 | ) |
| Tax expense associated with gains and losses on the sale of real estate | | | (10,711 | ) | | | (5,312 | ) | | | (2,322 | ) |
| Income tax benefit | | | 13,989 | | | | 7,673 | | | | 5,147 | |
| | | | | | | | | | | | | |
| Income tax expense | | $ | (18,476 | ) | | $ | (8,439 | ) | | $ | (602 | ) |
| | | | | | | | | | | | | |
In addition to the TRS’s income tax expense, the Consolidated Operating Partnership recognized $1,956 in state income taxes which are included in income tax benefit on the Consolidated Operating Partnership’s consolidated statement of operation for the year ended December 31, 2005.
The income tax benefit (expense) pertaining to income from continuing operations and gain on sale of real estate for the TRS differs from the amounts computed by applying the applicable federal statutory tax rate to income as follows:
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Tax benefit at Federal rate related to continuing operations | | $ | 1,479 | | | $ | 2,099 | | | $ | 2,008 | |
| State tax benefit, net of Federal benefit expense | | | 213 | | | | 418 | | | | 295 | |
| Meals and entertainment | | | (19 | ) | | | (16 | ) | | | (12 | ) |
| Prior year provision to return adjustments | | | 1,577 | | | | (112 | ) | | | 518 | |
| State tax rate differential | | | 43 | | | | 12 | | | | (27 | ) |
| Other | | | (15 | ) | | | (40 | ) | | | 43 | |
| | | | | | | | | | | | | |
| Net income tax benefit | | $ | 3,278 | | | $ | 2,361 | | | $ | 2,825 | |
| | | | | | | | | | | | | |
In addition to the income tax benefit pertaining to income from continuing operations and gain on sale of real estate for the TRS, income tax benefit from continuing operations on the Consolidated Statement of Operations for the year ended December 31, 2005 includes $1,956 of state income taxes recognized by the Consolidated Operating Partnership.
| |
| 13. | Future Rental Revenues |
The Consolidated Operating Partnership’s properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under non-cancelable operating leases in effect as of December 31, 2005 are approximately as follows:
| | | | | |
| 2006 | | $ | 238,907 | |
| 2007 | | | 202,901 | |
| 2008 | | | 162,903 | |
| 2009 | | | 128,505 | |
| 2010 | | | 98,532 | |
| Thereafter | | | 392,062 | |
| | | | | |
| Total | | $ | 1,223,810 | |
| | | | | |
F-42
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| |
| 14. | Employee Benefit Plans |
The Company maintains three stock incentive plans, (the “Stock Incentive Plans”) which are administered by the Compensation Committee of the Board of Directors of the Company. There are approximately 10.0 million shares reserved under the Stock Incentive Plans. Only officers, other employees of the Company, its Independent Directors and its affiliates generally are eligible to participate in the Stock Incentive Plans.
The Stock Incentive Plans authorize (i) the grant of stock options that qualify as incentive stock options under Section 422 of the Code, (ii) the grant of stock options that do not so qualify, (iii) restricted stock awards, (iv) performance share awards and (v) dividend equivalent rights. The exercise price of stock options is determined by the Compensation Committee. Special provisions apply to awards granted under the Stock Incentive Plans in the event of a change in control in the Company. As of December 31, 2005, stock options and restricted stock covering 1.2 million shares were outstanding and 2.6 million shares were available under the Stock Incentive Plans. The outstanding stock options generally vest over one to three year periods and have lives of ten years. Stock option transactions are summarized as follows:
| | | | | | | | | | | | | |
| | | | | Weighted
| | |
| | | | | Average
| | Exercise Price
|
| | | Shares | | Exercise Price | | per Share |
| |
| Outstanding at December 31, 2002 | | | 3,142,635 | | | $ | 30.06 | | | $ | 18.25 - $33.15 | |
| Exercised | | | (531,473 | ) | | $ | 27.99 | | | $ | 20.25 - $33.13 | |
| Expired or Terminated | | | (107,149 | ) | | $ | 31.34 | | | $ | 25.13 - $33.13 | |
| | | | | | | | | | | | | |
| Outstanding at December 31, 2003 | | | 2,504,013 | | | $ | 30.45 | | | $ | 18.25 - $33.15 | |
| Exercised | | | (1,663,652 | ) | | $ | 30.33 | | | $ | 18.25 - $33.15 | |
| Expired or Terminated | | | (16,940 | ) | | $ | 30.17 | | | $ | 22.75 - $33.13 | |
| | | | | | | | | | | | | |
| Outstanding at December 31, 2004 | | | 823,421 | | | $ | 30.74 | | | $ | 18.25 - $33.15 | |
| Exercised | | | (248,881 | ) | | $ | 29.57 | | | $ | 18.25 - $33.13 | |
| Expired or Terminated | | | (27,817 | ) | | $ | 30.71 | | | $ | 25.13 - $33.13 | |
| | | | | | | | | | | | | |
| Outstanding at December 31, 2005 | | | 546,723 | | | $ | 31.27 | | | $ | 22.75 - $33.15 | |
| | | | | | | | | | | | | |
The following table summarizes currently outstanding and exercisable options as of December 31, 2005:
| | | | | | | | | | | | | |
| | | | | Weighted
| | Weighted
|
| | | Number
| | Average
| | Average
|
| | | Outstanding
| | Remaining
| | Exercise
|
Range of Exercise Price | | and Exercisable | | Contractual Life | | Price |
| |
| $22.75 - $27.69 | | | 49,070 | | | | 2.74 | | | $ | 26.25 | |
| $30.00 - $33.15 | | | 497,653 | | | | 4.8 | | | $ | 31.76 | |
In September 1994, the Board of Directors approved and the Company adopted a 401(k)/Profit Sharing Plan. Under the Company’s 401(k)/Profit Sharing Plan, all eligible employees may participate by making voluntary contributions. The Company may make, but is not required to make, matching contributions. For the years ended December 31, 2005, 2004 and 2003, the Company, through the Operating Partnership, made matching contributions of approximately $358, $305, and $109, respectively.
During 2003, the Company awarded 692,888 shares of restricted Common Stock to certain employees and 11,956 shares of restricted Common Stock to certain Directors. These restricted shares of Common Stock had a fair value of approximately $20,640 on the date of grant. The restricted Common Stock vests over a period from one to ten years. Compensation expense will be charged to earnings in the Operating Partnership’s consolidated statements of operations over the vesting period.
F-43
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
During 2004, the Company awarded 206,117 shares of restricted Common Stock to certain employees and 10,500 shares of restricted Common Stock to certain Directors. These restricted shares of Common Stock had a fair value of approximately $8,379 on the date of grant. The restricted Common Stock vests over a period from one to ten years. Compensation expense will be charged to earnings in the Operating Partnership’s consolidated statements of operations over the vesting period.
During 2005, the Company awarded 189,878 shares of restricted Common Stock to certain employees and 10,164 shares of restricted Common Stock to certain Directors. These restricted shares of Common Stock had a fair value of approximately $8,381 on the date of grant. The restricted Common Stock vests over a period from one to ten years. Compensation expense will be charged to earnings in the Operating Partnership’s consolidated statements of operations over the vesting period.
| |
| 15. | Related Party Transactions |
The Consolidated Operating Partnership periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of one of the Company’s officers/Directors is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2005, 2004 and 2003, this relative received brokerage commissions in the amount of $285, $29 and $111, respectively.
At December 31, 2005 the Consolidated Operating Partnership has a payable balance of $12,166 from wholly owned entities of the Company. At December 31, 2004, the Consolidated Operating Partnership has a receivable balance of $9,650 from wholly owned entities of the Company.
| |
| 16. | Commitments and Contingencies |
In the normal course of business, the Consolidated Operating Partnership is involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the consolidated financial position, operations or liquidity of the Consolidated Operating Partnership.
Nine properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price in excess of the Consolidated Operating Partnership’s depreciated cost of the asset. The Consolidated Operating Partnership has no notice of any exercise of any tenant purchase option.
The Consolidated Operating Partnership has committed to the construction of certain industrial properties totaling approximately 4.5 million square feet (unaudited) of GLA. The estimated total construction costs are approximately $182.0 million (unaudited). Of this amount, approximately $93.8 million remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated completion cost stated above.
At December 31, 2005, the Consolidated Operating Partnership, through the Operating Partnership had 17 other letters of credit outstanding in the aggregate amount of $7,596. These letters of credit expire between March 31, 2006 and December 31, 2007.
F-44
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Ground and Operating Lease Agreements
Future minimum rental payments under the terms of all non-cancelable ground and operating leases under which the Consolidated Operating Partnership is the lessee, as of December 31, 2005, are as follows:
| | | | | |
| 2006 | | $ | 1,678 | |
| 2007 | | | 1,171 | |
| 2008 | | | 2,014 | |
| 2009 | | | 1,657 | |
| 2010 | | | 1,510 | |
| Thereafter | | | 32,630 | |
| | | | | |
| Total | | $ | 40,660 | |
| | | | | |
On January 3, 2006, the Operating Partnership paid fourth quarter 2005 distributions of $53.906 per Unit on its Series C Preferred Units, totaling, in the aggregate, approximately $1,078; and a distribution of $1,930.243 per Unit on its Series I Preferred Units, totaling, in the aggregate, approximately $1,448.
On January 5, 2006, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., settled the interest rate protection agreement entered into in October 2005 with a notional value of $50,000 for a payment of $186.
The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $353. The Operating Partnership redeemed the Series I Preferred Units as well. In accordance with EITF D-42, due to the redemption of the Series I Preferred Units, the initial offering costs associated with the issuance of the Series I Preferred Units of approximately $.7 million will be reflected as a deduction from net income to arrive at net income available to Unitholders in determining earnings per unit for the three months ended March 31, 2006.
On January 23, 2006, the Operating Partnership paid a fourth quarter 2005 distribution of $.70000 per Unit, totaling approximately $35,752.
On March 8, 2006, the Operating Partnership declared a first quarter 2006 distribution of $.7000 per Unit which is payable on April 17, 2006. The Operating Partnership also declared a first quarter 2006 preferred unit distributions of $53.906 per Unit on its 85/8% Series C Preferred Units totaling, in the aggregate, approximately $1,078, which is payable on March 31, 2006; a semi-annual distribution of $3,118.00 per Unit on its Series F Preferred Units, totaling, in the aggregate, approximately $1,559 which is payable on March 31, 2006; a semi-annual distribution of $3,618.00 per Unit on its Series G Preferred Units, totaling, in the aggregate, approximately $904, which is payable on March 31, 2006; and a quarterly distribution of $3,927.08 per Unit on its Series J Preferred Units, totaling, in the aggregate, approximately $2,356 which is payable on March 31, 2006.
From January 1, 2006 to March 8, 2006, the Company awarded 303,142 shares of restricted common stock to certain employees and 1,169 shares of restricted common stock to certain Directors. The Operating Partnership issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $11,957 on the date of grant. The restricted common stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting period.
From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142,438 (approximately $867 of which was made through the issuance of limited partnership interests in the Operating Partnership
F-45
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(“Units”)). The Consolidated Operating Partnership also sold 16 industrial properties and several land parcels including the industrial property that is accounted for as a build to suit development for sale, for approximately $240,095 of gross proceeds during this period.
On January 10, 2006, the Operating Partnership, issued $200,000 of senior unsecured debt which matures on January 15, 2016 and bears a coupon interest rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. In December 2005, the Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Operating Partnership settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1,729, which will be included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2016 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Operating Partnership’s effective interest rate on the 2016 Notes is 5.91%. The 2016 Notes contain certain covenants, including limitations on incurrence of debt and debt service coverage.
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds from the issuance of the Series J Preferred Stock were contributed to the Operating Partnership in exchange for Series J Cumulative Preferred Units (the “Series J Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the depositary shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, the Company will increase the dividend on the preferred shares to a rate of 8.25% of the liquidation preference per year. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series I Preferred Stock. The Series J Preferred Stock is not redeemable prior to January 15, 2011. However, if at any time both (i) the depositary shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. On or after January 15, 2011, the Series I Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
On January 10, 2006, the Consolidated Operating Partnership paid off the 2005 Unsecured Line of Credit II.
On January 12, 2006, the Consolidated Operating Partnership paid off and retired the Acquisition Mortgage Loan XV.
F-46
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| |
| 18. | Quarterly Financial Information (unaudited) |
The following table summarizes quarterly financial information of the Consolidated Operating Partnership. The first, second and third fiscal quarters of 2005 and all fiscal quarters in 2004 have been reclassified in accordance with FAS 144.
| | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2005 | |
| | | First
| | | Second
| | | Third
| | | Fourth
| |
| | | Quarter | | | Quarter | | | Quarter | | | Quarter | |
| |
| Total Revenues | | $ | 71,745 | | | $ | 70,910 | | | $ | 76,664 | | | $ | 104,038 | |
| Equity in Income (Loss) of Joint Ventures | | | (122 | ) | | | (98 | ) | | | 3,977 | | | | (59 | ) |
| Equity in Income Other Real Estate Partnerships | | | 6,743 | | | | 9,786 | | | | 20,490 | | | | 11,193 | |
| Income (Loss) from Continuing Operations, Net of Income Tax | | | (3,748 | ) | | | (4,419 | ) | | | 7,368 | | | | (4,953 | ) |
| Income from Discontinued Operations, Net of Income Tax | | | 9,286 | | | | 27,490 | | | | 17,754 | | | | 32,279 | |
| Gain on Sale of Real Estate, Net of Income Tax | | | 13,137 | | | | 1,734 | | | | 1,661 | | | | 1,627 | |
| Net Income | | | 18,675 | | | | 24,805 | | | | 26,783 | | | | 28,953 | |
| Preferred Unit Distributions | | | (2,310 | ) | | | (2,310 | ) | | | (2,310 | ) | | | (3,758 | ) |
| | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 16,365 | | | $ | 22,495 | | | $ | 24,473 | | | $ | 25,195 | |
| | | | | | | | | | | | | | | | | |
| Basic Earnings Per Unit: | | | | | | | | | | | | | | | | |
| Income (Loss) From Continuing Operations Available to Unitholders | | $ | 0.15 | | | $ | (0.10 | ) | | $ | 0.14 | | | $ | (0.14 | ) |
| | | | | | | | | | | | | | | | | |
| Income From Discontinued Operations | | $ | 0.19 | | | $ | 0.56 | | | $ | 0.36 | | | $ | 0.65 | |
| | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 0.34 | | | $ | 0.46 | | | $ | 0.50 | | | $ | 0.51 | |
| | | | | | | | | | | | | | | | | |
| Weighted Average Units Outstanding | | | 48,625 | | | | 48,759 | | | | 49,042 | | | | 49,436 | |
| | | | | | | | | | | | | | | | | |
| Diluted Earnings Per Unit: | | | | | | | | | | | | | | | | |
| Income (Loss) From Continuing Operations Available to Unitholders | | $ | 0.14 | | | $ | (0.10 | ) | | $ | 0.14 | | | $ | (0.14 | ) |
| | | | | | | | | | | | | | | | | |
| Income From Discontinued Operations | | $ | 0.19 | | | $ | 0.56 | | | $ | 0.36 | | | $ | 0.65 | |
| | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 0.33 | | | $ | 0.46 | | | $ | 0.50 | | | $ | 0.51 | |
| | | | | | | | | | | | | | | | | |
| Weighted Average Units Outstanding | | | 48,934 | | | | 48,759 | | | | 49,248 | | | | 49,436 | |
| | | | | | | | | | | | | | | | | |
F-47
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2004 | |
| | | First
| | | Second
| | | Third
| | | Fourth
| |
| | | Quarter | | | Quarter | | | Quarter | | | Quarter | |
| |
| Total Revenues | | $ | 63,628 | | | $ | 61,823 | | | $ | 63,854 | | | $ | 69,463 | |
| Equity in Income (Loss) of Joint Ventures | | | 245 | | | | 300 | | | | 35,303 | | | | (8 | ) |
| Equity in Income Other Real Estate Partnerships | | | 7,381 | | | | 7,191 | | | | 6,173 | | | | 8,458 | |
| Income (Loss) from Continuing Operations, Net of Income Tax | | | 2,833 | | | | (69 | ) | | | 29,260 | | | | (1,272 | ) |
| Income from Discontinued Operations, Net of Income Tax | | | 26,754 | | | | 27,315 | | | | 10,903 | | | | 19,624 | |
| Gain on Sale of Real Estate, Net of Income Tax | | | 2,385 | | | | 1,183 | | | | 1,973 | | | | 4,265 | |
| Net Income | | | 31,972 | | | | 28,429 | | | | 42,136 | | | | 22,617 | |
| Preferred Unit Distributions | | | (5,044 | ) | | | (4,790 | ) | | | (2,344 | ) | | | (2,310 | ) |
| Redemption of Preferred Units | | | — | | | | (7,359 | ) | | | (600 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 26,928 | | | $ | 16,280 | | | $ | 39,192 | | | $ | 20,307 | |
| | | | | | | | | | | | | | | | | |
| Basic Earnings Per Unit: | | | | | | | | | | | | | | | | |
| Income (Loss) From Continuing Operations Available to Unitholders | | $ | 0.00 | | | $ | (0.24 | ) | | $ | 0.60 | | | $ | 0.01 | |
| | | | | | | | | | | | | | | | | |
| Income From Discontinued Operations | | $ | 0.58 | | | $ | 0.58 | | | $ | 0.23 | | | $ | 0.42 | |
| | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 0.58 | | | $ | 0.35 | | | $ | 0.83 | | | $ | 0.43 | |
| | | | | | | | | | | | | | | | | |
| Weighted Average Units Outstanding | | | 46,229 | | | | 46,909 | | | | 46,996 | | | | 47,136 | |
| | | | | | | | | | | | | | | | | |
| Diluted Earnings Per Unit: | | | | | | | | | | | | | | | | |
| Income (Loss) From Continuing Operations Available to Unitholders | | $ | 0.00 | | | $ | (0.24 | ) | | $ | 0.60 | | | $ | 0.01 | |
| | | | | | | | | | | | | | | | | |
| Income From Discontinued Operations | | $ | 0.57 | | | $ | 0.58 | | | $ | 0.23 | | | $ | 0.41 | |
| | | | | | | | | | | | | | | | | |
| Net Income Available to Unitholders | | $ | 0.58 | | | $ | 0.35 | | | $ | 0.83 | | | $ | 0.43 | |
| | | | | | | | | | | | | | | | | |
| Weighted Average Units Outstanding | | | 46,694 | | | | 46,909 | | | | 47,310 | | | | 47,467 | |
| | | | | | | | | | | | | | | | | |
F-48
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| |
| 19. | Pro Forma Financial Information (unaudited) |
The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2005 and 2004 (the “Pro Forma Statements”) are presented as if the acquisition of 62 operating industrial properties between January 1, 2005 and December 31, 2005 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2005 and December 31, 2005 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2005. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2005 as of January 1, 2005 and 2004.
The Pro Forma Statements are not necessarily indicative of what the Consolidated Operating Partnership’s results of operations would have been for the years ended December 31, 2005 and 2004, nor do they purport to present the future results of operations of the Consolidated Operating Partnership.
Pro Forma Condensed Statements of Operations
| | | | | | | | | |
| | | Year Ended | | | Year Ended | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| |
| Total Revenues | | $ | 341,238 | | | $ | 285,473 | |
| Income from Continuing Operations Available to Unitholders | | | 7,634 | | | | 28,089 | |
| Income from Discontinued Operations, Net of Income Taxes | | | 85,745 | | | | 86,049 | |
| Net Income | | | 104,067 | | | | 136,585 | |
| Less: Preferred Dividends | | | (10,688 | ) | | | (14,488 | ) |
| Less: Redemption of Preferred Stock | | | — | | | | (7,959 | ) |
| | | | | | | | | |
| Net Income Available to Unitholders | | $ | 93,379 | | | $ | 114,138 | |
| | | | | | | | | |
| Income from Continuing Operations Available to Unitholders, Net of Minority Interest Per Weighted Average Unit Outstanding: | | | | | | | | |
| Basic | | $ | 0.16 | | | $ | 0.60 | |
| | | | | | | | | |
| Diluted | | $ | 0.16 | | | $ | 0.59 | |
| | | | | | | | | |
| | | | | | | | | |
| Income from Discontinued Operations, Net of Minority Interest and Income Taxes Per Weighted Average Unit Outstanding: | | | | | | | | |
| Basic | | $ | 1.75 | | | $ | 1.83 | |
| | | | | | | | | |
| Diluted | | $ | 1.74 | | | $ | 1.81 | |
| | | | | | | | | |
| | | | | | | | | |
| Net Income Available to Unitholders Per Weighted Average Unit Outstanding: | | | | | | | | |
| Basic | | $ | 1.91 | | | $ | 2.42 | |
| | | | | | | | | |
| Diluted | | $ | 1.90 | | | $ | 2.40 | |
| | | | | | | | | |
F-49
Report of Independent Auditors
To the Partners of
the Other Real Estate Partnerships:
In our opinion, the accompanying combined balance sheets and the related combined statements of operations, of changes in partners’ capital and of cash flows present fairly, in all material respects, the financial position of the Other Real Estate Partnerships at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Other Real Estate Partnerships’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Chicago, Illinois
March 16, 2006
F-50
OTHER REAL ESTATE PARTNERSHIPS
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| | | (Dollars in thousands) | |
| |
ASSETS |
| Assets: | | | | | | | | |
| Investment in Real Estate: | | | | | | | | |
| Land | | $ | 51,047 | | | $ | 48,290 | |
| Buildings and Improvements | | | 312,777 | | | | 321,770 | |
| Less: Accumulated Depreciation | | | (54,811 | ) | | | (57,381 | ) |
| | | | | | | | | |
| Net Investment in Real Estate | | | 309,013 | | | | 312,679 | |
| | | | | | | | | |
| Real Estate Held For Sale, Net of Accumulated Depreciation and Amortization of $466 at December 31, 2004 | | | — | | | | 2,504 | |
| Cash and Cash Equivalents | | | 1,388 | | | | 1,847 | |
| Restricted Cash | | | 14,636 | | | | — | |
| Tenant Accounts Receivable, Net | | | 1,270 | | | | 478 | |
| Deferred Rent Receivable | | | 3,390 | | | | 2,386 | |
| Deferred Financing Costs, Net | | | 2 | | | | 6 | |
| Deferred Leasing Intangibles, Net | | | 7,659 | | | | 757 | |
| Mortgage Loans Receivable | | | 24,118 | | | | 16,336 | |
| Prepaid Expenses and Other Assets, Net | | | 35,403 | | | | 15,515 | |
| | | | | | | | | |
| Total Assets | | $ | 396,879 | | | $ | 352,508 | |
| | | | | | | | | |
| |
LIABILITIES AND PARTNERS’ CAPITAL |
| Liabilities: | | | | | | | | |
| Mortgage Loans Payable, Net | | $ | 2,380 | | | $ | 2,456 | |
| Accounts Payable and Accrued Expenses | | | 5,649 | | | | 2,704 | |
| Deferred Leasing Intangibles, Net | | | 2,138 | | | | 248 | |
| Rents Received in Advance and Security Deposits | | | 4,705 | | | | 4,184 | |
| | | | | | | | | |
| Total Liabilities | | | 14,872 | | | | 9,592 | |
| | | | | | | | | |
| Commitments and Contingencies | | | — | | | | — | |
| Partners’ Capital | | | 382,007 | | | | 342,916 | |
| | | | | | | | | |
| Total Liabilities and Partners’ Capital | | $ | 396,879 | | | $ | 352,508 | |
| | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-51
OTHER REAL ESTATE PARTNERSHIPS
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| Revenues: | | | | | | | | | | | | |
| Rental Income | | $ | 34,935 | | | $ | 30,358 | | | $ | 35,204 | |
| Tenant Recoveries and Other Income | | | 8,816 | | | | 7,575 | | | | 6,152 | |
| | | | | | | | | | | | | |
| Total Revenues | | | 43,751 | | | | 37,933 | | | | 41,356 | |
| | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | |
| Real Estate Taxes | | | 5,912 | | | | 5,291 | | | | 5,333 | |
| Repairs and Maintenance | | | 2,887 | | | | 2,573 | | | | 2,511 | |
| Property Management | | | 1,440 | | | | 1,297 | | | | 1,367 | |
| Utilities | | | 2,006 | | | | 1,890 | | | | 1,622 | |
| Insurance | | | 340 | | | | 361 | | | | 320 | |
| Other | | | 802 | | | | 905 | | | | 1,013 | |
| Amortization of Deferred Financing Costs | | | 4 | | | | 3 | | | | 3 | |
| Depreciation and Other Amortization | | | 13,894 | | | | 10,533 | | | | 9,662 | |
| | | | | | | | | | | | | |
| Total Expenses | | | 27,285 | | | | 22,853 | | | | 21,831 | |
| | | | | | | | | | | | | |
| Other Income/Expense: | | | | | | | | | | | | |
| Interest Income | | | 342 | | | | 1,604 | | | | 712 | |
| Interest Expense | | | (175 | ) | | | (178 | ) | | | (256 | ) |
| Loss from Early Retirement of Debt | | | — | | | | — | | | | (1,466 | ) |
| | | | | | | | | | | | | |
| Total Other Income/Expense | | | 167 | | | | 1,426 | | | | (1,010 | ) |
| Equity in Income of Joint Ventures | | | — | | | | 1,461 | | | | — | |
| | | | | | | | | | | | | |
| Income from Continuing Operations | | | 16,633 | | | | 17,967 | | | | 18,515 | |
| Income from Discontinued Operations (Including Gain on Sale of Real Estate of $29,213, $6,439, and $4,689 for the Years Ended December 31, 2005, 2004 and 2003) | | | 31,004 | | | | 9,853 | | | | 18,932 | |
| | | | | | | | | | | | | |
| Income Before Gain on Sale of Real Estate | | | 47,637 | | | | 27,820 | | | | 37,447 | |
| Gain on Sale of Real Estate | | | 863 | | | | 1,643 | | | | 6,198 | |
| | | | | | | | | | | | | |
| Net Income | | $ | 48,500 | | | $ | 29,463 | | | $ | 43,645 | |
| | | | | | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-52
OTHER REAL ESTATE PARTNERSHIPS
| | | | | |
| | | Total | |
| | | (Dollars in thousands) | |
| |
| Balance at December 31, 2002 | | $ | 381,130 | |
| Contributions | | | 59,857 | |
| Distributions | | | (106,459 | ) |
| Net Income | | | 43,645 | |
| | | | | |
| Balance at December 31, 2003 | | $ | 378,173 | |
| Contributions | | | 68,770 | |
| Distributions | | | (133,490 | ) |
| Net Income | | | 29,463 | |
| | | | | |
| Balance at December 31, 2004 | | $ | 342,916 | |
| Contributions | | | 123,344 | |
| Distributions | | | (132,753 | ) |
| Net Income | | | 48,500 | |
| | | | | |
| Balance at December 31, 2005 | | $ | 382,007 | |
| | | | | |
The accompanying notes are an integral part of the financial statements.
F-53
OTHER REAL ESTATE PARTNERSHIPS
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31, 2005 | | | December 31, 2004 | | | December 31, 2003 | |
| | | (Dollars in thousands) | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | |
| Net Income | | $ | 48,500 | | | $ | 29,463 | | | $ | 43,645 | |
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | | | | | | | | | | | | |
| Depreciation | | | 12,749 | | | | 10,963 | | | | 10,621 | |
| Amortization of Deferred Financing Costs | | | 4 | | | | 3 | | | | 3 | |
| Loss from Early Retirement of Debt | | | — | | | | — | | | | 1,466 | |
| Other Amortization | | | 2,697 | | | | 1,872 | | | | 1,672 | |
| Gain on Sale of Real Estate | | | (30,076 | ) | | | (8,082 | ) | | | (10,887 | ) |
| Equity in Net Income of Joint Ventures | | | — | | | | (1,461 | ) | | | — | |
| Distributions from Joint Ventures | | | — | | | | | | | | — | |
| Provision for Bad Debt | | | 128 | | | | — | | | | — | |
| Change in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net | | | (20,007 | ) | | | 8,645 | | | | (3,054 | ) |
| Change in Deferred Rent Receivable | | | (1,974 | ) | | | (1,517 | ) | | | 32 | |
| Change in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits | | | 2,838 | | | | (14,963 | ) | | | 8,185 | |
| Change in Restricted Cash | | | — | | | | — | | | | 2,742 | |
| | | | | | | | | | | | | |
| Net Cash Provided by Operating Activities | | | 14,859 | | | | 24,923 | | | | 54,425 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | |
| Purchase of and Additions to Investment in Real Estate | | | (74,734 | ) | | | (15,799 | ) | | | (33,415 | ) |
| Net Proceeds from Sales of Investment in Real Estate | | | 81,249 | | | | 26,017 | | | | 18,818 | |
| Repayment and Sale of Mortgage Loans Receivable | | | 25,185 | | | | 66,631 | | | | 48,386 | |
| Funding of Mortgage Loan Receivable | | | (22,936 | ) | | | (57,446 | ) | | | — | |
| Change in Restricted Cash | | | (14,636 | ) | | | 21,132 | | | | (21,106 | ) |
| | | | | | | | | | | | | |
| Net Cash (Used in) Provided by Investing Activities | | | (5,872 | ) | | | 40,535 | | | | 12,683 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | |
| Contributions | | | 123,344 | | | | 68,770 | | | | 59,857 | |
| Distributions | | | (132,753 | ) | | | (133,490 | ) | | | (106,459 | ) |
| Repayments on Mortgage Loans Payable | | | (37 | ) | | | (34 | ) | | | (37,511 | ) |
| Proceeds From U.S. Government Securities | | | — | | | | — | | | | 15,832 | |
| | | | | | | | | | | | | |
| Net Cash Used in Financing Activities | | | (9,446 | ) | | | (64,754 | ) | | | (68,281 | ) |
| | | | | | | | | | | | | |
| Net (Decrease) Increase in Cash and Cash Equivalents | | | (459 | ) | | | 704 | | | | (1,173 | ) |
| Cash and Cash Equivalents, Beginning of Period | | | 1,847 | | | | 1,143 | | | | 2,316 | |
| | | | | | | | | | | | | |
| Cash and Cash Equivalents, End of Period | | $ | 1,388 | | | $ | 1,847 | | | $ | 1,143 | |
| | | | | | | | | | | | | |
The accompanying notes are an integral part of the financial statements.
F-54
OTHER REAL ESTATE PARTNERSHIPS
(Dollars in thousands)
| |
| 1. | Organization and Formation of Partnerships |
First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% partnership interest at December 31, 2005. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 13.2% and 13.1% interest in the Operating Partnership at December 31, 2005 and 2004 respectively.
The Operating Partnership owns at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P., First Industrial Securities, L.P., First Industrial Mortgage Partnership, L.P., First Industrial Pennsylvania, L.P., First Industrial Harrisburg, L.P., First Industrial Indianapolis, L.P., TK-SV, LTD. and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”).
The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.
On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 100 industrial properties, containing an aggregate of approximately 9.1 million square feet (unaudited) of GLA.
Profits, losses and distributions of the Other Real Estate Partnerships are allocated to the general partner and the limited partners in accordance with the provisions contained within its restated and amended partnership agreement.
The combined financial statements of the Other Real Estate Partnerships at December 31, 2005 and 2004 and for each of the years ended December 31, 2005, 2004 and 2003 include the accounts and operating results of the Other Real Estate Partnerships on a combined basis.
| |
| 3. | Summary of Significant Accounting Policies |
In order to conform with generally accepted accounting principles, management, in preparation of the Other Real Estate Partnerships’ financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2005 and 2004, and the reported amounts of revenues and expenses for each of the years ended December 31, 2005, 2004 and 2003. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments.
Restricted Cash
At December 31, 2005, restricted cash includes gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Other Real Estate Partnerships exchanges into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.
F-55
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Investment in Real Estate and Depreciation
Investment in Real Estate is carried at cost. The Other Real Estate Partnerships reviews its properties on a quarterly basis for impairment and provides a provision if impairments are found. To determine if an impairment may exist, the Other Real Estate Partnerships reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Other Real Estate Partnerships estimates the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property, on an individual property basis, the Other Real Estate Partnerships will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Other Real Estate Partnerships ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and as a result, the Other Real Estate Partnerships decides not to sell a property previously classified as held for sale, the Other Real Estate Partnerships will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Other Real Estate Partnerships determines fair value of properties that are held for use by discounting the future expected cash flows of the properties. To calculate the fair value of properties held for sale, the Other Real Estate Partnerships deduct from the contract price of the property the estimated costs to close the sale.
Interest costs, real estate taxes, compensation costs of development personnel and other directly related expenses incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, the Other Real Estate Partnerships reclassifies construction in progress to building, tenant improvement and leasing commissions. Such costs begin to be capitalized to the development projects from the point the Other Real Estate Partnerships is undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:
| | | |
| | | Years |
| |
| Buildings and Improvements | | 20 to 50 |
| Land Improvements | | 15 |
| Furniture, Fixtures and Equipment | | 5 to 10 |
The Other Real Estate Partnerships account for all acquisitions entered into subsequent to June 30, 2001 in accordance with FAS 141. Upon acquisition of a property, the Other Real Estate Partnerships allocate the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases and above market and below market leases. The Other Real Estate Partnerships allocate the purchase price to the fair value of the tangible assets of an acquired property determined by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term.
The purchase price is further allocated to in-place lease values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Other Real Estate Partnership’s overall relationship with the respective tenant. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on the Other Real Estate Partnerships’ consolidated statements of operations and comprehensive income. The value of in-place lease
F-56
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
intangibles which is included as a component of Deferred Leasing Intangibles included in total assets, is amortized over the remaining lease term and expected renewal periods in the respective lease as an adjustment to depreciation and other amortization expense and is included in other assets. If a tenant terminates its lease early, the unamortized portion of leasing commissions, tenant improvements, above and below market leases and the in-place lease value is immediately charged to expense.
Deferred Leasing Intangibles included in total assets consist of the following:
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| In-Place Leases | | $ | 6,856 | | | $ | 584 | |
| Less: Accumulated Amortization | | | (407 | ) | | | (16 | ) |
| | | | | | | | | |
| | | $ | 6,449 | | | $ | 568 | |
| | | | | | | | | |
| Above Market Leases | | $ | 1,434 | | | $ | 262 | |
| Less: Accumulated Amortization | | | (224 | ) | | | (73 | ) |
| | | | | | | | | |
| | | $ | 1,210 | | | $ | 189 | |
| | | | | | | | | |
Deferred Leasing Intangibles included in total liabilities consist of the following:
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| Below Market Leases | | $ | 2,652 | | | $ | 315 | |
| Less: Accumulated Amortization | | | (514 | ) | | | (67 | ) |
| | | | | | | | | |
| | | $ | 2,138 | | | $ | 248 | |
| | | | | | | | | |
Deferred Financing Costs
Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs was $24 and $20 at December 31, 2005 and 2004, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.
Revenue Recognition
Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenues in the same period the related expenses are incurred by the Other Real Estate Partnerships.
Revenue is recognized on payments received from tenants for early lease terminations after the Other Real Estate Partnerships determine that all the necessary criteria have been met in accordance with FAS 13 “Accounting for Leases”.
Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.
The Other Real Estate Partnerships provide an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the combined balance sheets are shown net of an allowance for doubtful accounts of $0 and $343 as of December 31, 2005 and 2004, respectively. For accounts receivable the Other Real Estate Partnerships deem uncollectible, the Other Real Estate Partnerships uses the direct write-off method.
F-57
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Gain on Sale of Real Estate
Gain on sale of real estate is recognized using the full accrual method. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Other Real Estate Partnerships after completion of each sale are included in the determination of the gain on sales.
Income Taxes
In accordance with partnership taxation, each of the partners are responsible for reporting their share of taxable income or loss. The Other Real Estate Partnerships are subject to certain state and local income, excise and franchise taxes. The provision for such state and local taxes has been reflected in general and administrative expense in the combined statement of operations and has not been separately stated due to its insignificance.
Fair Value of Financial Instruments
The Other Real Estate Partnerships’ financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses and mortgage loans payable. The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses were not materially different from their carrying or contract values. See Note 4 for the fair value of the mortgage loan payable.
Discontinued Operations
On January 1, 2002, the Other Real Estate Partnerships adopted FAS 144. FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property sold be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Other Real Estate Partnerships as a result of the disposal transaction and (b) the Other Real Estate Partnerships will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be restated and presented in discontinued operations in prior consolidated statements of operations.
Reclassifications
Certain 2004 and 2003 items have been reclassified to conform to the 2005 presentation.
Recent Accounting Pronouncements
In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FAS 153 did not have a material effect on the Other Real Estate Partnerships ’s financial statements.
F-58
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143. A conditional asset retirement obligation refers to a legal obligation to retire assets where the timingand/or method of settlement are conditioned on future events. FIN No. 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The Other Real Estate Partnerships adopted the provisions of FIN 47 in 2005. The adoption of this Interpretation did not have a material impact on the Other Real Estate Partnership’s combined financial position, results of operations or cash flows.
In May, 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements”. FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
In June, 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regardingEITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined inEITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, “Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Other Real Estate Partnerships adoptedEITF 04-05 as of December 31, 2005. The adoption of this EITF did not have a material impact on the Other Real Estate Partnership’s combined financial position, results of operations or cash flows.
| |
| 4. | Mortgage Loans Payable, Net |
On July 16, 1998, the Other Real Estate Partnerships, through TK-SV, LTD., assumed a mortgage loan in the principal amount of $2,566 (the “Acquisition Mortgage Loan V”). The Acquisition Mortgage Loan V is collateralized by one property in Tampa, Florida, bears interest at a fixed rate of 9.01% and provides for monthly principal and interest payments based on a30-year amortization schedule. The Acquisition Mortgage Loan V matures on September 1, 2006. In conjunction with the assumption of the Acquisition Mortgage Loan V, the Other Real Estate Partnerships recorded a premium in the amount of $315 which will be amortized over the remaining life of the Acquisition Mortgage Loan V as an adjustment to interest expense. Including the impact of the premium recorded, the Other Real Estate Partnerships’ effective interest rate on the Acquisition Mortgage Loan V is 6.96%. The Acquisition Mortgage Loan V was paid off and retired on March 1, 2006 (See Note 11).
F-59
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
The following table discloses certain information regarding the Other Real Estate Partnerships’ mortgage loans:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Outstanding Balance at | | Accrued Interest Payable at | | Interest Rate at | | |
| | | December 31,
| | December 31,
| | December 31,
| | December 31,
| | December 31,
| | Maturity
|
Mortgage Loans Payable | | 2005 | | 2004 | | 2005 | | 2004 | | 2005 | | Date |
| |
| Acquisition Mortgage Loan V | | $ | 2,380 | (1) | | $ | 2,456 | (1) | | $ | 18 | | | $ | 18 | | | | 9.010 | % | | 09/01/06 |
| | |
| (1) | | At December 31, 2005 and 2004, the Acquisition Mortgage Loan V is net of an unamortized premium of $24 and $63, respectively. |
The following is a schedule of maturities of the mortgage loan, exclusive of the related premium for the next year ending December 31,:
| | | | | |
| | | Amount | |
| |
| 2006 | | | 2,356 | |
| | | | | |
| Total | | $ | 2,356 | |
| | | | | |
Fair Value:
At December 31, 2005 and 2004, the fair value of the Other Real Estate Partnerships’ mortgage loan payable were as follows:
| | | | | | | | | | | | | | | | | |
| | | December 31, 2005 | | December 31, 2004 |
| | | Carrying
| | Fair
| | Carrying
| | Fair
|
| | | Amount | | Value | | Amount | | Value |
| |
| Mortgage Loan Payable | | $ | 2,380 | | | $ | 2,409 | | | $ | 2,456 | | | $ | 2,590 | |
The fair value of the Other Real Estate Partnerships’ mortgage loan payable was determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
| |
| 5. | Acquisition and Development of Real Estate |
In 2003, the Other Real Estate Partnerships acquired two industrial property comprising approximately .3 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $11,300, excluding costs incurred in conjunction with the acquisition of the properties.
In 2004, the Other Real Estate Partnerships acquired two industrial properties comprising approximately .3 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $9,290, excluding costs incurred in conjunction with the acquisition of the properties.
In 2005, the Other Real Estate Partnerships acquired twelve industrial properties comprising approximately 1.7 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $62,114, excluding costs incurred in conjunction with the acquisition of the properties.
| |
| | Intangible Assets Subject to Amortization in the Period of Acquisition |
The fair value of in-place leases, above market leases, and below market leases recorded as a result of the above acquisitions was $4,272, $1,106, and $2,033, respectively at December 31, 2005. The weighted average life in months of in-place leases, above market leases, and below market leases recorded as a result of 2005 acquisitions was 99, 65 and 13 months, respectively.
F-60
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
| |
| 6. | Sale of Real Estate, Real Estate Held For Sale and Discontinued Operations |
In 2003, the Other Real Estate Partnerships sold nine industrial properties comprising approximately 1.1 million square feet (unaudited) of GLA and several parcels of land. Two of the nine sold industrial properties comprising approximately .7 million square feet of GLA were sold to the December 2001 Joint Venture. Gross proceeds from the sales of the nine industrial properties and several land parcels totaled approximately $36,879. The gain on sale of real estate was approximately $10,887, of which $4,689 is shown in discontinued operations. In accordance with FAS 144, the results of operations and gain on sale of real estate for the seven of the nine sold industrial properties that were not identified as held for sale at December 31, 2001, are included in discontinued operations.
In 2004, the Other Real Estate Partnerships sold seven industrial properties comprising approximately .6 million square feet (unaudited) of GLA and several parcels of land. Gross proceeds from the sales of the seven industrial properties and several land parcels totaled approximately $31,849. The gain on sale of real estate was approximately $8,082, of which $6,439 is shown in discontinued operations. Six of the seven sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the six sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the industrial property and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
In 2005, the Other Real Estate Partnerships sold 14 industrial properties comprising approximately 2.1 million square feet (unaudited) of GLA. Of the 14 industrial properties sold, one industrial property sale was made to a joint venture in which the Operating Partnership owns a 10% equity interest. Gross proceeds from the sales of the 14 industrial properties totaled approximately $94,472. The gain on sale of real estate was approximately $30,076, of which $29,213 is shown in discontinued operations. One of the 14 sold industrial properties did not meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 13 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the industrial property and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
The following table discloses certain information regarding the industrial properties included in discontinued operations by the Other Real Estate Partnerships for the years ended December 31, 2005, 2004 and 2003.
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Total Revenues | | $ | 5,234 | | | $ | 8,173 | | | $ | 20,742 | |
| Operating Expenses | | | (1,733 | ) | | | (2,626 | ) | | | (3,895 | ) |
| Depreciation and Amortization | | | (1,710 | ) | | | (2,133 | ) | | | (2,604 | ) |
| Gain on Sale of Real Estate | | | 29,213 | | | | 6,439 | | | | 4,689 | |
| | | | | | | | | | | | | |
| Income from Discontinued Operations | | $ | 31,004 | | | $ | 9,853 | | | $ | 18,932 | |
| | | | | | | | | | | | | |
In conjunction with certain property sales, the Other Real Estate Partnerships provide seller financing on behalf of certain buyers. At December 31, 2005 and 2004, the Other Real Estate Partnerships had mortgage notes receivable outstanding and accrued interest of approximately $24,118 and $16,336, respectively which is included as a component of prepaid expenses and other assets. Also, in December 2004, the Other Real Estate Partnerships sold $3,249 of its note receivables for par.
F-61
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
| |
| 7. | Supplemental Information to Statements of Cash Flows |
Supplemental disclosure of cash flow information:
| | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Interest paid | | $ | 175 | | | $ | 178 | | | $ | 415 | |
| | | | | | | | | | | | | |
| |
| In conjunction with certain property sales, the Other Real Estate Partnerships provided seller financing on behalf of certain buyers: |
| | | | | | | | | | | | | |
| Notes Receivable | | $ | 11,265 | | | $ | 4,450 | | | $ | 17,170 | |
| | | | | | | | | | | | | |
| |
| 8. | Future Rental Revenues |
The Other Real Estate Partnerships’ properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under noncancelable operating leases in effect as of December 31, 2005 are approximately as follows:
| | | | | |
| 2006 | | $ | 36,295 | |
| 2007 | | | 31,996 | |
| 2009 | | | 25,100 | |
| 2009 | | | 19,163 | |
| 2010 | | | 13,860 | |
| Thereafter | | | 26,358 | |
| | | | | |
| Total | | $ | 152,772 | |
| | | | | |
| |
| 9. | Related Party Transactions |
Periodically, the Other Real Estate Partnerships utilize real estate brokerage services from CB Richard Ellis, Inc., for which a relative of one of the Company’s officers/Directors is an employee. For the year ended December 31, 2003, this relative received brokerage commissions in the amount of $5.
At December 31, 2005 and 2004 the Other Real Estate Partnerships have a receivable balance of $27,055 and $5,506 from wholly owned entities of the Company.
| |
| 10. | Commitments and Contingencies |
In the normal course of business, the Other Real Estate Partnerships are involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the combined financial position, operations or liquidity of the Other Real Estate Partnerships.
Three properties have a lease granting the tenant an option to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price generally in excess of the Other Real Estate Partnerships’ depreciated cost of the asset. The Other Real Estate Partnerships have no notice of any exercise of these tenant purchase options.
During the period January 1, 2006 through March 6, 2006, the Other Real Estate Partnerships acquired two industrial properties for a total estimated investment of approximately $7,267.
On March 1, 2006, the Acquisition Mortgage Loan V was paid off and retired.
F-62
FIRST INDUSTRIAL LP
REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2005
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
Atlanta | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1650 GA Highway 155 | | McDonough, GA | | | | | 788 | | | | 4,544 | | | | 204 | | | | 788 | | | | 4,748 | | | | 5,536 | | | | 1,331 | | | 1991 | | (n) |
| 14101 Industrial Park Boulevard | | Covington, GA | | | | | 285 | | | | 1,658 | | | | 703 | | | | 285 | | | | 2,361 | | | | 2,646 | | | | 581 | | | 1984 | | (n) |
| 801-804 Blacklawn Road | | Conyers, GA | | | | | 361 | | | | 2,095 | | | | 842 | | | | 361 | | | | 2,937 | | | | 3,298 | | | | 807 | | | 1982 | | (n) |
| 1665 Dogwood Drive | | Conyers, GA | | | | | 635 | | | | 3,662 | | | | 78 | | | | 635 | | | | 3,739 | | | | 4,374 | | | | 1,072 | | | 1973 | | (n) |
| 1715 Dogwood Drive | | Conyers, GA | | | | | 288 | | | | 1,675 | | | | 80 | | | | 288 | | | | 1,755 | | | | 2,043 | | | | 493 | | | 1973 | | (n) |
| 11235 Harland Drive | | Covington, GA | | | | | 125 | | | | 739 | | | | 88 | | | | 125 | | | | 827 | | | | 952 | | | | 226 | | | 1988 | | (n) |
| 4050 Southmeadow Parkway | | Atlanta, GA | | | | | 401 | | | | 2,813 | | | | 311 | | | | 425 | | | | 3,100 | | | | 3,525 | | | | 889 | | | 1991 | | (n) |
| 4051 Southmeadow Parkway | | Atlanta, GA | | | | | 726 | | | | 4,130 | | | | 1,084 | | | | 726 | | | | 5,214 | | | | 5,940 | | | | 1,594 | | | 1989 | | (n) |
| 4071 Southmeadow Parkway | | Atlanta, GA | | | | | 750 | | | | 4,460 | | | | 974 | | | | 828 | | | | 5,356 | | | | 6,184 | | | | 1,518 | | | 1991 | | (n) |
| 4081 Southmeadow Parkway | | Atlanta, GA | | | | | 1,012 | | | | 5,918 | | | | 1,586 | | | | 1,157 | | | | 7,359 | | | | 8,516 | | | | 1,842 | | | 1989 | | (n) |
| 370 Great Southwest Parkway(j) | | Atlanta, GA | | | | | 527 | | | | 2,984 | | | | 579 | | | | 546 | | | | 3,544 | | | | 4,089 | | | | 847 | | | 1986 | | (n) |
| 955 Cobb Place | | Kennesaw, GA | | | | | 780 | | | | 4,420 | | | | 417 | | | | 804 | | | | 4,813 | | | | 5,617 | | | | 1,000 | | | 1991 | | (n) |
| 220 Greenwood Court | | McDonough, GA | | | | | 1,700 | | | | — | | | | 9,402 | | | | 1,700 | | | | 9,402 | | | | 11,102 | | | | 943 | | | 2000 | | (n) |
| 1256 Oakbrook Drive | | Norcross, GA | | | | | 336 | | | | 1,907 | | | | 310 | | | | 339 | | | | 2,215 | | | | 2,553 | | | | 286 | | | 1984 | | (n) |
| 1265 Oakbrook Drive | | Norcross, GA | | | | | 307 | | | | 1,742 | | | | 185 | | | | 309 | | | | 1,926 | | | | 2,235 | | | | 209 | | | 1984 | | (n) |
| 1266 Oakbrook Drive | | Norcross, GA | | | | | 234 | | | | 1,326 | | | | 54 | | | | 235 | | | | 1,378 | | | | 1,613 | | | | 152 | | | 1984 | | (n) |
| 1275 Oakbrook Drive | | Norcross, GA | | | | | 400 | | | | 2,269 | | | | 99 | | | | 403 | | | | 2,365 | | | | 2,768 | | | | 260 | | | 1986 | | (n) |
| 1280 Oakbrook Drive | | Norcross, GA | | | | | 281 | | | | 1,592 | | | | 235 | | | | 283 | | | | 1,826 | | | | 2,108 | | | | 225 | | | 1986 | | (n) |
| 1300 Oakbrook Drive | | Norcross, GA | | | | | 420 | | | | 2,381 | | | | 185 | | | | 423 | | | | 2,563 | | | | 2,986 | | | | 274 | | | 1986 | | (n) |
| 1325 Oakbrook Drive | | Norcross, GA | | | | | 332 | | | | 1,879 | | | | 207 | | | | 334 | | | | 2,084 | | | | 2,417 | | | | 238 | | | 1986 | | (n) |
| 1351 Oakbrook Drive | | Norcross, GA | | | | | 370 | | | | 2,099 | | | | 118 | | | | 373 | | | | 2,215 | | | | 2,588 | | | | 252 | | | 1984 | | (n) |
| 1346 Oakbrook Drive | | Norcross, GA | | | | | 740 | | | | 4,192 | | | | 128 | | | | 744 | | | | 4,315 | | | | 5,059 | | | | 484 | | | 1985 | | (n) |
| 1412 Oakbrook Drive | | Norcross, GA | | | | | 313 | | | | 1,776 | | | | 206 | | | | 315 | | | | 1,980 | | | | 2,296 | | | | 227 | | | 1985 | | (n) |
| 7800 The Bluffs | | Austell, GA | | | | | 490 | | | | 2,415 | | | | 447 | | | | 496 | | | | 2,856 | | | | 3,352 | | | | 247 | | | 1995 | | (n) |
| Greenwood Industrial Park | | McDonough, GA | | | | | 1,550 | | | | — | | | | 7,485 | | | | 1,550 | | | | 7,485 | | | | 9,035 | | | | 252 | | | 2003 | | (n) |
S-1
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| | | at Close of Period 12/31/05 | | | Accumulated
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| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
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Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 3060 South Park Blvd | | Ellenwood, GA | | | | | 1,600 | | | | 12,464 | | | | 961 | | | | 1,603 | | | | 13,422 | | | | 15,025 | | | | 1,120 | | | 1992 | | (n) |
| 46 Kent Drive | | Cartersville, GA | | | | | 875 | | | | 2,476 | | | | 13 | | | | 879 | | | | 2,485 | | | | 3,364 | | | | 55 | | | 2001 | | (n) |
| 100 Dorris Williams Industrial — King | | Atlanta, GA | | (i) | | | 401 | | | | 3,754 | | | | 42 | | | | 406 | | | | 3,791 | | | | 4,197 | | | | 127 | | | 2000 | | (n) |
| 605 Stonehill Diver | | Atlanta, GA | | | | | 485 | | | | 1,979 | | | | 24 | | | | 490 | | | | 1,998 | | | | 2,488 | | | | 93 | | | 1970 | | (n) |
| 6514 Warren Drive | | Norcross, GA | | | | | 510 | | | | 1,250 | | | | 9 | | | | 513 | | | | 1,256 | | | | 1,769 | | | | 58 | | | 1999 | | (n) |
| 6544 Warren Drive(q) | | Norcross, GA | | | | | 711 | | | | 2,310 | | | | 16 | | | | 715 | | | | 2,322 | | | | 3,037 | | | | 58 | | | 1999 | | (n) |
| 720 Industrial Boulevard | | Dublin, GA | | | | | 250 | | | | 2,632 | | | | 18 | | | | 252 | | | | 2,648 | | | | 2,900 | | | | 56 | | | 1973/2000 | | (n) |
| 5356 East Ponce DeLeon | | One Mountain, GA | | | | | 604 | | | | 3,888 | | | | 20 | | | | 607 | | | | 3,905 | | | | 4,512 | | | | 25 | | | 1982 | | (n) |
| 5390 East Ponce DeLeon | | One Mountain, GA | | | | | 397 | | | | 1,791 | | | | 11 | | | | 399 | | | | 1,800 | | | | 2,199 | | | | 11 | | | 1982 | | (n) |
| 195 & 197 Collins Boulevard | | Athens, GA | | | | | 1,410 | | | | 5,344 | | | | 37 | | | | 1,419 | | | | 5,372 | | | | 6,791 | | | | 107 | | | 1969/1984 | | (n) |
| 4349 Avery Drive | | Gainsville, GA | | | | | 1,862 | | | | 4,322 | | | | 34 | | | | 1,873 | | | | 4,344 | | | | 6,218 | | | | 75 | | | 1977 | | (n) |
Baltimore | | | | | | | | | | | | | | | | | | | | | | | | | �� | | | | | | | | | | | |
| 3431 Benson | | Baltimore, MD | | | | | 553 | | | | 3,062 | | | | 317 | | | | 562 | | | | 3,370 | | | | 3,932 | | | | 667 | | | 1988 | | (n) |
| 1820 Portal | | Baltimore, MD | | (f) | | | 884 | | | | 4,891 | | | | 455 | | | | 899 | | | | 5,330 | | | | 6,230 | | | | 1,018 | | | 1982 | | (n) |
| 8900 Yellow Brick Road | | Baltimore, MD | | | | | 447 | | | | 2,473 | | | | 372 | | | | 475 | | | | 2,817 | | | | 3,292 | | | | 550 | | | 1982 | | (n) |
| 7476 New Ridge | | Hanover, MD | | | | | 394 | | | | 2,182 | | | | 385 | | | | 401 | | | | 2,560 | | | | 2,961 | | | | 471 | | | 1987 | | (n) |
| 504 Advantage Way | | Aberdeen, MD | | | | | 2,799 | | | | 15,864 | | | | 813 | | | | 2,802 | | | | 16,674 | | | | 19,476 | | | | 1,154 | | | 1987/92 | | (n) |
| 9700 Martin Luther King Hwy | | Lanham, MD | | | | | 700 | | | | 1,920 | | | | 720 | | | | 700 | | | | 2,640 | | | | 3,340 | | | | 276 | | | 1980 | | (n) |
| 9730 Martin Luther King Hwy | | Lanham, MD | | | | | 500 | | | | 955 | | | | 678 | | | | 500 | | | | 1,633 | | | | 2,133 | | | | 146 | | | 1980 | | (n) |
| 4600 Boston Way | | Lanham, MD | | | | | 1,400 | | | | 2,482 | | | | 217 | | | | 1,400 | | | | 2,699 | | | | 4,099 | | | | 242 | | | 1980 | | (n) |
| 4621 Boston Way | | Lanham, MD | | | | | 1,100 | | | | 3,070 | | | | 369 | | | | 1,100 | | | | 3,439 | | | | 4,539 | | | | 286 | | | 1980 | | (n) |
| 4720 Boston Way | | Lanham, MD | | | | | 1,200 | | | | 2,174 | | | | 930 | | | | 1,200 | | | | 3,104 | | | | 4,304 | | | | 321 | | | 1979 | | (n) |
| 2250 Randolph Drive | | Dulles, VA | | | | | 3,200 | | | | 8,187 | | | | 36 | | | | 3,208 | | | | 8,215 | | | | 11,423 | | | | 363 | | | 1999 | | (n) |
| 22630 Dulles Summit Court | | Dulles, VA | | | | | 2,200 | | | | 9,346 | | | | 127 | | | | 2,206 | | | | 9,467 | | | | 11,673 | | | | 397 | | | 1998 | | (n) |
| 4201 Forbes Boulevard(q) | | Lanham, MD | | | | | 356 | | | | 1,823 | | | | 191 | | | | 375 | | | | 1,995 | | | | 2,370 | | | | 49 | | | 1989 | | (n) |
4370-4383 Lottsford Vista Road | | Lanham, MD | | | | | 279 | | | | 1,358 | | | | 68 | | | | 296 | | | | 1,408 | | | | 1,705 | | | | 45 | | | 1989 | | (n) |
| 4400 Lottsford Vista Road | | Lanham, MD | | | | | 351 | | | | 1,955 | | | | 108 | | | | 372 | | | | 2,042 | | | | 2,414 | | | | 54 | | | 1989 | | (n) |
| 4420 Lottsford Vista Road | | Lanham, MD | | | | | 539 | | | | 2,196 | | | | 118 | | | | 568 | | | | 2,285 | | | | 2,853 | | | | 66 | | | 1989 | | (n) |
| 11204 McCormick Road | | Hunt Valley, MD | | | | | 1,017 | | | | 3,132 | | | | 81 | | | | 1,038 | | | | 3,192 | | | | 4,230 | | | | 18 | | | 1962 | | (n) |
| 11110 Pepper Road(q) | | Hunt Valley, MD | | | | | 918 | | | | 2,529 | | | | 68 | | | | 938 | | | | 2,577 | | | | 3,515 | | | | 12 | | | 1964 | | (n) |
| 11100 Gilroy Road | | Hunt Valley, MD | | | | | 901 | | | | 1,455 | | | | 43 | | | | 919 | | | | 1,480 | | | | 2,399 | | | | 8 | | | 1972 | | (n) |
S-2
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| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 336 Clubhouse(q) | | Hunt Valley, MD | | | | | 982 | | | | 3,158 | | | | 82 | | | | 1,004 | | | | 3,218 | | | | 4,222 | | | | 18 | | | 1976 | | (n) |
| 10709 Gilroy Road | | Hunt Valley, MD | | | | | 907 | | | | 2,884 | | | | (173 | ) | | | 913 | | | | 2,705 | | | | 3,618 | | | | 15 | | | 1978 | | (n) |
| 10947 Golden West | | Hunt Valley, MD | | | | | 1,134 | | | | 3,436 | | | | 64 | | | | 1,135 | | | | 3,499 | | | | 4,634 | | | | 13 | | | 1983 | | (n) |
7120-7132 Ambassador Road | | Hunt Valley, MD | | | | | 829 | | | | 1,329 | | | | 15 | | | | 847 | | | | 1,326 | | | | 2,173 | | | | 9 | | | 1970 | | (n) |
| 7142 Ambassador Road(q) | | Hunt Valley, MD | | | | | 924 | | | | 2,876 | | | | 71 | | | | 942 | | | | 2,929 | | | | 3,871 | | | | 9 | | | 1973 | | (n) |
7144-7160 Ambassador Road | | Hunt Valley, MD | | | | | 979 | | | | 1,672 | | | | 67 | | | | 1,000 | | | | 1,718 | | | | 2,718 | | | | 14 | | | 1974 | | (n) |
| 7200 Rutherford(q) | | Hunt Valley, MD | | | | | 1,032 | | | | 2,150 | | | | 62 | | | | 1,054 | | | | 2,190 | | | | 3,244 | | | | 17 | | | 1978 | | (n) |
| 2700 Lord Baltimore(q) | | Hunt Valley, MD | | | | | 875 | | | | 1,826 | | | | (58 | ) | | | 897 | | | | 1,746 | | | | 2,643 | | | | 13 | | | 1978 | | (n) |
| 9800 Martin Luther King Hwy | | Lanham, MD | | | | | 1,200 | | | | 2,457 | | | | 543 | | | | 1,200 | | | | 3,000 | | | | 4,200 | | | | 258 | | | 1978 | | (n) |
| 4501 Hollins Ferry Road | | Baltimore, MD | | | | | 3,000 | | | | 10,108 | | | | 929 | | | | 3,058 | | | | 10,979 | | | | 14,037 | | | | 509 | | | 1982/92 | | (n) |
| 11212 McCormick Road(q) | | Hunt Valley, MD | | | | | 776 | | | | 623 | | | | 37 | | | | 798 | | | | 638 | | | | 1,436 | | | | 6 | | | 1961/1973 | | (n) |
Central Pennsylvania | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 16522 Hunters Green Parkway | | Hagerstown, MD | | (g) | | | 1,390 | | | | 13,104 | | | | 3,902 | | | | 1,863 | | | | 16,534 | | | | 18,396 | | | | 1,088 | | | 2000 | | (n) |
| Golden Eagle Business Center | | Harrisburg, PA | | | | | 585 | | | | 3,176 | | | | 83 | | | | 600 | | | | 3,245 | | | | 3,844 | | | | 57 | | | 2000 | | (n) |
| 270 Old Silver Spring Road | | Mechanicsburg, PA | | | | | 350 | | | | — | | | | 3,649 | | | | 350 | | | | 3,649 | | | | 3,999 | | | | 332 | | | 2001 | | (n) |
| 37 Valleyview Business Park | | Jessup, PA | | | | | 542 | | | | — | | | | 2,971 | | | | 542 | | | | 2,972 | | | | 3,513 | | | | 77 | | | 2004 | | (n) |
| 170 Marcel Drive(q) | | Winchester, VA | | | | | 1,544 | | | | 5,463 | | | | 266 | | | | 1,544 | | | | 5,730 | | | | 7,273 | | | | — | | | 1997 | | (n) |
| 320 Museum Road | | Washington, PA | | | | | 201 | | | | 1,819 | | | | 33 | | | | 205 | | | | 1,849 | | | | 2,053 | | | | 18 | | | 1967/75 | | (n) |
Chicago | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3600 West Pratt Avenue | | Lincolnwood, IL | | | | | 1,050 | | | | 5,767 | | | | 1,238 | | | | 1,050 | | | | 7,005 | | | | 8,055 | | | | 2,021 | | | 1953/88 | | (n) |
| 6750 South Sayre Avenue | | Bedford Park, IL | | | | | 224 | | | | 1,309 | | | | 433 | | | | 224 | | | | 1,742 | | | | 1,966 | | | | 441 | | | 1975 | | (n) |
| 585 Slawin Court | | Mount Prospect, IL | | | | | 611 | | | | 3,505 | | | | 183 | | | | 611 | | | | 3,688 | | | | 4,300 | | | | 1,021 | | | 1992 | | (n) |
| 2300 Windsor Court | | Addison, IL | | | | | 688 | | | | 3,943 | | | | 504 | | | | 696 | | | | 4,439 | | | | 5,135 | | | | 1,344 | | | 1986 | | (n) |
| 3505 Thayer Court | | Aurora, IL | | | | | 430 | | | | 2,472 | | | | 35 | | | | 430 | | | | 2,507 | | | | 2,938 | | | | 717 | | | 1989 | | (n) |
| 305-311 Era Drive | | Northbrook, IL | | | | | 200 | | | | 1,154 | | | | 146 | | | | 205 | | | | 1,296 | | | | 1,501 | | | | 361 | | | 1978 | | (n) |
| 4330 South Racine Avenue | | Chicago, IL | | | | | 448 | | | | 1,893 | | | | 550 | | | | 468 | | | | 2,424 | | | | 2,891 | | | | 1,872 | | | 1978 | | (n) |
| 12241 Melrose Street | | Franklin Park, IL | | | | | 332 | | | | 1,931 | | | | 1,826 | | | | 469 | | | | 3,620 | | | | 4,089 | | | | 1,091 | | | 1969 | | (n) |
| 11939 S Central Avenue | | Alsip, IL | | | | | 1,208 | | | | 6,843 | | | | 2,155 | | | | 1,305 | | | | 8,900 | | | | 10,205 | | | | 1,829 | | | 1972 | | (n) |
| 405 East Shawmut | | LaGrange, IL | | | | | 368 | | | | 2,083 | | | | 365 | | | | 387 | | | | 2,428 | | | | 2,815 | | | | 486 | | | 1965 | | (n) |
| 1010-50 Sesame Street | | Bensenville, IL | | | | | 979 | | | | 5,546 | | | | 2,285 | | | | 1,048 | | | | 7,761 | | | | 8,810 | | | | 1,305 | | | 1976 | | (n) |
| 7401 South Pulaski | | Chicago, IL | | | | | 664 | | | | 3,763 | | | | 1,215 | | | | 669 | | | | 4,974 | | | | 5,643 | | | | 1,024 | | | 1975/86 | | (n) |
| 7501 S. Pulaski | | Chicago, IL | | | | | 318 | | | | 2,038 | | | | 738 | | | | 318 | | | | 2,777 | | | | 3,094 | | | | 514 | | | 1975/86 | | (n) |
| 385 Fenton Lane | | West Chicago, IL | | | | | 868 | | | | 4,918 | | | | 567 | | | | 884 | | | | 5,468 | | | | 6,352 | | | | 1,263 | | | 1990 | | (n) |
S-3
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| | | | | | | | | | | | | Subsequent to
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| | | Gross Amount Carried
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| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 905 Paramount | | Batavia, IL | | | | | 243 | | | | 1,375 | | | | 391 | | | | 252 | | | | 1,757 | | | | 2,009 | | | | 355 | | | 1977 | | (n) |
| 1005 Paramount | | Batavia, IL | | | | | 282 | | | | 1,600 | | | | 454 | | | | 293 | | | | 2,043 | | | | 2,336 | | | | 401 | | | 1978 | | (n) |
| 2120-24 Roberts | | Broadview, IL | | | | | 220 | | | | 1,248 | | | | 369 | | | | 231 | | | | 1,607 | | | | 1,838 | | | | 391 | | | 1960 | | (n) |
| 700 Business Center Drive | | Mount Prospect, IL | | | | | 270 | | | | 1,492 | | | | 120 | | | | 288 | | | | 1,594 | | | | 1,882 | | | | 202 | | | 1980 | | (n) |
| 800 Business Center Drive | | Mount Prospect, IL | | | | | 631 | | | | 3,493 | | | | 233 | | | | 666 | | | | 3,691 | | | | 4,358 | | | | 468 | | | 1988/99 | | (n) |
| 580 Slawin Court | | Mount Prospect, IL | | | | | 233 | | | | 1,292 | | | | 234 | | | | 254 | | | | 1,505 | | | | 1,760 | | | | 180 | | | 1985 | | (n) |
| 1150 Feehanville Drive | | Mount Prospect, IL | | | | | 260 | | | | 1,437 | | | | 131 | | | | 273 | | | | 1,555 | | | | 1,829 | | | | 203 | | | 1983 | | (n) |
| 1200 Business Center D rive | | Mount Prospect, IL | | | | | 765 | | | | 4,237 | | | | 335 | | | | 814 | | | | 4,524 | | | | 5,338 | | | | 576 | | | 1988/2000 | | (n) |
| 1331 Business Center Drive | | Mount Prospect, IL | | | | | 235 | | | | 1,303 | | | | 136 | | | | 255 | | | | 1,419 | | | | 1,674 | | | | 181 | | | 1985 | | (n) |
| 19W661 101st Street | | Lemont, IL | | | | | 1,200 | | | | 6,643 | | | | 1,400 | | | | 1,220 | | | �� | 8,023 | | | | 9,242 | | | | 844 | | | 1988 | | (n) |
| 175 Wall Street | | Glendale Heights, IL | | | | | 427 | | | | 2,363 | | | | 191 | | | | 433 | | | | 2,548 | | | | 2,981 | | | | 236 | | | 1990 | | (n) |
| 800-820 Thorndale Avenue | | Bensenville, IL | | | | | 751 | | | | 4,159 | | | | 109 | | | | 761 | | | | 4,258 | | | | 5,019 | | | | 326 | | | 1985 | | (n) |
| 830-890 Supreme Drive | | Bensenville, IL | | | | | 671 | | | | 3,714 | | | | 247 | | | | 679 | | | | 3,953 | | | | 4,632 | | | | 406 | | | 1981 | | (n) |
| 1661 Feehanville Drive | | Mount Prospect, IL | | | | | 985 | | | | 5,455 | | | | 1,134 | | | | 1,044 | | | | 6,530 | | | | 7,574 | | | | 845 | | | 1986 | | (n) |
| 2250 Arthur Avenue | | Elk Grove Village, IL | | | | | 800 | | | | 1,543 | | | | 41 | | | | 809 | | | | 1,576 | | | | 2,384 | | | | 208 | | | 1973/86 | | (n) |
1850 Touhy & 1158-60
McCage Ave | | Elk Grove Village, IL | | | | | 1,500 | | | | 4,842 | | | | 57 | | | | 1,514 | | | | 4,885 | | | | 6,399 | | | | 351 | | | 1978 | | (n) |
1088-1130 Thorndale Avenue(q) | | Bensenville, IL | | | | | 2,103 | | | | 3,674 | | | | 12 | | | | 2,108 | | | | 3,681 | | | | 5,789 | | | | 93 | | | 1983 | | (n) |
| 855-891 Busse(Route 83) | | Bensenville, IL | | | | | 1,597 | | | | 2,767 | | | | 11 | | | | 1,601 | | | | 2,774 | | | | 4,375 | | | | 72 | | | 1983 | | (n) |
1060-1074 W. Thorndale Ave.(q) | | Bensenville, IL | | | | | 1,704 | | | | 2,108 | | | | 31 | | | | 1,709 | | | | 2,134 | | | | 3,843 | | | | 61 | | | 1982 | | (n) |
| 400 Crossroads Parkway | | Bolingbrook, IL | | | | | 1,178 | | | | 9,453 | | | | 26 | | | | 1,181 | | | | 9,476 | | | | 10,657 | | | | 159 | | | 1988 | | (n) |
| 7609 West Industrial Drive(q) | | Forest Park, IL | | | | | 1,207 | | | | 2,343 | | | | 161 | | | | 1,213 | | | | 2,497 | | | | 3,711 | | | | 69 | | | 1974 | | (n) |
| 7801 West Industrial Drive | | Forest Park, IL | | | | | 1,215 | | | | 3,020 | | | | 19 | | | | 1,220 | | | | 3,034 | | | | 4,254 | | | | 74 | | | 1976 | | (n) |
| 501 Airport Road(q) | | Aurora, IL | | | | | 694 | | | | — | | | | 5,256 | | | | 694 | | | | 5,256 | | | | 5,950 | | | | 415 | | | 2002 | | (n) |
| 251 Airport Road(q) | | Aurora, IL | | | | | 983 | | | | — | | | | 6,653 | | | | 983 | | | | 6,654 | | | | 7,636 | | | | 657 | | | 2002 | | (n) |
1900-1960 Devon Avenue(q) | | Elk Grove Village, IL | | | | | 1,154 | | | | 2,552 | | | | 195 | | | | 1,167 | | | | 2,734 | | | | 3,901 | | | | 124 | | | 1979 | | (n) |
| 3686 South Central | | Rockford, IL | | | | | 200 | | | | 2,520 | | | | 11 | | | | 200 | | | | 2,531 | | | | 2,731 | | | | 72 | | | 1998 | | (n) |
| 749 Southrock | | Rockford, IL | | | | | 379 | | | | 2,814 | | | | 13 | | | | 380 | | | | 2,825 | | | | 3,206 | | | | 105 | | | 1992 | | (n) |
| 725 Kimberly Drive | | Carol Stream, IL | | | | | 793 | | | | 1,395 | | | | 10 | | | | 801 | | | | 1,397 | | | | 2,198 | | | | 23 | | | 1987 | | (n) |
| 2802 Bloomington Road | | Champaign, IL | | | | | 1,002 | | | | 7,544 | | | | 45 | | | | 1,007 | | | | 7,583 | | | | 8,591 | | | | 47 | | | 1996 | | (n) |
| 17001 S. Vincennes | | Thornton, IL | | | | | 497 | | | | 504 | | | �� | 6 | | | | 500 | | | | 507 | | | | 1,007 | | | | 9 | | | 1974 | | (n) |
S-4
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| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
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| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
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Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
Cincinnati | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
9900-9970 Princeton | | Cincinnati, OH | | | | | 545 | | | | 3,088 | | | | 1,709 | | | | 566 | | | | 4,775 | | | | 5,342 | | | | 1,315 | | | 1970 | | (n) |
| 2940 Highland Avenue | | Cincinnati, OH | | | | | 1,717 | | | | 9,730 | | | | 2,258 | | | | 1,772 | | | | 11,933 | | | | 13,705 | | | | 3,151 | | | 1969/74 | | (n) |
4700-4750 Creek Road | | Blue Ash, OH | | | | | 1,080 | | | | 6,118 | | | | 772 | | | | 1,109 | | | | 6,860 | | | | 7,970 | | | | 1,788 | | | 1960 | | (n) |
| 12072 Best Place | | Springboro, OH | | | | | 426 | | | | — | | | | 3,177 | | | | 443 | | | | 3,160 | | | | 3,604 | | | | 610 | | | 1984 | | (n) |
| 901 Pleasant Valley Drive | | Springboro, OH | | | | | 304 | | | | 1,721 | | | | 166 | | | | 316 | | | | 1,875 | | | | 2,191 | | | | 370 | | | 1984/94 | | (n) |
| 4440 Mulhauser Road | | Cincinnati, OH | | | | | 655 | | | | 39 | | | | 5,741 | | | | 655 | | | | 5,780 | | | | 6,435 | | | | 1,197 | | | 1999 | | (n) |
| 4434 Mulhauser Road | | Cincinnati, OH | | | | | 444 | | | | 16 | | | | 4,684 | | | | 463 | | | | 4,681 | | | | 5,144 | | | | 764 | | | 1999 | | (n) |
| 9449 Glades Drive | | Hamilton, OH | | | | | 465 | | | | — | | | | 4,080 | | | | 477 | | | | 4,068 | | | | 4,545 | | | | 581 | | | 1999 | | (n) |
| 420 Wards Corner Road | | Loveland, OH | | | | | 600 | | | | 1,083 | | | | 1,010 | | | | 606 | | | | 2,087 | | | | 2,693 | | | | 324 | | | 1985 | | (n) |
| 422 Wards Corner Road | | Loveland, OH | | | | | 600 | | | | 1,811 | | | | 451 | | | | 605 | | | | 2,256 | | | | 2,862 | | | | 354 | | | 1985 | | (n) |
| 4436 Muhlhauser Road | | Hamilton, OH | | | | | 630 | | | | — | | | | 5,663 | | | | 630 | | | | 5,664 | | | | 6,293 | | | | 607 | | | 2001 | | (n) |
| 4438 Muhlhauser Road | | Hamilton, OH | | | | | 779 | | | | — | | | | 6,823 | | | | 779 | | | | 6,823 | | | | 7,602 | | | | 680 | | | 2000 | | (n) |
| 9200 Brookfield Court(q) | | Florence, KY | | | | | 578 | | | | 3,551 | | | | 72 | | | | 582 | | | | 3,619 | | | | 4,201 | | | | 120 | | | 1996 | | (n) |
| 4663 Dues Drive(q) | | West Chester, OH | | | | | 858 | | | | 2,273 | | | | 204 | | | | 875 | | | | 2,460 | | | | 3,335 | | | | 130 | | | 1972 | | (n) |
| 7401 Fremont Pike #1 | | Perrysburg, OH | | | | | 291 | | | | 1,130 | | | | 26 | | | | 296 | | | | 1,151 | | | | 1,447 | | | | 7 | | | 1955/70 | | (n) |
| 7401 Fremont Pike #2 | | Perrysburg, OH | | | | | 280 | | | | 1,088 | | | | 25 | | | | 285 | | | | 1,108 | | | | 1,393 | | | | 7 | | | 1980 | | (n) |
| 7401 Fremont Pike #3 | | Perrysburg, OH | | | | | 334 | | | | 1,300 | | | | 30 | | | | 340 | | | | 1,324 | | | | 1,664 | | | | 8 | | | 1984 | | (n) |
| 7401 Fremont Pike #4 | | Perrysburg, OH | | | | | 502 | | | | 1,952 | | | | 44 | | | | 511 | | | | 1,987 | | | | 2,498 | | | | 13 | | | 1985 | | (n) |
| 7401 Fremont Pike #5 | | Perrysburg, OH | | | | | 340 | | | | 1,323 | | | | 31 | | | | 346 | | | | 1,347 | | | | 1,694 | | | | 8 | | | 1990 | | (n) |
| 7401 Fremont Pike #6 | | Perrysburg, OH | | | | | 340 | | | | 1,323 | | | | 31 | | | | 346 | | | | 1,347 | | | | 1,694 | | | | 8 | | | 1990 | | (n) |
| 7401 Fremont Pike #7 | | Perrysburg, OH | | | | | 357 | | | | 1,389 | | | | 33 | | | | 364 | | | | 1,415 | | | | 1,779 | | | | 9 | | | 1991 | | (n) |
| 7401 Fremont Pike #8 | | Perrysburg, OH | | | | | 704 | | | | 2,739 | | | | 64 | | | | 717 | | | | 2,789 | | | | 3,507 | | | | 18 | | | 1993 | | (n) |
| 7401 Fremont Pike #9 | | Perrysburg, OH | | | | | 18 | | | | 68 | | | | 2 | | | | 18 | | | | 70 | | | | 88 | | | | 0 | | | 1998 | | (n) |
| 7401 Fremont Pike #10 | | Perrysburg, OH | | | | | 38 | | | | 149 | | | | 4 | | | | 39 | | | | 152 | | | | 191 | | | | 1 | | | 1951 | | (n) |
Cleveland | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 Allen Bradley Drive | | Mayfield Heights, OH | | | | | 3,034 | | | | 48,475 | | | | 269 | | | | 3,051 | | | | 48,726 | | | | 51,778 | | | | 276 | | | 1995 | | (n) |
Columbus | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3800 Lockbourne Industrial Pkwy | | Columbus, OH | | | | | 1,045 | | | | 6,421 | | | | 14 | | | | 1,045 | | | | 6,435 | | | | 7,480 | | | | 1,529 | | | 1986 | | (n) |
| 3880 Groveport Road | | Columbus, OH | | | | | 1,955 | | | | 12,154 | | | | 600 | | | | 1,955 | | | | 12,755 | | | | 14,709 | | | | 3,087 | | | 1986 | | (n) |
| 1819 North Walcutt Road | | Columbus, OH | | | | | 637 | | | | 4,590 | | | | (296 | ) | | | 637 | | | | 4,294 | | | | 4,931 | | | | 1,105 | | | 1973 | | (n) |
| 4300 Cemetary Road(q) | | Hillard, OH | | | | | 764 | | | | 6,248 | | | | (1,424 | ) | | | 764 | | | | 4,823 | | | | 5,588 | | | | 1,133 | | | 1968/74 | | (n) |
S-5
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| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 4115 Leap Road(j) | | Hillard, OH | | | | | 756 | | | | 4,297 | | | | 495 | | | | 756 | | | | 4,781 | | | | 5,537 | | | | 892 | | | 1977 | | (n) |
| 3300 Lockbourne | | Columbus, OH | | | | | 708 | | | | 3,920 | | | | 1,241 | | | | 710 | | | | 5,159 | | | | 5,869 | | | | 1,075 | | | 1964 | | (n) |
| 1076 Pittsburgh Drive | | Delaware, OH | | | | | 2,497 | | | | 5,103 | | | | 22 | | | | 2,505 | | | | 5,117 | | | | 7,622 | | | | 157 | | | 1996 | | (n) |
| 6150 Huntley Road | | Columbus, OH | | | | | 986 | | | | 5,162 | | | | 16 | | | | 989 | | | | 5,175 | | | | 6,164 | | | | 101 | | | 2002 | | (n) |
Dallas/Fort Worth | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
1275-1281 Roundtable Drive | | Dallas, TX | | | | | 117 | | | | 839 | | | | 53 | | | | 117 | | | | 892 | | | | 1,009 | | | | 184 | | | 1966 | | (n) |
2406-2416 Walnut Ridge | | Dallas, TX | | | | | 178 | | | | 1,006 | | | | 290 | | | | 183 | | | | 1,291 | | | | 1,474 | | | | 278 | | | 1978 | | (n) |
| 12750 Perimeter Drive | | Dallas, TX | | | | | 638 | | | | 3,618 | | | | 635 | | | | 660 | | | | 4,232 | | | | 4,892 | | | | 805 | | | 1979 | | (n) |
1324-1343 Roundtable Drive | | Dallas, TX | | | | | 178 | | | | 1,006 | | | | 227 | | | | 184 | | | | 1,227 | | | | 1,411 | | | | 240 | | | 1972 | | (n) |
2401-2419 Walnut Ridge | | Dallas, TX | | | | | 148 | | | | 839 | | | | 119 | | | | 153 | | | | 953 | | | | 1,106 | | | | 201 | | | 1978 | | (n) |
4248-4252 Simonton | | Farmers Ranch, TX | | | | | 888 | | | | 5,032 | | | | 412 | | | | 920 | | | | 5,412 | | | | 6,332 | | | | 1,169 | | | 1973 | | (n) |
| 900-906 Great Southwest Pkwy | | Arlington, TX | | | | | 237 | | | | 1,342 | | | | 596 | | | | 270 | | | | 1,905 | | | | 2,175 | | | | 368 | | | 1972 | | (n) |
| 2179 Shiloh Road | | Garland, TX | | | | | 251 | | | | 1,424 | | | | 68 | | | | 256 | | | | 1,486 | | | | 1,742 | | | | 299 | | | 1982 | | (n) |
| 2159 Shiloh Road | | Garland, TX | | | | | 108 | | | | 610 | | | | 40 | | | | 110 | | | | 648 | | | | 758 | | | | 130 | | | 1982 | | (n) |
| 2701 Shiloh Road | | Garland, TX | | | | | 818 | | | | 4,636 | | | | 1,209 | | | | 923 | | | | 5,740 | | | | 6,663 | | | | 1,275 | | | 1981 | | (n) |
| 12784 Perimeter Drive(k) | | Dallas, TX | | | | | 350 | | | | 1,986 | | | | 461 | | | | 396 | | | | 2,401 | | | | 2,797 | | | | 494 | | | 1981 | | (n) |
| 3000 West Commerce | | Dallas, TX | | | | | 456 | | | | 2,584 | | | | 530 | | | | 469 | | | | 3,101 | | | | 3,570 | | | | 599 | | | 1980 | | (n) |
| 3030 Hansboro | | Dallas, TX | | | | | 266 | | | | 1,510 | | | | 385 | | | | 276 | | | | 1,885 | | | | 2,161 | | | | 382 | | | 1971 | | (n) |
| 5222 Cockrell Hill | | Dallas, TX | | | | | 296 | | | | 1,677 | | | | 389 | | | | 306 | | | | 2,056 | | | | 2,363 | | | | 390 | | | 1973 | | (n) |
| 405-407 113th | | Arlington, TX | | | | | 181 | | | | 1,026 | | | | 431 | | | | 185 | | | | 1,452 | | | | 1,637 | | | | 264 | | | 1969 | | (n) |
| 816 111th Street | | Arlington, TX | | | | | 251 | | | | 1,421 | | | | 224 | | | | 258 | | | | 1,638 | | | | 1,896 | | | | 330 | | | 1972 | | (n) |
| 7341 Dogwood Park | | Richland Hills, TX | | | | | 79 | | | | 435 | | | | 219 | | | | 84 | | | | 649 | | | | 732 | | | | 152 | | | 1973 | | (n) |
| 7427 Dogwood Park | | Richland Hills, TX | | | | | 96 | | | | 532 | | | | 556 | | | | 102 | | | | 1,083 | | | | 1,185 | | | | 142 | | | 1973 | | (n) |
| 7348-54 Tower Street | | Richland Hills, TX | | | | | 88 | | | | 489 | | | | 196 | | | | 94 | | | | 679 | | | | 773 | | | | 120 | | | 1978 | | (n) |
| 7370 Dogwood Park | | Richland Hills, TX | | | | | 91 | | | | 503 | | | | 97 | | | | 96 | | | | 594 | | | | 691 | | | | 122 | | | 1987 | | (n) |
| 7339-41 Tower Street | | Richland Hills, TX | | | | | 98 | | | | 541 | | | | 66 | | | | 104 | | | | 601 | | | | 705 | | | | 109 | | | 1980 | | (n) |
| 7437-45 Tower Street | | Richland Hills, TX | | | | | 102 | | | | 563 | | | | 79 | | | | 108 | | | | 635 | | | | 743 | | | | 124 | | | 1977 | | (n) |
| 7331-59 Airport Freeway | | Richland Hills, TX | | | | | 354 | | | | 1,958 | | | | 363 | | | | 372 | | | | 2,303 | | | | 2,675 | | | | 411 | | | 1987 | | (n) |
| 7338-60 Dogwood Park | | Richland Hills, TX | | | | | 106 | | | | 587 | | | | 102 | | | | 112 | | | | 683 | | | | 796 | | | | 127 | | | 1978 | | (n) |
| 7450-70 Dogwood Park | | Richland Hills, TX | | | | | 106 | | | | 584 | | | | 125 | | | | 112 | | | | 703 | | | | 815 | | | | 140 | | | 1985 | | (n) |
| 7423-49 Airport Freeway | | Richland Hills, TX | | | | | 293 | | | | 1,621 | | | | 334 | | | | 308 | | | | 1,940 | | | | 2,248 | | | | 421 | | | 1985 | | (n) |
| 7400 Whitehall Street | | Richland Hills, TX | | | | | 109 | | | | 603 | | | | 91 | | | | 115 | | | | 688 | | | | 804 | | | | 126 | | | 1994 | | (n) |
1602-1654 Terre Colony | | Dallas, TX | | | | | 458 | | | | 2,596 | | | | 230 | | | | 468 | | | | 2,816 | | | | 3,284 | | | | 467 | | | 1981 | | (n) |
S-6
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| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 3330 Duncanville Road | | Dallas, TX | | | | | 197 | | | | 1,114 | | | | 28 | | | | 199 | | | | 1,139 | | | | 1,338 | | | | 158 | | | 1987 | | (n) |
6851-6909 Snowden Road | | Fort Worth, TX | | | | | 1,025 | | | | 5,810 | | | | 483 | | | | 1,038 | | | | 6,280 | | | | 7,318 | | | | 905 | | | 1985/86 | | (n) |
2351-2355 Merritt Drive | | Garland, TX | | | | | 101 | | | | 574 | | | | 125 | | | | 103 | | | | 698 | | | | 800 | | | | 118 | | | 1986 | | (n) |
| 10575 Vista Park | | Dallas, TX | | | | | 366 | | | | 2,074 | | | | 214 | | | | 371 | | | | 2,283 | | | | 2,654 | | | | 322 | | | 1988 | | (n) |
| 701-735 North Plano Road | | Richardson, TX | | | | | 696 | | | | 3,944 | | | | 118 | | | | 705 | | | | 4,053 | | | | 4,758 | | | | 576 | | | 1972/94 | | (n) |
| 2259 Merritt Drive | | Garland, TX | | | | | 96 | | | | 544 | | | | 45 | | | | 97 | | | | 588 | | | | 685 | | | | 82 | | | 1986 | | (n) |
| 2260 Merritt Drive | | Garland, TX | | | | | 319 | | | | 1,806 | | | | 47 | | | | 323 | | | | 1,849 | | | | 2,172 | | | | 259 | | | 1986/99 | | (n) |
| 2220 Merritt Drive | | Garland, TX | | | | | 352 | | | | 1,993 | | | | 258 | | | | 356 | | | | 2,247 | | | | 2,603 | | | | 297 | | | 1986/2000 | | (n) |
| 2010 Merritt Drive | | Garland, TX | | | | | 350 | | | | 1,981 | | | | 112 | | | | 354 | | | | 2,088 | | | | 2,442 | | | | 304 | | | 1986 | | (n) |
| 2363 Merritt Drive | | Garland, TX | | | | | 73 | | | | 412 | | | | 117 | | | | 74 | | | | 529 | | | | 602 | | | | 67 | | | 1986 | | (n) |
| 2447 Merritt Drive | | Garland, TX | | | | | 70 | | | | 395 | | | | 81 | | | | 71 | | | | 475 | | | | 546 | | | | 57 | | | 1986 | | (n) |
2465-2475 Merritt Drive | | Garland, TX | | | | | 91 | | | | 514 | | | | 21 | | | | 92 | | | | 535 | | | | 626 | | | | 74 | | | 1986 | | (n) |
2485-2505 Merritt Drive | | Garland, TX | | | | | 431 | | | | 2,440 | | | | 415 | | | | 436 | | | | 2,849 | | | | 3,285 | | | | 356 | | | 1986 | | (n) |
| 2081 Hutton Drive — Bldg 1(k) | | Carrolton, TX | | | | | 448 | | | | 2,540 | | | | 480 | | | | 453 | | | | 3,016 | | | | 3,468 | | | | 459 | | | 1981 | | (n) |
| 2150 Hutton Drive | | Carrolton, TX | | | | | 192 | | | | 1,089 | | | | 315 | | | | 194 | | | | 1,402 | | | | 1,596 | | | | 231 | | | 1980 | | (n) |
| 2110 Hutton Drive | | Carrolton, TX | | | | | 374 | | | | 2,117 | | | | 172 | | | | 377 | | | | 2,285 | | | | 2,662 | | | | 310 | | | 1985 | | (n) |
| 2025 McKenzie Drive | | Carrolton, TX | | | | | 437 | | | | 2,478 | | | | 431 | | | | 442 | | | | 2,904 | | | | 3,346 | | | | 447 | | | 1985 | | (n) |
| 2019 McKenzie Drive | | Carrolton, TX | | | | | 502 | | | | 2,843 | | | | 174 | | | | 507 | | | | 3,012 | | | | 3,519 | | | | 418 | | | 1985 | | (n) |
| 1420 Valwood Parkway — Bldg 1(j) | | Carrolton, TX | | | | | 460 | | | | 2,608 | | | | 609 | | | | 466 | | | | 3,212 | | | | 3,677 | | | | 429 | | | 1986 | | (n) |
| 1620 Valwood Parkway(k) | | Carrolton, TX | | | | | 1,089 | | | | 6,173 | | | | 1,165 | | | | 1,100 | | | | 7,327 | | | | 8,427 | | | | 1,095 | | | 1986 | | (n) |
| 1505 Luna Road — Bldg II | | Carrolton, TX | | | | | 167 | | | | 948 | | | | 160 | | | | 169 | | | | 1,106 | | | | 1,275 | | | | 151 | | | 1988 | | (n) |
| 1625 West Crosby Road | | Carrolton, TX | | | | | 617 | | | | 3,498 | | | | 678 | | | | 631 | | | | 4,162 | | | | 4,793 | | | | 670 | | | 1988 | | (n) |
2029-2035 McKenzie Drive | | Carrolton, TX | | | | | 306 | | | | 1,870 | | | | 1,015 | | | | 306 | | | | 2,885 | | | | 3,191 | | | | 625 | | | 1985 | | (n) |
| 1840 Hutton Drive(j) | | Carrolton, TX | | | | | 811 | | | | 4,597 | | | | 521 | | | | 819 | | | | 5,111 | | | | 5,930 | | | | 656 | | | 1986 | | (n) |
| 1420 Valwood Pkwy — Bldg II | | Carrolton, TX | | | | | 373 | | | | 2,116 | | | | 422 | | | | 377 | | | | 2,534 | | | | 2,912 | | | | 376 | | | 1986 | | (n) |
| 2015 McKenzie Drive | | Carrolton, TX | | | | | 510 | | | | 2,891 | | | | 316 | | | | 516 | | | | 3,202 | | | | 3,717 | | | | 392 | | | 1986 | | (n) |
| 2105 McDaniel Drive | | Carrolton, TX | | | | | 502 | | | | 2,844 | | | | 735 | | | | 507 | | | | 3,573 | | | | 4,080 | | | | 448 | | | 1986 | | (n) |
| 2009 McKenzie Drive | | Carrolton, TX | | | | | 476 | | | | 2,699 | | | | 506 | | | | 481 | | | | 3,201 | | | | 3,682 | | | | 413 | | | 1987 | | (n) |
| 1505 Luna Road — Bldg I | | Carrolton, TX | | | | | 521 | | | | 2,953 | | | | 571 | | | | 529 | | | | 3,516 | | | | 4,045 | | | | 412 | | | 1988 | | (n) |
900-1100 Avenue S | | Grand Prairie, TX | | | | | 623 | | | | 3,528 | | | | 325 | | | | 629 | | | | 3,846 | | | | 4,475 | | | | 437 | | | 1985 | | (n) |
| 15001 Trinity Blvd | | Ft. Worth, TX | | | | | 529 | | | | 2,998 | | | | 50 | | | | 534 | | | | 3,043 | | | | 3,578 | | | | 253 | | | 1984 | | (n) |
S-7
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| Plano Crossing(l) | | Plano, TX | | | | | 1,961 | | | | 11,112 | | | | 171 | | | | 1,981 | | | | 11,263 | | | | 13,243 | | | | 943 | | | 1998 | | (n) |
| 7413A-C Dogwood Park | | Richland Hills, TX | | | | | 110 | | | | 623 | | | | 102 | | | | 111 | | | | 724 | | | | 835 | | | | 58 | | | 1990 | | (n) |
| 7450 Tower Street | | Richland Hills, TX | | | | | 36 | | | | 204 | | | | 160 | | | | 36 | | | | 363 | | | | 399 | | | | 23 | | | 1977 | | (n) |
| 7436 Tower Street | | Richland Hills, TX | | | | | 57 | | | | 324 | | | | 147 | | | | 58 | | | | 471 | | | | 528 | | | | 31 | | | 1979 | | (n) |
| 7501 Airport Freeway | | Richland Hills, TX | | | | | 113 | | | | 638 | | | | 50 | | | | 115 | | | | 686 | | | | 800 | | | | 67 | | | 1983 | | (n) |
| 7426 Tower Street | | Richland Hills, TX | | | | | 76 | | | | 429 | | | | 18 | | | | 76 | | | | 446 | | | | 522 | | | | 36 | | | 1978 | | (n) |
7427-7429 Tower Street | | Richland Hills, TX | | | | | 75 | | | | 427 | | | | 15 | | | | 76 | | | | 441 | | | | 517 | | | | 36 | | | 1981 | | (n) |
2840-2842 Handley Ederville Rd | | Richland Hills, TX | | | | | 112 | | | | 635 | | | | 34 | | | | 113 | | | | 668 | | | | 781 | | | | 56 | | | 1977 | | (n) |
7451-7477 Airport Freeway | | Richland Hills, TX | | | | | 256 | | | | 1,453 | | | | 211 | | | | 259 | | | | 1,661 | | | | 1,920 | | | | 189 | | | 1984 | | (n) |
| 7415 Whitehall Street | | Richland Hills, TX | | | | | 372 | | | | 2,107 | | | | 137 | | | | 375 | | | | 2,241 | | | | 2,616 | | | | 200 | | | 1986 | | (n) |
| 7450 Whitehall Street | | Richland Hills, TX | | | | | 104 | | | | 591 | | | | 10 | | | | 105 | | | | 600 | | | | 705 | | | | 49 | | | 1978 | | (n) |
| 7430 Whitehall Street | | Richland Hills, TX | | | | | 143 | | | | 809 | | | | 15 | | | | 144 | | | | 822 | | | | 966 | | | | 68 | | | 1985 | | (n) |
| 7420 Whitehall Street | | Richland Hills, TX | | | | | 110 | | | | 621 | | | | 28 | | | | 111 | | | | 648 | | | | 759 | | | | 60 | | | 1985 | | (n) |
| 300 Wesley Way | | Richland Hills, TX | | | | | 208 | | | | 1,181 | | | | 17 | | | | 211 | | | | 1,196 | | | | 1,407 | | | | 98 | | | 1995 | | (n) |
| 825-827 Avenue H(j) | | Arlington, TX | | | | | 600 | | | | 3,006 | | | | 193 | | | | 604 | | | | 3,195 | | | | 3,799 | | | | 210 | | | 1979 | | (n) |
| 1013-31 Avenue M | | Grand Prairie, TX | | | | | 300 | | | | 1,504 | | | | 52 | | | | 302 | | | | 1,554 | | | | 1,856 | | | | 101 | | | 1978 | | (n) |
| 1172-84 113th Street(j) | | Grand Prairie, TX | | | | | 700 | | | | 3,509 | | | | 30 | | | | 704 | | | | 3,534 | | | | 4,239 | | | | 199 | | | 1980 | | (n) |
| 1200-16 Avenue H(j) | | Arlington, TX | | | | | 600 | | | | 2,846 | | | | (17 | ) | | | 604 | | | | 2,825 | | | | 3,429 | | | | 181 | | | 1981/82 | | (n) |
| 1322-66 N. Carrier Parkway(k) | | Grand Prairie, TX | | | | | 1,000 | | | | 5,012 | | | | 58 | | | | 1,006 | | | | 5,064 | | | | 6,070 | | | | 297 | | | 1979 | | (n) |
2401-2407 Centennial Dr. | | Arlington, TX | | | | | 600 | | | | 2,534 | | | | 60 | | | | 604 | | | | 2,591 | | | | 3,194 | | | | 161 | | | 1977 | | (n) |
| 3111 West Commerce Street | | Dallas, TX | | | | | 1,000 | | | | 3,364 | | | | 45 | | | | 1,011 | | | | 3,398 | | | | 4,409 | | | | 202 | | | 1979 | | (n) |
| 4201 Kellway | | Addison, TX | | | | | 306 | | | | 1,342 | | | | 56 | | | | 317 | | | | 1,387 | | | | 1,704 | | | | 57 | | | 1980 | | (n) |
| 9150 West Royal Lane(q) | | Irving, TX | | | | | 818 | | | | 3,767 | | | | 18 | | | | 820 | | | | 3,783 | | | | 4,603 | | | | 74 | | | 1985 | | (n) |
| 13800 Senlac Drive | | Farmers Ranch, TX | | | | | 823 | | | | 4,042 | | | | 12 | | | | 825 | | | | 4,052 | | | | 4,877 | | | | 96 | | | 1988 | | (n) |
| 801-831 S. Great Southwest Pkwy(q) | | Grand Prairie, TX | | | | | 2,581 | | | | 16,556 | | | | 257 | | | | 2,586 | | | | 16,808 | | | | 19,394 | | | | 538 | | | 1975 | | (n) |
| 801-842 Heinz Way(q) | | Grand Prairie, TX | | | | | 599 | | | | 3,327 | | | | 34 | | | | 601 | | | | 3,359 | | | | 3,960 | | | | 73 | | | 1977 | | (n) |
| 901-937 Heinz Way | | Grand Prairie, TX | | | | | 493 | | | | 2,823 | | | | 7 | | | | 494 | | | | 2,829 | | | | 3,323 | | | | 70 | | | 1997 | | (n) |
| 2104 Hutton Drive | | Carrolton, TX | | | | | 246 | | | | 1,393 | | | | 172 | | | | 249 | | | | 1,563 | | | | 1,811 | | | | 199 | | | 1990 | | (n) |
| 7451 Dogwood Park | | Richland Hills, TX | | | | | 133 | | | | 753 | | | | 195 | | | | 134 | | | | 947 | | | | 1,081 | | | | 156 | | | 1977 | | (n) |
| 2821 Cullen Street | | Fort Worth, TX | | | | | 71 | | | | 404 | | | | 6 | | | | 72 | | | | 409 | | | | 481 | | | | 33 | | | 1961 | | (n) |
| 2900 Avenue E(q) | | Arlington, TX | | | | | 296 | | | | — | | | | 1,936 | | | | 296 | | | | 1,936 | | | | 2,232 | | | | 39 | | | 1968 | | (n) |
S-8
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 14500 E. Beltwood(q) | | Dallas, TX | | | | | 309 | | | | 1,368 | | | | 18 | | | | 312 | | | | 1,383 | | | | 1,695 | | | | 14 | | | 1980 | | (n) |
Denver | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 7100 North Broadway — 1 | | Denver, CO | | | | | 201 | | | | 1,141 | | | | 405 | | | | 215 | | | | 1,532 | | | | 1,748 | | | | 360 | | | 1978 | | (n) |
| 7100 North Broadway — 2 | | Denver, CO | | | | | 203 | | | | 1,150 | | | | 272 | | | | 204 | | | | 1,420 | | | | 1,624 | | | | 325 | | | 1978 | | (n) |
| 7100 North Broadway — 3 | | Denver, CO | | | | | 139 | | | | 787 | | | | 152 | | | | 140 | | | | 938 | | | | 1,078 | | | | 217 | | | 1978 | | (n) |
| 7100 North Broadway — 5 | | Denver, CO | | | | | 178 | | | | 1,018 | | | | 149 | | | | 178 | | | | 1,167 | | | | 1,345 | | | | 276 | | | 1978 | | (n) |
| 7100 North Broadway — 6 | | Denver, CO | | | | | 269 | | | | 1,526 | | | | 372 | | | | 271 | | | | 1,896 | | | | 2,167 | | | | 484 | | | 1978 | | (n) |
| 20100 East 32nd Avenue Parkway | | Aurora, CO | | | | | 314 | | | | 1,888 | | | | 173 | | | | 314 | | | | 2,060 | | | | 2,374 | | | | 540 | | | 1997 | | (n) |
| 700 West 48th Street | | Denver, CO | | | | | 302 | | | | 1,711 | | | | 439 | | | | 307 | | | | 2,145 | | | | 2,452 | | | | 508 | | | 1984 | | (n) |
| 702 West 48th Street | | Denver, CO | | | | | 135 | | | | 763 | | | | 128 | | | | 139 | | | | 886 | | | | 1,025 | | | | 216 | | | 1984 | | (n) |
| 6425 North Washington | | Denver, CO | | | | | 374 | | | | 2,118 | | | | 318 | | | | 385 | | | | 2,424 | | | | 2,809 | | | | 543 | | | 1983 | | (n) |
| 3370 North Peoria Street | | Aurora, CO | | | | | 163 | | | | 924 | | | | 70 | | | | 163 | | | | 994 | | | | 1,157 | | | | 225 | | | 1978 | | (n) |
| 3390 North Peoria Street | | Aurora, CO | | | | | 145 | | | | 822 | | | | 85 | | | | 147 | | | | 906 | | | | 1,052 | | | | 200 | | | 1978 | | (n) |
3508-3538 North Peoria Street | | Aurora, CO | | | | | 260 | | | | 1,472 | | | | 485 | | | | 264 | | | | 1,953 | | | | 2,217 | | | | 482 | | | 1978 | | (n) |
| 3568 North Peoria Street | | Aurora, CO | | | | | 222 | | | | 1,260 | | | | 355 | | | | 225 | | | | 1,612 | | | | 1,837 | | | | 376 | | | 1978 | | (n) |
| 4785 Elati | | Denver, CO | | | | | 173 | | | | 981 | | | | 212 | | | | 175 | | | | 1,192 | | | | 1,367 | | | | 295 | | | 1972 | | (n) |
| 4770 Fox Street | | Denver, CO | | | | | 132 | | | | 750 | | | | 118 | | | | 134 | | | | 866 | | | | 1,000 | | | | 194 | | | 1972 | | (n) |
| 1550 W. Evans | | Denver, CO | | | | | 385 | | | | 2,200 | | | | 411 | | | | 385 | | | | 2,610 | | | | 2,995 | | | | 549 | | | 1975 | | (n) |
| 3751-71 Revere Street | | Denver, CO | | | | | 262 | | | | 1,486 | | | | 208 | | | | 267 | | | | 1,689 | | | | 1,957 | | | | 371 | | | 1980 | | (n) |
| 3871 Revere | | Denver, CO | | | | | 361 | | | | 2,047 | | | | 559 | | | | 368 | | | | 2,599 | | | | 2,967 | | | | 550 | | | 1980 | | (n) |
| 4570 Ivy Street | | Denver, CO | | | | | 219 | | | | 1,239 | | | | 174 | | | | 220 | | | | 1,411 | | | | 1,632 | | | | 324 | | | 1985 | | (n) |
| 5855 Stapleton Drive North | | Denver, CO | | | | | 288 | | | | 1,630 | | | | 282 | | | | 290 | | | | 1,911 | | | | 2,201 | | | | 428 | | | 1985 | | (n) |
| 5885 Stapleton Drive North | | Denver, CO | | | | | 376 | | | | 2,129 | | | | 175 | | | | 380 | | | | 2,300 | | | | 2,680 | | | | 458 | | | 1985 | | (n) |
5977-5995 North Broadway | | Denver, CO | | | | | 268 | | | | 1,518 | | | | 446 | | | | 271 | | | | 1,961 | | | | 2,232 | | | | 392 | | | 1978 | | (n) |
2952-5978 North Broadway | | Denver, CO | | | | | 414 | | | | 2,346 | | | | 728 | | | | 422 | | | | 3,067 | | | | 3,489 | | | | 682 | | | 1978 | | (n) |
| 4721 Ironton Street | | Denver, CO | | | | | 232 | | | | 1,313 | | | | 1,520 | | | | 236 | | | | 2,827 | | | | 3,064 | | | | 987 | | | 1969 | | (n) |
| 7100 North Broadway — 7 | | Denver, CO | | | | | 215 | | | | 1,221 | | | | 227 | | | | 217 | | | | 1,445 | | | | 1,663 | | | | 361 | | | 1985 | | (n) |
| 7100 North Broadway — 8 | | Denver, CO | | | | | 79 | | | | 448 | | | | 104 | | | | 80 | | | | 551 | | | | 631 | | | | 112 | | | 1985 | | (n) |
| 6804 East 48th Avenue | | Denver, CO | | | | | 253 | | | | 1,435 | | | | 403 | | | | 256 | | | | 1,835 | | | | 2,092 | | | | 369 | | | 1973 | | (n) |
| 445 Bryant Street | | Denver, CO | | | | | 1,829 | | | | 10,219 | | | | 1,719 | | | | 1,829 | | | | 11,938 | | | | 13,767 | | | | 2,458 | | | 1960 | | (n) |
| East 47th Drive — A | | Denver, CO | | | | | 441 | | | | 2,689 | | | | (6 | ) | | | 441 | | | | 2,683 | | | | 3,124 | | | | 576 | | | 1997 | | (n) |
| 9500 West 49th Street — A | | Wheatridge, CO | | | | | 283 | | | | 1,625 | | | | 328 | | | | 286 | | | | 1,951 | | | | 2,236 | | | | 459 | | | 1997 | | (n) |
S-9
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 9500 West 49th Street — B | | Wheatridge, CO | | | | | 225 | | | | 1,272 | | | | 70 | | | | 226 | | | | 1,341 | | | | 1,567 | | | | 270 | | | 1997 | | (n) |
| 9500 West 49th Street — C | | Wheatridge, CO | | | | | 600 | | | | 3,409 | | | | 126 | | | | 600 | | | | 3,536 | | | | 4,136 | | | | 738 | | | 1997 | | (n) |
| 9500 West 49th Street — D | | Wheatridge, CO | | | | | 246 | | | | 1,537 | | | | 179 | | | | 246 | | | | 1,716 | | | | 1,962 | | | | 555 | | | 1997 | | (n) |
| 8100 South Park Way — A | | Littleton, CO | | | | | 423 | | | | 2,507 | | | | 192 | | | | 423 | | | | 2,699 | | | | 3,121 | | | | 565 | | | 1997 | | (n) |
| 8100 South Park Way — B | | Littleton, CO | | | | | 103 | | | | 582 | | | | 162 | | | | 104 | | | | 743 | | | | 847 | | | | 177 | | | 1984 | | (n) |
| 8100 South Park Way — C | | Littleton, CO | | | | | 568 | | | | 3,219 | | | | 223 | | | | 575 | | | | 3,435 | | | | 4,010 | | | | 698 | | | 1984 | | (n) |
| 451-591 East 124th Avenue | | Littleton, CO | | | | | 383 | | | | 2,145 | | | | 805 | | | | 383 | | | | 2,950 | | | | 3,333 | | | | 665 | | | 1979 | | (n) |
| 608 Garrison Street | | Lakewood, CO | | | | | 265 | | | | 1,501 | | | | 395 | | | | 267 | | | | 1,894 | | | | 2,161 | | | | 396 | | | 1984 | | (n) |
| 610 Garrison Street | | Lakewood, CO | | | | | 264 | | | | 1,494 | | | | 438 | | | | 266 | | | | 1,931 | | | | 2,196 | | | | 439 | | | 1984 | | (n) |
| 15000 West 6th Avenue | | Golden, CO | | | | | 913 | | | | 5,174 | | | | 1,232 | | | | 916 | | | | 6,404 | | | | 7,320 | | | | 1,498 | | | 1985 | | (n) |
| 14998 West 6th Avenue Bldg E | | Golden, CO | | | | | 565 | | | | 3,199 | | | | 224 | | | | 568 | | | | 3,419 | | | | 3,987 | | | | 757 | | | 1995 | | (n) |
| 14998 West 6th Avenue Bldg F | | Englewood, CO | | | | | 269 | | | | 1,525 | | | | 86 | | | | 271 | | | | 1,610 | | | | 1,881 | | | | 360 | | | 1995 | | (n) |
| 12503 East Euclid Drive | | Denver, CO | | | | | 1,208 | | | | 6,905 | | | | 769 | | | | 1,208 | | | | 7,675 | | | | 8,882 | | | | 1,731 | | | 1986 | | (n) |
| 6547 South Racine Circle | | Denver, CO | | | | | 739 | | | | 4,241 | | | | 152 | | | | 739 | | | | 4,393 | | | | 5,132 | | | | 889 | | | 1996 | | (n) |
| 7800 East Iliff Avenue | | Denver, CO | | | | | 188 | | | | 1,067 | | | | 245 | | | | 190 | | | | 1,310 | | | | 1,500 | | | | 258 | | | 1983 | | (n) |
| 2369 South Trenton Way | | Denver, CO | | | | | 292 | | | | 1,656 | | | | 170 | | | | 294 | | | | 1,825 | | | | 2,118 | | | | 408 | | | 1983 | | (n) |
| 2422 S. Trenton Way | | Denver, CO | | | | | 241 | | | | 1,364 | | | | 243 | | | | 243 | | | | 1,605 | | | | 1,848 | | | | 348 | | | 1983 | | (n) |
| 2452 South Trenton Way | | Denver, CO | | | | | 421 | | | | 2,386 | | | | 201 | | | | 426 | | | | 2,582 | | | | 3,008 | | | | 532 | | | 1983 | | (n) |
| 1600 South Abilene | | Aurora, CO | | | | | 465 | | | | 2,633 | | | | 79 | | | | 467 | | | | 2,710 | | | | 3,177 | | | | 573 | | | 1986 | | (n) |
| 1620 South Abilene | | Aurora, CO | | | | | 268 | | | | 1,520 | | | | 101 | | | | 270 | | | | 1,619 | | | | 1,890 | | | | 340 | | | 1986 | | (n) |
| 1640 South Abilene | | Aurora, CO | | | | | 368 | | | | 2,085 | | | | 141 | | | | 382 | | | | 2,213 | | | | 2,594 | | | | 490 | | | 1986 | | (n) |
| 13900 East Florida Ave | | Aurora, CO | | | | | 189 | | | | 1,071 | | | | 79 | | | | 190 | | | | 1,149 | | | | 1,339 | | | | 244 | | | 1986 | | (n) |
14401-14492 East 33rd Place | | Aurora, CO | | | | | 440 | | | | 2,519 | | | | 298 | | | | 440 | | | | 2,817 | | | | 3,257 | | | | 583 | | | 1979 | | (n) |
| 11701 East 53rd Avenue | | Denver, CO | | | | | 416 | | | | 2,355 | | | | 194 | | | | 422 | | | | 2,542 | | | | 2,964 | | | | 528 | | | 1985 | | (n) |
| 5401 Oswego Street | | Denver, CO | | | | | 273 | | | | 1,547 | | | | 329 | | | | 278 | | | | 1,871 | | | | 2,148 | | | | 457 | | | 1985 | | (n) |
| 3811 Joilet | | Denver, CO | | | | | 735 | | | | 4,166 | | | | 448 | | | | 752 | | | | 4,597 | | | | 5,349 | | | | 859 | | | 1977 | | (n) |
| 2630 West 2nd Avenue | | Denver, CO | | | | | 51 | | | | 286 | | | | 5 | | | | 51 | | | | 291 | | | | 342 | | | | 61 | | | 1970 | | (n) |
| 2650 West 2nd Avenue | | Denver, CO | | | | | 221 | | | | 1,252 | | | | 191 | | | | 223 | | | | 1,441 | | | | 1,664 | | | | 306 | | | 1970 | | (n) |
| 14818 West 6th Avenue Bldg A | | Golden, CO | | | | | 468 | | | | 2,799 | | | | 389 | | | | 468 | | | | 3,188 | | | | 3,656 | | | | 801 | | | 1985 | | (n) |
| 14828 West 6th Avenue Bldg B | | Golden, CO | | | | | 503 | | | | 2,942 | | | | 541 | | | | 503 | | | | 3,482 | | | | 3,985 | | | | 815 | | | 1985 | | (n) |
| 12055 E 49th Ave/4955 Peoria | | Denver, CO | | | | | 298 | | | | 1,688 | | | | 562 | | | | 305 | | | | 2,243 | | | | 2,547 | | | | 518 | | | 1984 | | (n) |
4940-4950 Paris | | Denver, CO | | | | | 152 | | | | 861 | | | | 174 | | | | 156 | | | | 1,032 | | | | 1,187 | | | | 199 | | | 1984 | | (n) |
| 4970 Paris | | Denver, CO | | | | | 95 | | | | 537 | | | | 69 | | | | 97 | | | | 604 | | | | 701 | | | | 112 | | | 1984 | | (n) |
S-10
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 7367 South Revere Parkway | | Englewood, CO | | | | | 926 | | | | 5,124 | | | | 264 | | | | 934 | | | | 5,380 | | | | 6,314 | | | | 1,067 | | | 1997 | | (n) |
| 8200 East Park Meadows Drive(j) | | Lone Tree, CO | | | | | 1,297 | | | | 7,348 | | | | 983 | | | | 1,304 | | | | 8,324 | | | | 9,628 | | | | 1,192 | | | 1984 | | (n) |
| 3250 Quentin(j) | | Aurora, CO | | | | | 1,220 | | | | 6,911 | | | | 617 | | | | 1,230 | | | | 7,518 | | | | 8,747 | | | | 1,100 | | | 1984/2000 | | (n) |
| 11585 E. 53rd Ave.(j) | | Denver, CO | | | | | 1,770 | | | | 10,030 | | | | 1,090 | | | | 1,780 | | | | 11,110 | | | | 12,890 | | | | 1,286 | | | 1984 | | (n) |
| 10500 East 54th Ave.(k) | | Denver, CO | | | | | 1,253 | | | | 7,098 | | | | 937 | | | | 1,260 | | | | 8,027 | | | | 9,287 | | | | 1,045 | | | 1986 | | (n) |
| 8835 W. 116th Street | | Broomfield, CO | | | | | 1,151 | | | | 6,523 | | | | 870 | | | | 1,304 | | | | 7,240 | | | | 8,544 | | | | 520 | | | 2002 | | (n) |
3101-3151 S. Platte River Dr. | | Englewood, CO | | | | | 2,500 | | | | 8,549 | | | | 172 | | | | 2,504 | | | | 8,717 | | | | 11,221 | | | | 508 | | | 1974 | | (n) |
3155-3199 S. Platte River Dr. | | Englewood, CO | | | | | 1,700 | | | | 7,787 | | | | 64 | | | | 1,702 | | | | 7,849 | | | | 9,551 | | | | 428 | | | 1974 | | (n) |
3201-3273 S. Platte River Dr. | | Englewood, CO | | | | | 1,600 | | | | 6,592 | | | | 161 | | | | 1,602 | | | | 6,750 | | | | 8,353 | | | | 433 | | | 1974 | | (n) |
| 18150 E. 32nd Street | | Aurora, CO | | | | | 563 | | | | 3,188 | | | | 1,168 | | | | 572 | | | | 4,347 | | | | 4,919 | | | | 718 | | | 2000 | | (n) |
| 8820 W. 116th Street(q) | | Broomfield, CO | | | | | 338 | | | | 1,918 | | | | 316 | | | | 372 | | | | 2,199 | | | | 2,571 | | | | 145 | | | 2001 | | (n) |
| 7005 East 46th Avenue | | Denver, CO | | | | | 512 | | | | 2,025 | | | | 22 | | | | 517 | | | | 2,042 | | | | 2,559 | | | | 49 | | | 1996 | | (n) |
| Hilltop Business Center I — Bldg. B(q) | | Littleton, CO | | | | | 739 | | | | — | | | | 3,577 | | | | 739 | | | | 3,578 | | | | 4,316 | | | | 416 | | | 2001 | | (n) |
| Jeffco Business Center A | | Broomfield, CO | | | | | 312 | | | | — | | | | 1,730 | | | | 370 | | | | 1,671 | | | | 2,042 | | | | 358 | | | 2001 | | (n) |
| Park Centre A(q) | | Westminister, CO | | | | | 441 | | | | — | | | | 4,241 | | | | 441 | | | | 4,241 | | | | 4,682 | | | | 545 | | | 2001 | | (n) |
| Park Centre B(q) | | Westminister, CO | | | | | 374 | | | | — | | | | 3,222 | | | | 374 | | | | 3,221 | | | | 3,596 | | | | 471 | | | 2001 | | (n) |
| Park Centre C(q) | | Westminister, CO | | | | | 374 | | | | — | | | | 3,022 | | | | 374 | | | | 3,022 | | | | 3,396 | | | | 422 | | | 2001 | | (n) |
| Park Centre D(q) | | Westminister, CO | | | | | 441 | | | | — | | | | 3,772 | | | | 441 | | | | 3,771 | | | | 4,213 | | | | 546 | | | 2001 | | (n) |
| 9586 Interstate 25 East Frontage | | Longmont, CO | | | | | 898 | | | | 5,038 | | | | 229 | | | | 939 | | | | 5,226 | | | | 6,165 | | | | 27 | | | 1997 | | (n) |
Des Moines | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1021 W. First Street, Hwy 93 | | Sumner, IA | | | | | 99 | | | | 2,540 | | | | 17 | | | | 100 | | | | 2,556 | | | | 2,656 | | | | 28 | | | 1990/1995 | | (n) |
Detroit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 238 Executive Drive | | Troy, MI | | | | | 52 | | | | 173 | | | | 554 | | | | 100 | | | | 679 | | | | 779 | | | | 555 | | | 1973 | | (n) |
| 256 Executive Drive | | Troy, MI | | | | | 44 | | | | 146 | | | | 436 | | | | 85 | | | | 541 | | | | 626 | | | | 439 | | | 1974 | | (n) |
| 301 Executive Drive | | Troy, MI | | | | | 71 | | | | 293 | | | | 731 | | | | 133 | | | | 962 | | | | 1,095 | | | | 718 | | | 1974 | | (n) |
| 449 Executive Drive | | Troy, MI | | | | | 125 | | | | 425 | | | | 1,030 | | | | 218 | | | | 1,362 | | | | 1,580 | | | | 1,002 | | | 1975 | | (n) |
| 501 Executive Drive | | Troy, MI | | | | | 71 | | | | 236 | | | | 678 | | | | 129 | | | | 856 | | | | 985 | | | | 446 | | | 1984 | | (n) |
| 451 Robbins Drive | | Troy, MI | | | | | 96 | | | | 448 | | | | 961 | | | | 192 | | | | 1,313 | | | | 1,505 | | | | 923 | | | 1975 | | (n) |
| 1095 Crooks Road | | Troy, MI | | | | | 331 | | | | 1,017 | | | | 1,006 | | | | 360 | | | | 1,994 | | | | 2,354 | | | | 1,153 | | | 1986 | | (n) |
| 1416 Meijer Drive | | Troy, MI | | | | | 94 | | | | 394 | | | | 342 | | | | 121 | | | | 709 | | | | 830 | | | | 483 | | | 1980 | | (n) |
S-11
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
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| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 1624 Meijer Drive | | Troy, MI | | | | | 236 | | | | 1,406 | | | | 902 | | | | 373 | | | | 2,171 | | | | 2,544 | | | | 1,357 | | | 1984 | | (n) |
| 1972 Meijer Drive | | Troy, MI | | | | | 315 | | | | 1,301 | | | | 721 | | | | 372 | | | | 1,965 | | | | 2,337 | | | | 1,143 | | | 1985 | | (n) |
| 1621 Northwood Drive | | Troy, MI | | | | | 85 | | | | 351 | | | | 918 | | | | 215 | | | | 1,140 | | | | 1,354 | | | | 951 | | | 1977 | | (n) |
| 1707 Northwood Drive | | Troy, MI | | | | | 95 | | | | 262 | | | | 1,221 | | | | 239 | | | | 1,339 | | | | 1,578 | | | | 841 | | | 1983 | | (n) |
| 1788 Northwood Drive | | Troy, MI | | | | | 50 | | | | 196 | | | | 549 | | | | 103 | | | | 692 | | | | 795 | | | | 488 | | | 1977 | | (n) |
| 1821 Northwood Drive | | Troy, MI | | | | | 132 | | | | 523 | | | | 742 | | | | 220 | | | | 1,177 | | | | 1,397 | | | | 975 | | | 1977 | | (n) |
| 1826 Northwood Drive | | Troy, MI | | | | | 55 | | | | 208 | | | | 394 | | | | 103 | | | | 554 | | | | 657 | | | | 461 | | | 1977 | | (n) |
| 1864 Northwood Drive | | Troy, MI | | | | | 57 | | | | 190 | | | | 437 | | | | 107 | | | | 577 | | | | 684 | | | | 479 | | | 1977 | | (n) |
| 2277 Elliott Avenue | | Troy, MI | | | | | 48 | | | | 188 | | | | 501 | | | | 104 | | | | 633 | | | | 737 | | | | 479 | | | 1975 | | (n) |
| 2451 Elliott Avenue | | Troy, MI | | | | | 78 | | | | 319 | | | | 742 | | | | 164 | | | | 975 | | | | 1,139 | | | | 790 | | | 1974 | | (n) |
| 2730 Research Drive | | Rochester Hills, MI | | | | | 903 | | | | 4,215 | | | | 674 | | | | 903 | | | | 4,889 | | | | 5,792 | | | | 2,715 | | | 1988 | | (n) |
| 2791 Research Drive | | Rochester Hills, MI | | | | | 557 | | | | 2,731 | | | | 707 | | | | 560 | | | | 3,435 | | | | 3,995 | | | | 1,603 | | | 1991 | | (n) |
| 2871 Research Drive | | Rochester Hills, MI | | | | | 324 | | | | 1,487 | | | | 372 | | | | 327 | | | | 1,856 | | | | 2,183 | | | | 932 | | | 1991 | | (n) |
| 2911 Research Drive | | Rochester Hills, MI | | | | | 504 | | | | 2,136 | | | | 654 | | | | 504 | | | | 2,790 | | | | 3,294 | | | | 1,345 | | | 1992 | | (n) |
| 3011 Research Drive | | Rochester Hills, MI | | | | | 457 | | | | 2,104 | | | | 346 | | | | 457 | | | | 2,450 | | | | 2,907 | | | | 1,392 | | | 1988 | | (n) |
| 2870 Technology Drive | | Rochester Hills, MI | | | | | 275 | | | | 1,262 | | | | 228 | | | | 279 | | | | 1,486 | | | | 1,765 | | | | 840 | | | 1988 | | (n) |
| 2900 Technology Drive | | Rochester Hills, MI | | | | | 214 | | | | 977 | | | | 531 | | | | 219 | | | | 1,503 | | | | 1,722 | | | | 650 | | | 1992 | | (n) |
| 2920 Technology Drive | | Rochester Hills, MI | | | | | 153 | | | | 671 | | | | 196 | | | | 153 | | | | 868 | | | | 1,020 | | | | 420 | | | 1992 | | (n) |
| 2930 Technology Drive | | Rochester Hills, MI | | | | | 131 | | | | 594 | | | | 380 | | | | 138 | | | | 966 | | | | 1,105 | | | | 440 | | | 1991 | | (n) |
| 2950 Technology Drive | | Rochester Hills, MI | | | | | 178 | | | | 819 | | | | 223 | | | | 185 | | | | 1,035 | | | | 1,220 | | | | 524 | | | 1991 | | (n) |
| 23014 Commerce Drive | | Farmington Hills, MI | | | | | 39 | | | | 203 | | | | 169 | | | | 56 | | | | 355 | | | | 411 | | | | 209 | | | 1983 | | (n) |
| 23028 Commerce Drive | | Farmington Hills, MI | | | | | 98 | | | | 507 | | | | 247 | | | | 125 | | | | 727 | | | | 852 | | | | 436 | | | 1983 | | (n) |
| 23035 Commerce Drive | | Farmington Hills, MI | | | | | 71 | | | | 355 | | | | 262 | | | | 93 | | | | 596 | | | | 688 | | | | 344 | | | 1983 | | (n) |
| 23042 Commerce Drive | | Farmintgon Hills, MI | | | | | 67 | | | | 277 | | | | 306 | | | | 89 | | | | 561 | | | | 650 | | | | 330 | | | 1983 | | (n) |
| 23065 Commerce Drive | | Farmington Hills, MI | | | | | 71 | | | | 408 | | | | 213 | | | | 93 | | | | 599 | | | | 692 | | | | 352 | | | 1983 | | (n) |
| 23070 Commerce Drive | | Farmington Hills, MI | | | | | 112 | | | | 442 | | | | 759 | | | | 125 | | | | 1,188 | | | | 1,313 | | | | 777 | | | 1983 | | (n) |
| 23079 Commerce Drive | | Farmington Hills, MI | | | | | 68 | | | | 301 | | | | 316 | | | | 79 | | | | 605 | | | | 685 | | | | 309 | | | 1983 | | (n) |
| 23093 Commerce Drive | | Farmington Hills, MI | | | | | 211 | | | | 1,024 | | | | 844 | | | | 295 | | | | 1,784 | | | | 2,079 | | | | 1,053 | | | 1983 | | (n) |
| 23135 Commerce Drive | | Farmington Hills, MI | | | | | 146 | | | | 701 | | | | 256 | | | | 158 | | | | 945 | | | | 1,103 | | | | 521 | | | 1986 | | (n) |
| 23163 Commerce Drive | | Farmington Hills, MI | | | | | 111 | | | | 513 | | | | 313 | | | | 138 | | | | 799 | | | | 937 | | | | 438 | | | 1986 | | (n) |
| 23177 Commerce Drive | | Farmington Hills, MI | | | | | 175 | | | | 1,007 | | | | 612 | | | | 254 | | | | 1,540 | | | | 1,794 | | | | 852 | | | 1986 | | (n) |
| 23206 Commerce Drive | | Farmington Hills, MI | | | | | 125 | | | | 531 | | | | 324 | | | | 137 | | | | 842 | | | | 980 | | | | 477 | | | 1985 | | (n) |
| 23370 Commerce Drive | | Farmington Hills, MI | | | | | 59 | | | | 233 | | | | 308 | | | | 66 | | | | 534 | | | | 600 | | | | 304 | | | 1980 | | (n) |
S-12
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 32450 N Avis Drive | | Madison Heights, MI | | | | | 281 | | | | 1,590 | | | | 99 | | | | 286 | | | | 1,684 | | | | 1,970 | | | | 332 | | | 1974 | | (n) |
| 12707 Eckles Road | | Plymouth Township, MI | | | | | 255 | | | | 1,445 | | | | 109 | | | | 267 | | | | 1,543 | | | | 1,809 | | | | 363 | | | 1990 | | (n) |
9300-9328 Harrison Rd | | Romulus, MI | | | | | 147 | | | | 834 | | | | 393 | | | | 154 | | | | 1,219 | | | | 1,374 | | | | 300 | | | 1978 | | (n) |
9330-9358 Harrison Rd | | Romulus, MI | | | | | 81 | | | | 456 | | | | 302 | | | | 85 | | | | 754 | | | | 839 | | | | 194 | | | 1978 | | (n) |
28420-28448 Highland Rd | | Romulus, MI | | | | | 143 | | | | 809 | | | | 212 | | | | 149 | | | | 1,015 | | | | 1,164 | | | | 265 | | | 1979 | | (n) |
28450-28478 Highland Rd | | Romulus, MI | | | | | 81 | | | | 461 | | | | 272 | | | | 85 | | | | 730 | | | | 815 | | | | 196 | | | 1979 | | (n) |
28421-28449 Highland Rd | | Romulus, MI | | | | | 109 | | | | 617 | | | | 291 | | | | 114 | | | | 903 | | | | 1,017 | | | | 261 | | | 1980 | | (n) |
28451-28479 Highland Rd | | Romulus, MI | | | | | 107 | | | | 608 | | | | 177 | | | | 112 | | | | 780 | | | | 892 | | | | 210 | | | 1980 | | (n) |
28825-28909 Highland Rd | | Romulus, MI | | | | | 70 | | | | 395 | | | | 267 | | | | 73 | | | | 659 | | | | 732 | | | | 169 | | | 1981 | | (n) |
28933-29017 Highland Rd | | Romulus, MI | | | | | 112 | | | | 634 | | | | 150 | | | | 117 | | | | 779 | | | | 896 | | | | 198 | | | 1982 | | (n) |
28824-28908 Highland Rd | | Romulus, MI | | | | | 134 | | | | 760 | | | | 219 | | | | 140 | | | | 972 | | | | 1,113 | | | | 215 | | | 1982 | | (n) |
28932-29016 Highland Rd | | Romulus, MI | | | | | 123 | | | | 694 | | | | 322 | | | | 128 | | | | 1,011 | | | | 1,139 | | | | 230 | | | 1982 | | (n) |
9710-9734 Harrison Rd | | Romulus, MI | | | | | 125 | | | | 706 | | | | 149 | | | | 130 | | | | 850 | | | | 980 | | | | 205 | | | 1987 | | (n) |
9740-9772 Harrison Rd | | Romulus, MI | | | | | 132 | | | | 749 | | | | 130 | | | | 138 | | | | 872 | | | | 1,011 | | | | 208 | | | 1987 | | (n) |
9840-9868 Harrison Rd | | Romulus, MI | | | | | 144 | | | | 815 | | | | 168 | | | | 151 | | | | 977 | | | | 1,127 | | | | 243 | | | 1987 | | (n) |
9800-9824 Harrison Rd | | Romulus, MI | | | | | 117 | | | | 664 | | | | 94 | | | | 123 | | | | 753 | | | | 876 | | | | 172 | | | 1987 | | (n) |
29265-29285 Airport Dr | | Romulus, MI | | | | | 140 | | | | 794 | | | | 289 | | | | 147 | | | | 1,076 | | | | 1,223 | | | | 294 | | | 1983 | | (n) |
29185-29225 Airport Dr | | Romulus, MI | | | | | 140 | | | | 792 | | | | 258 | | | | 146 | | | | 1,044 | | | | 1,191 | | | | 246 | | | 1983 | | (n) |
29149-29165 Airport Dr | | Romulus, MI | | | | | 216 | | | | 1,225 | | | | 227 | | | | 226 | | | | 1,442 | | | | 1,668 | | | | 328 | | | 1984 | | (n) |
29101-29115 Airport Dr | | Romulus, MI | | | | | 130 | | | | 738 | | | | 249 | | | | 136 | | | | 981 | | | | 1,117 | | | | 237 | | | 1985 | | (n) |
29031-29045 Airport Dr | | Romulus, MI | | | | | 124 | | | | 704 | | | | 123 | | | | 130 | | | | 821 | | | | 951 | | | | 202 | | | 1985 | | (n) |
29050-29062 Airport Dr | | Romulus, MI | | | | | 127 | | | | 718 | | | | 156 | | | | 133 | | | | 868 | | | | 1,001 | | | | 234 | | | 1986 | | (n) |
29120-29134 Airport Dr | | Romulus, MI | | | | | 161 | | | | 912 | | | | 298 | | | | 169 | | | | 1,203 | | | | 1,371 | | | | 301 | | | 1986 | | (n) |
29200-29214 Airport Dr | | Romulus, MI | | | | | 170 | | | | 963 | | | | 337 | | | | 178 | | | | 1,292 | | | | 1,469 | | | | 347 | | | 1985 | | (n) |
9301-9339 Middlebelt Rd | | Romulus, MI | | | | | 124 | | | | 703 | | | | 195 | | | | 130 | | | | 892 | | | | 1,022 | | | | 216 | | | 1983 | | (n) |
| 26980 Trolley Industrial Drive | | Taylor, MI | | | | | 450 | | | | 2,550 | | | | 1,017 | | | | 463 | | | | 3,554 | | | | 4,017 | | | | 799 | | | 1997 | | (n) |
| 32975 Capitol Avenue | | Livonia, MI | | | | | 135 | | | | 748 | | | | 332 | | | | 144 | | | | 1,071 | | | | 1,215 | | | | 207 | | | 1978 | | (n) |
| 2725 S. Industrial Highway | | Ann Arbor, MI | | | | | 660 | | | | 3,654 | | | | 322 | | | | 704 | | | | 3,931 | | | | 4,636 | | | | 748 | | | 1997 | | (n) |
| 32920 Capitol Avenue | | Livonia, MI | | | | | 76 | | | | 422 | | | | 83 | | | | 82 | | | | 499 | | | | 581 | | | | 93 | | | 1973 | | (n) |
| 11923 Brookfield Avenue | | Livonia, MI | | | | | 120 | | | | 665 | | | | 460 | | | | 128 | | | | 1,116 | | | | 1,245 | | | | 378 | | | 1973 | | (n) |
| 11965 Brookfield Avenue | | Livonia, MI | | | | | 120 | | | | 665 | | | | 67 | | | | 128 | | | | 724 | | | | 852 | | | | 138 | | | 1973 | | (n) |
| 13405 Stark Road | | Livonia, MI | | | | | 46 | | | | 254 | | | | 136 | | | | 49 | | | | 387 | | | | 436 | | | | 75 | | | 1980 | | (n) |
| 1170 Chicago Road | | Troy, MI | | | | | 249 | | | | 1,380 | | | | 232 | | | | 266 | | | | 1,595 | | | | 1,861 | | | | 292 | | | 1983 | | (n) |
S-13
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 1200 Chicago Road | | Troy, MI | | | | | 268 | | | | 1,483 | | | | 226 | | | | 286 | | | | 1,691 | | | | 1,977 | | | | 307 | | | 1984 | | (n) |
| 450 Robbins Drive | | Troy, MI | | | | | 166 | | | | 920 | | | | 223 | | | | 178 | | | | 1,132 | | | | 1,309 | | | | 210 | | | 1976 | | (n) |
| 1230 Chicago Road | | Troy, MI | | | | | 271 | | | | 1,498 | | | | 142 | | | | 289 | | | | 1,622 | | | | 1,911 | | | | 308 | | | 1996 | | (n) |
| 12886 Westmore Avenue | | Livonia, MI | | | | | 190 | | | | 1,050 | | | | 186 | | | | 202 | | | | 1,224 | | | | 1,426 | | | | 227 | | | 1981 | | (n) |
| 12898 Westmore Avenue | | Livonia, MI | | | | | 190 | | | | 1,050 | | | | 235 | | | | 202 | | | | 1,273 | | | | 1,475 | | | | 241 | | | 1981 | | (n) |
| 33025 Industrial Road | | Livonia, MI | | | | | 80 | | | | 442 | | | | 130 | | | | 85 | | | | 567 | | | | 652 | | | | 108 | | | 1980 | | (n) |
| 47711 Clipper Street | | Plymouth Township, MI | | | | | 539 | | | | 2,983 | | | | 265 | | | | 575 | | | | 3,212 | | | | 3,787 | | | | 611 | | | 1996 | | (n) |
| 32975 Industrial Road | | Livonia, MI | | | | | 160 | | | | 887 | | | | 341 | | | | 171 | | | | 1,217 | | | | 1,388 | | | | 242 | | | 1984 | | (n) |
| 32985 Industrial Road | | Livonia, MI | | | | | 137 | | | | 761 | | | | 149 | | | | 147 | | | | 900 | | | | 1,047 | | | | 167 | | | 1985 | | (n) |
| 32995 Industrial Road | | Livonia, MI | | | | | 160 | | | | 887 | | | | 180 | | | | 171 | | | | 1,056 | | | | 1,227 | | | | 211 | | | 1983 | | (n) |
| 12874 Westmore Avenue | | Livonia, MI | | | | | 137 | | | | 761 | | | | 239 | | | | 147 | | | | 990 | | | | 1,137 | | | | 176 | | | 1984 | | (n) |
| 33067 Industrial Road | | Livonia, MI | | | | | 160 | | | | 887 | | | | 305 | | | | 171 | | | | 1,181 | | | | 1,352 | | | | 211 | | | 1984 | | (n) |
| 1775 Bellingham | | Troy, MI | | | | | 344 | | | | 1,902 | | | | 238 | | | | 367 | | | | 2,117 | | | | 2,484 | | | | 394 | | | 1987 | | (n) |
| 1785 East Maple | | Troy, MI | | | | | 92 | | | | 507 | | | | 86 | | | | 98 | | | | 587 | | | | 685 | | | | 111 | | | 1985 | | (n) |
| 1807 East Maple | | Troy, MI | | | | | 321 | | | | 1,775 | | | | 199 | | | | 342 | | | | 1,953 | | | | 2,295 | | | | 376 | | | 1984 | | (n) |
| 980 Chicago | | Troy, MI | | | | | 206 | | | | 1,141 | | | | 103 | | | | 220 | | | | 1,230 | | | | 1,450 | | | | 234 | | | 1985 | | (n) |
| 1840 Enterprise Drive | | Rochester Hills, MI | | | | | 573 | | | | 3,170 | | | | 328 | | | | 611 | | | | 3,460 | | | | 4,071 | | | | 653 | | | 1990 | | (n) |
| 1885 Enterprise Drive | | Rochester Hills, MI | | | | | 209 | | | | 1,158 | | | | 115 | | | | 223 | | | | 1,259 | | | | 1,482 | | | | 240 | | | 1990 | | (n) |
| 1935-55 Enterprise Drive | | Rochester Hills, MI | | | | | 1,285 | | | | 7,144 | | | | 701 | | | | 1,371 | | | | 7,759 | | | | 9,130 | | | | 1,474 | | | 1990 | | (n) |
| 5500 Enterprise Court | | Warren, MI | | | | | 675 | | | | 3,737 | | | | 447 | | | | 721 | | | | 4,138 | | | | 4,859 | | | | 783 | | | 1989 | | (n) |
| 750 Chicago Road | | Troy, MI | | | | | 323 | | | | 1,790 | | | | 337 | | | | 345 | | | | 2,105 | | | | 2,450 | | | | 400 | | | 1986 | | (n) |
| 800 Chicago Road | | Troy, MI | | | | | 283 | | | | 1,567 | | | | 525 | | | | 302 | | | | 2,073 | | | | 2,375 | | | | 494 | | | 1985 | | (n) |
| 850 Chicago Road | | Troy, MI | | | | | 183 | | | | 1,016 | | | | 232 | | | | 196 | | | | 1,235 | | | | 1,431 | | | | 221 | | | 1984 | | (n) |
| 2805 S. Industrial Highway | | Ann Arbor, MI | | | | | 318 | | | | 1,762 | | | | 264 | | | | 340 | | | | 2,004 | | | | 2,344 | | | | 424 | | | 1990 | | (n) |
| 6833 Center Drive | | Sterling Heights, MI | | | | | 467 | | | | 2,583 | | | | 206 | | | | 493 | | | | 2,763 | | | | 3,256 | | | | 541 | | | 1998 | | (n) |
| 32201 North Avis Drive | | Madison Heights, MI | | | | | 345 | | | | 1,911 | | | | 519 | | | | 349 | | | | 2,427 | | | | 2,776 | | | | 594 | | | 1974 | | (n) |
| 1100 East Mandoline Road | | Madison Heights, MI | | | | | 888 | | | | 4,915 | | | | 1,620 | | | | 897 | | | | 6,526 | | | | 7,423 | | | | 1,438 | | | 1967 | | (n) |
| 30081 Stephenson Highway | | Madison Heights, MI | | | | | 271 | | | | 1,499 | | | | 379 | | | | 274 | | | | 1,874 | | | | 2,149 | | | | 368 | | | 1967 | | (n) |
| 1120 John A. Papalas Drive(k) | | Lincoln Park, MI | | | | | 586 | | | | 3,241 | | | | 543 | | | | 593 | | | | 3,777 | | | | 4,370 | | | | 720 | | | 1985 | | (n) |
| 4872 S. Lapeer Road | | Lake Orion Twsp, MI | | | | | 1,342 | | | | 5,441 | | | | 1,921 | | | | 1,412 | | | | 7,292 | | | | 8,704 | | | | 1,570 | | | 1999 | | (n) |
| 1400 Allen Drive | | Troy, MI | | | | | 209 | | | | 1,154 | | | | 120 | | | | 212 | | | | 1,271 | | | | 1,483 | | | | 160 | | | 1979 | | (n) |
| 1408 Allen Drive | | Troy, MI | | | | | 151 | | | | 834 | | | | 171 | | | | 153 | | | | 1,003 | | | | 1,156 | | | | 182 | | | 1979 | | (n) |
| 1305 Stephenson Hwy | | Troy, MI | | | | | 345 | | | | 1,907 | | | | 154 | | | | 350 | | | | 2,055 | | | | 2,406 | | | | 270 | | | 1979 | | (n) |
S-14
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 32505 Industrial Drive | | Madison Heights, MI | | | | | 345 | | | | 1,910 | | | | 418 | | | | 351 | | | | 2,322 | | | | 2,673 | | | | 338 | | | 1979 | | (n) |
1799-1813 Northfield Drive(j) | | Rochester Hills, MI | | | | | 481 | | | | 2,665 | | | | 135 | | | | 490 | | | | 2,792 | | | | 3,281 | | | | 390 | | | 1980 | | (n) |
| 32200 N. Avis(q) | | Madison Heights, MI | | | | | 503 | | | | 3,367 | | | | 0 | | | | 503 | | | | 3,367 | | | | 3,870 | | | | 49 | | | 1973 | | (n) |
| 100 Kay Industrial | | Orion, MI | | | | | 677 | | | | 2,018 | | | | 380 | | | | 685 | | | | 2,390 | | | | 3,075 | | | | 80 | | | 1987 | | (n) |
| 1849 West Maple Road | | Troy, MI | | | | | 1,688 | | | | 2,790 | | | | 26 | | | | 1,699 | | | | 2,806 | | | | 4,504 | | | | 23 | | | 1986 | | (n) |
| 28435 Automation Blvd. | | Wixom, MI | | | | | 621 | | | | — | | | | 3,663 | | | | 621 | | | | 3,663 | | | | 4,284 | | | | 99 | | | 2004 | | (n) |
| 12163 Globe Street(q) | | Detroit, MI | | | | | 595 | | | | 979 | | | | 154 | | | | 596 | | | | 1,132 | | | | 1,728 | | | | 49 | | | 1980 | | (n) |
| 32500 Capitol Avenue | | Livonia, MI | | | | | 258 | | | | 1,032 | | | | 11 | | | | 260 | | | | 1,041 | | | | 1,301 | | | | 9 | | | 1970 | | (n) |
| 32650 Capitol Avenue | | Livonia, MI | | | | | 282 | | | | 1,128 | | | | 50 | | | | 284 | | | | 1,176 | | | | 1,460 | | | | 10 | | | 1970 | | (n) |
| 32700 Capitol Avenue(q) | | Livonia, MI | | | | | 399 | | | | 1,596 | | | | 23 | | | | 401 | | | | 1,617 | | | | 2,018 | | | | 13 | | | 1970 | | (n) |
| 11800 Sears Drive(q) | | Livonia, MI | | | | | 693 | | | | 1,507 | | | | 30 | | | | 703 | | | | 1,527 | | | | 2,230 | | | | 60 | | | 1971 | | (n) |
| 10675 Middlebelt Road(q) | | Romulus, MI | | | | | 219 | | | | 875 | | | | 98 | | | | 226 | | | | 966 | | | | 1,192 | | | | 8 | | | 1966 | | (n) |
| 1099 Church Road | | Troy, MI | | | | | 702 | | | | 1,332 | | | | 45 | | | | 721 | | | | 1,358 | | | | 2,079 | | | | 21 | | | 1980 | | (n) |
Grand Rapids | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5050 Kendrick Court(q) | | Grand Rapids, MI | | | | | 1,721 | | | | 11,433 | | | | 5,302 | | | | 1,721 | | | | 16,735 | | | | 18,455 | | | | 4,573 | | | 1988/94 | | (n) |
| 5015 52nd Street SE | | Grand Rapids, MI | | | | | 234 | | | | 1,321 | | | | 143 | | | | 234 | | | | 1,464 | | | | 1,698 | | | | 436 | | | 1987 | | (n) |
Houston | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2102-2314 Edwards Street | | Houston, TX | | | | | 348 | | | | 1,973 | | | | 902 | | | | 382 | | | | 2,841 | | | | 3,223 | | | | 531 | | | 1961 | | (n) |
| 4545 Eastpark Drive | | Houston, TX | | | | | 235 | | | | 1,331 | | | | 715 | | | | 240 | | | | 2,041 | | | | 2,281 | | | | 437 | | | 1972 | | (n) |
| 3351 Rauch St | | Houston, TX | | | | | 272 | | | | 1,541 | | | | 189 | | | | 278 | | | | 1,724 | | | | 2,002 | | | | 338 | | | 1970 | | (n) |
| 3851 Yale St | | Houston, TX | | | | | 413 | | | | 2,343 | | | | 694 | | | | 425 | | | | 3,026 | | | | 3,451 | | | | 667 | | | 1971 | | (n) |
3337-3347 Rauch Street | | Houston, TX | | | | | 227 | | | | 1,287 | | | | 216 | | | | 233 | | | | 1,498 | | | | 1,731 | | | | 299 | | | 1970 | | (n) |
| 8505 N Loop East | | Houston, TX | | | | | 439 | | | | 2,489 | | | | 618 | | | | 449 | | | | 3,097 | | | | 3,546 | | | | 615 | | | 1981 | | (n) |
4749-4799 Eastpark Dr | | Houston, TX | | | | | 594 | | | | 3,368 | | | | 1,125 | | | | 611 | | | | 4,476 | | | | 5,087 | | | | 916 | | | 1979 | | (n) |
| 4851 Homestead Road | | Houston, TX | | | | | 491 | | | | 2,782 | | | | 900 | | | | 504 | | | | 3,669 | | | | 4,174 | | | | 725 | | | 1973 | | (n) |
3365-3385 Rauch Street | | Houston, TX | | | | | 284 | | | | 1,611 | | | | 163 | | | | 290 | | | | 1,768 | | | | 2,058 | | | | 386 | | | 1970 | | (n) |
| 5050 Campbell Road | | Houston, TX | | | | | 461 | | | | 2,610 | | | | 330 | | | | 470 | | | | 2,930 | | | | 3,401 | | | | 588 | | | 1970 | | (n) |
| 4300 Pine Timbers | | Houston, TX | | | | | 489 | | | | 2,769 | | | | 587 | | | | 499 | | | | 3,345 | | | | 3,845 | | | | 670 | | | 1980 | | (n) |
2500-2530 Fairway Park Drive | | Houston, TX | | | | | 766 | | | | 4,342 | | | | 695 | | | | 792 | | | | 5,010 | | | | 5,802 | | | | 997 | | | 1974 | | (n) |
| 6550 Longpointe | | Houston, TX | | | | | 362 | | | | 2,050 | | | | 519 | | | | 370 | | | | 2,560 | | | | 2,930 | | | | 499 | | | 1980 | | (n) |
| 1815 Turning Basin Dr | | Houston, TX | | | | | 487 | | | | 2,761 | | | | 521 | | | | 531 | | | | 3,238 | | | | 3,769 | | | | 643 | | | 1980 | | (n) |
| 1819 Turning Basin Dr | | Houston, TX | | | | | 231 | | | | 1,308 | | | | 550 | | | | 251 | | | | 1,837 | | | | 2,088 | | | | 355 | | | 1980 | | (n) |
| 1805 Turning Basin Drive | | Houston, TX | | | | | 564 | | | | 3,197 | | | | 686 | | | | 616 | | | | 3,831 | | | | 4,447 | | | | 779 | | | 1980 | | (n) |
S-15
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 7000 Empire Drive | | Houston, TX | | | | | 450 | | | | 2,552 | | | | 1,185 | | | | 452 | | | | 3,736 | | | | 4,187 | | | | 977 | | | 1980 | | (n) |
| 9777 West Gulfbank Drive | | Houston, TX | | | | | 1,216 | | | | 6,899 | | | | 1,398 | | | | 1,216 | | | | 8,297 | | | | 9,513 | | | | 1,900 | | | 1980 | | (n) |
| 9835A Genard Road | | Houston, TX | | | | | 1,505 | | | | 8,333 | | | | 3,301 | | | | 1,581 | | | | 11,558 | | | | 13,139 | | | | 1,841 | | | 1980 | | (n) |
| 9835B Genard Road | | Houston, TX | | | | | 245 | | | | 1,357 | | | | 463 | | | | 256 | | | | 1,809 | | | | 2,065 | | | | 257 | | | 1980 | | (n) |
| 10161 Harwin Drive | | Houston, TX | | | | | 505 | | | | 2,861 | | | | 792 | | | | 511 | | | | 3,648 | | | | 4,158 | | | | 628 | | | 1979/1981 | | (n) |
| 10165 Harwin Drive | | Houston, TX | | | | | 218 | | | | 1,234 | | | | 673 | | | | 220 | | | | 1,905 | | | | 2,125 | | | | 277 | | | 1979/1981 | | (n) |
| 10175 Harwin Drive | | Houston, TX | | | | | 267 | | | | 1,515 | | | | 344 | | | | 270 | | | | 1,856 | | | | 2,126 | | | | 364 | | | 1979/1981 | | (n) |
10325-10415 Landsbury Drive(k) | | Houston, TX | | | | | 696 | | | | 3,854 | | | | 439 | | | | 704 | | | | 4,284 | | | | 4,989 | | | | 411 | | | 1982 | | (n) |
| 8705 City Park Loop | | Houston, TX | | | | | 710 | | | | 2,983 | | | | 956 | | | | 714 | | | | 3,935 | | | | 4,649 | | | | 335 | | | 1982 | | (n) |
| 11505 State Highway 225 | | LaPorte City, TX | | | | | 940 | | | | 4,675 | | | | 615 | | | | 940 | | | | 5,290 | | | | 6,230 | | | | 148 | | | 2003 | | (n) |
| 6955 Portwest Drive(q) | | Houston, TX | | | | | 314 | | | | 1,686 | | | | 19 | | | | 318 | | | | 1,701 | | | | 2,019 | | | | 6 | | | 1985 | | (n) |
| 6925 Portwest Drive(q) | | Houston, TX | | | | | 402 | | | | 1,360 | | | | 19 | | | | 407 | | | | 1,374 | | | | 1,781 | | | | 7 | | | 1985 | | (n) |
| 600 Kenrick | | Houston, TX | | | | | 900 | | | | 1,791 | | | | 156 | | | | 913 | | | | 1,934 | | | | 2,847 | | | | 156 | | | 1981 | | (n) |
| 1500 E. Main | | LaPorte City, TX | | | | | 201 | | | | 1,328 | | | | 9 | | | | 202 | | | | 1,336 | | | | 1,538 | | | | 17 | | | 1972/1982 | | (n) |
Indianapolis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2400 North Shadeland | | Indianapolis, IN | | | | | 142 | | | | 802 | | | | 198 | | | | 149 | | | | 993 | | | | 1,142 | | | | 217 | | | 1970 | | (n) |
| 2402 North Shadeland | | Indianapolis, IN | | | | | 466 | | | | 2,640 | | | | 612 | | | | 489 | | | | 3,229 | | | | 3,718 | | | | 730 | | | 1970 | | (n) |
| 7901 West 21st St. | | Indianapolis, IN | | | | | 1,048 | | | | 6,027 | | | | 414 | | | | 1,048 | | | | 6,441 | | | | 7,489 | | | | 1,437 | | | 1985 | | (n) |
| 1445 Brookville Way | | Indianapolis, IN | | | | | 459 | | | | 2,603 | | | | 730 | | | | 476 | | | | 3,317 | | | | 3,793 | | | | 895 | | | 1989 | | (n) |
| 1440 Brookville Way | | Indianapolis, IN | | | | | 665 | | | | 3,770 | | | | 769 | | | | 685 | | | | 4,520 | | | | 5,205 | | | | 1,055 | | | 1990 | | (n) |
| 1240 Brookville Way | | Indianapolis, IN | | | | | 247 | | | | 1,402 | | | | 317 | | | | 258 | | | | 1,709 | | | | 1,967 | | | | 426 | | | 1990 | | (n) |
| 1220 Brookville Way | | Indianapolis, IN | | | | | 223 | | | | 40 | | | | 68 | | | | 226 | | | | 104 | | | | 331 | | | | 20 | | | 1990 | | (n) |
| 1345 Brookville Way | | Indianapolis, IN | | (s) | | | 586 | | | | 3,321 | | | | 837 | | | | 601 | | | | 4,142 | | | | 4,744 | | | | 1,078 | | | 1992 | | (n) |
| 1350 Brookville Way | | Indianapolis, IN | | | | | 205 | | | | 1,161 | | | | 213 | | | | 212 | | | | 1,368 | | | | 1,579 | | | | 342 | | | 1994 | | (n) |
| 1341 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 131 | | | | 743 | | | | 377 | | | | 136 | | | | 1,115 | | | | 1,251 | | | | 289 | | | 1971/1992 | | (n) |
1322-1438 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 145 | | | | 822 | | | | 271 | | | | 152 | | | | 1,087 | | | | 1,239 | | | | 300 | | | 1971/1992 | | (n) |
1327-1441 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 218 | | | | 1,234 | | | | 433 | | | | 225 | | | | 1,660 | | | | 1,885 | | | | 398 | | | 1992 | | (n) |
| 1304 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 71 | | | | 405 | | | | 150 | | | | 75 | | | | 552 | | | | 627 | | | | 151 | | | 1971/1992 | | (n) |
| 1402 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 165 | | | | 934 | | | | 434 | | | | 171 | | | | 1,363 | | | | 1,533 | | | | 351 | | | 1970/1992 | | (n) |
| 1504 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 219 | | | | 1,238 | | | | 269 | | | | 226 | | | | 1,500 | | | | 1,725 | | | | 343 | | | 1971/1992 | | (n) |
| 1311 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 54 | | | | 304 | | | | 98 | | | | 57 | | | | 399 | | | | 455 | | | | 90 | | | 1971/1992 | | (n) |
| 1365 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 121 | | | | 688 | | | | 283 | | | | 126 | | | | 966 | | | | 1,092 | | | | 202 | | | 1971/1992 | | (n) |
S-16
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Costs
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
1352-1354 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 178 | | | | 1,008 | | | | 373 | | | | 184 | | | | 1,374 | | | | 1,558 | | | | 328 | | | 1970/1992 | | (n) |
| 1335 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 81 | | | | 460 | | | | 172 | | | | 85 | | | | 628 | | | | 712 | | | | 177 | | | 1971/1992 | | (n) |
| 1327 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 52 | | | | 295 | | | | 78 | | | | 55 | | | | 370 | | | | 425 | | | | 105 | | | 1971/1992 | | (n) |
| 1425 Sadlier Circle E Dr | | Indianapolis, IN | | (c) | | | 21 | | | | 117 | | | | 39 | | | | 23 | | | | 154 | | | | 177 | | | | 36 | | | 1971/1992 | | (n) |
| 1230 Brookville Way | | Indianapolis, IN | | | | | 103 | | | | 586 | | | | 60 | | | | 109 | | | | 641 | | | | 750 | | | | 158 | | | 1995 | | (n) |
| 6951 E 30th St | | Indianapolis, IN | | | | | 256 | | | | 1,449 | | | | 234 | | | | 265 | | | | 1,674 | | | | 1,939 | | | | 413 | | | 1995 | | (n) |
| 6701 E 30th St | | Indianapolis, IN | | | | | 78 | | | | 443 | | | | 43 | | | | 82 | | | | 482 | | | | 564 | | | | 119 | | | 1995 | | (n) |
| 6737 E 30th St | | Indianapolis, IN | | | | | 385 | | | | 2,181 | | | | 285 | | | | 398 | | | | 2,452 | | | | 2,851 | | | | 632 | | | 1995 | | (n) |
| 1225 Brookville Way | | Indianapolis, IN | | | | | 60 | | | | — | | | | 416 | | | | 68 | | | | 408 | | | | 476 | | | | 91 | | | 1997 | | (n) |
| 6555 E 30th St | | Indianapolis, IN | | | | | 484 | | | | 4,760 | | | | 1,623 | | | | 484 | | | | 6,382 | | | | 6,867 | | | | 1,632 | | | 1969/1981 | | (n) |
2432-2436 Shadeland | | Indianapolis, IN | | | | | 212 | | | | 1,199 | | | | 465 | | | | 230 | | | | 1,645 | | | | 1,875 | | | | 419 | | | 1968 | | (n) |
8402-8440 E 33rd St. | | Indianapolis, IN | | | | | 222 | | | | 1,260 | | | | 663 | | | | 230 | | | | 1,915 | | | | 2,145 | | | | 454 | | | 1977 | | (n) |
8520-8630 E 33rd St. | | Indianapolis, IN | | | | | 326 | | | | 1,848 | | | | 741 | | | | 336 | | | | 2,580 | | | | 2,916 | | | | 625 | | | 1976 | | (n) |
8710-8768 E 33rd St. | | Indianapolis, IN | | | | | 175 | | | | 993 | | | | 436 | | | | 187 | | | | 1,416 | | | | 1,603 | | | | 347 | | | 1979 | | (n) |
3316-3346 N. Pagosa Court | | Indianapolis, IN | | | | | 325 | | | | 1,842 | | | | 622 | | | | 335 | | | | 2,453 | | | | 2,788 | | | | 590 | | | 1977 | | (n) |
| 3331 Raton Court | | Indianapolis, IN | | | | | 138 | | | | 802 | | | | 241 | | | | 138 | | | | 1,043 | | | | 1,181 | | | | 300 | | | 1979 | | (n) |
| 6751 E 30th St. | | Indianapolis, IN | | | | | 728 | | | | 2,837 | | | | 257 | | | | 741 | | | | 3,081 | | | | 3,822 | | | | 649 | | | 1997 | | (n) |
| 8525 E. 33rd Street | | Indianapolis, IN | | | | | 1,300 | | | | 2,091 | | | | 908 | | | | 1,308 | | | | 2,991 | | | | 4,299 | | | | 650 | | | 1978 | | (n) |
| 5705-97 Park Plaza Ct | | Indianapolis, IN | | (t) | | | 600 | | | | 2,194 | | | | 890 | | | | 609 | | | | 3,075 | | | | 3,684 | | | | 472 | | | 1977 | | (n) |
9319-9341 Castlegate Drive | | Indianapolis, IN | | | | | 530 | | | | 1,235 | | | | 1,005 | | | | 544 | | | | 2,227 | | | | 2,770 | | | | 257 | | | 1983 | | (n) |
9332-9350 Castlegate Drive | | Indianapolis, IN | | | | | 420 | | | | 646 | | | | 683 | | | | 429 | | | | 1,320 | | | | 1,749 | | | | 197 | | | 1983 | | (n) |
| 2855 Michigan Road | | Madison, IN | | | | | 504 | | | | 1,169 | | | | 11 | | | | 509 | | | | 1,174 | | | | 1,684 | | | | 97 | | | 1962 | | (n) |
| 9210 East 146th Street | | Noblesville, IN | | | | | 66 | | | | 684 | | | | 799 | | | | 66 | | | | 1,483 | | | | 1,549 | | | | 443 | | | 1978 | | (n) |
6101-6119 Guion Road | | Indianapolis, IN | | | | | 400 | | | | 661 | | | | 440 | | | | 405 | | | | 1,096 | | | | 1,501 | | | | 165 | | | 1976 | | (n) |
| 1380 Perry Road | | Plainfield, IN | | | | | 781 | | | | 5,156 | | | | 31 | | | | 781 | | | | 5,187 | | | | 5,968 | | | | 160 | | | 1997 | | (n) |
| 3300 Tenth Street | | Indianapolis, IN | | | | | 301 | | | | 3,428 | | | | 21 | | | | 303 | | | | 3,447 | | | | 3,750 | | | | 55 | | | 1961/2002 | | (n) |
| 4640 Martin Luther King Jr. Boulevard | | Anderson, IN | | | | | 161 | | | | 664 | | | | 6 | | | | 163 | | | | 669 | | | | 831 | | | | 10 | | | 1999 | | (n) |
| 7225 America Way(q) | | Anderson, IN | | | | | 251 | | | | 1,049 | | | | (41 | ) | | | 253 | | | | 1,006 | | | | 1,259 | | | | 11 | | | 1996 | | (n) |
| 6512 Production Drive | | Anderson, IN | | | | | 58 | | | | 281 | | | | 3 | | | | 58 | | | | 284 | | | | 342 | | | | 3 | | | 1995 | | (n) |
| 6628 Production Drive | | Anderson, IN | | | | | 150 | | | | 680 | | | | 7 | | | | 151 | | | | 686 | | | | 837 | | | | 7 | | | 1995 | | (n) |
| 2902 Enterprise Drive | | Anderson, IN | | | | | 230 | | | | 4,573 | | | | 44 | | | | 232 | | | | 4,615 | | | | 4,847 | | | | 32 | | | 1995 | | (n) |
Los Angeles | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
S-17
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| | | | | | | | | | | | | (r)
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| | | | | | | | | | | | | Capitalized
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| | | | | | | | | | | | | Subsequent to
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| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
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| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 19914 Via Baron Way | | Rancho Dominguez, CA | | (d) | | | 1,590 | | | | 9,010 | | | | 235 | | | | 1,616 | | | | 9,219 | | | | 10,835 | | | | 815 | | | 1973 | | (n) |
| 14141 Alondra Blvd. | | Santa Fe Springs, CA | | | | | 2,570 | | | | 14,565 | | | | 4,295 | | | | 2,598 | | | | 18,833 | | | | 21,430 | | | | 1,425 | | | 1969 | | (n) |
| 12616 Yukon Ave | | Hawthorne, CA | | | | | 685 | | | | 3,884 | | | | 94 | | | | 696 | | | | 3,967 | | | | 4,663 | | | | 349 | | | 1987 | | (n) |
| 3355 El Segundo Blvd(k) | | Hawthorne, CA | | | | | 267 | | | | 1,510 | | | | 1,187 | | | | 418 | | | | 2,546 | | | | 2,964 | | | | 263 | | | 1959 | | (n) |
| 12621 Cerise | | Hawthorne, CA | | | | | 265 | | | | 2,344 | | | | (773 | ) | | | 265 | | | | 1,572 | | | | 1,837 | | | | 158 | | | 1959 | | (n) |
| 333 Turnbull Canyon Road | | City of Industry, CA | | | | | 2,700 | | | | 1,824 | | | | 266 | | | | 2,700 | | | | 2,090 | | | | 4,790 | | | | 201 | | | 1968/1985 | | (n) |
| 350-390 Manville St. | | Compton, CA | | | | | 2,300 | | | | 3,768 | | | | 103 | | | | 2,313 | | | | 3,857 | | | | 6,171 | | | | 196 | | | 1979 | | (n) |
| 1944 Vista Bella Way(q) | | Rancho Dominguez, CA | | | | | 1,746 | | | | 3,148 | | | | 586 | | | | 1,821 | | | | 3,659 | | | | 5,480 | | | | 79 | | | 1976 | | (n) |
| 2000 Vista Bella Way(q) | | Rancho Dominguez, CA | | | | | 817 | | | | 1,673 | | | | 291 | | | | 852 | | | | 1,929 | | | | 2,781 | | | | 40 | | | 1971 | | (n) |
| 2835 East Ana Street Drive | | Rancho Dominguez, CA | | | | | 1,682 | | | | 2,750 | | | | 13 | | | | 1,770 | | | | 2,675 | | | | 4,445 | | | | 13 | | | 1972/2000 | | (n) |
Louisville | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 9001 Cane Run Road | | Louisville, KY | | | | | 524 | | | | — | | | | 5,577 | | | | 560 | | | | 5,541 | | | | 6,101 | | | | 1,426 | | | 1998 | | (n) |
| 9101 Cane Run Road | | Louisville, KY | | | | | 608 | | | | — | | | | 6,114 | | | | 608 | | | | 6,113 | | | | 6,722 | | | | 749 | | | 2000 | | (n) |
Milwaukee | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6523 N Sydney Place | | Glendale, WI | | | | | 172 | | | | 976 | | | | 197 | | | | 176 | | | | 1,170 | | | | 1,346 | | | | 293 | | | 1978 | | (n) |
| 8800 W Bradley | | Milwaukee, WI | | | | | 375 | | | | 2,125 | | | | 215 | | | | 388 | | | | 2,327 | | | | 2,715 | | | | 543 | | | 1982 | | (n) |
| 4560 N 124th Street | | Wauwatosa, WI | | | | | 118 | | | | 667 | | | | 85 | | | | 129 | | | | 741 | | | | 870 | | | | 159 | | | 1976 | | (n) |
| 4410-80 North 132nd Street | | Butler, WI | | | | | 355 | | | | — | | | | 4,023 | | | | 359 | | | | 4,019 | | | | 4,378 | | | | 570 | | | 1999 | | (n) |
| 5355 South Westridge Drive | | New Berlin, WI | | | | | 1,630 | | | | 7,058 | | | | 92 | | | | 1,646 | | | | 7,134 | | | | 8,780 | | | | 331 | | | 1997 | | (n) |
| 320-34 W. Vogel | | Milwaukee, WI | | | | | 506 | | | | 3,199 | | | | 14 | | | | 508 | | | | 3,211 | | | | 3,719 | | | | 171 | | | 1970 | | (n) |
| 4950 S. 6th Avenue | | Milwaukee, WI | | | | | 299 | | | | 1,565 | | | | 7 | | | | 301 | | | | 1,571 | | | | 1,871 | | | | 105 | | | 1970 | | (n) |
| 1711 Paramount Court | | Waukesha, WI | | | | | 308 | | | | 1,762 | | | | 19 | | | | 311 | | | | 1,778 | | | | 2,089 | | | | 45 | | | 1997 | | (n) |
| W 140 N9059 Lilly Road(q) | | Iomonee Falls, WI | | | | | 343 | | | | 1,153 | | | | 93 | | | | 366 | | | | 1,223 | | | | 1,589 | | | | 12 | | | 1995 | | (n) |
| N120W18485 Freistadt Road | | Germantown, WI | | | | | 700 | | | | 3,183 | | | | 49 | | | | 704 | | | | 3,228 | | | | 3,932 | | | | 223 | | | 1996 | | (n) |
| 4921 S. 2nd Street(q) | | Milwaukee, WI | | | | | 101 | | | | 713 | | | | 2 | | | | 101 | | | | 715 | | | | 816 | | | | 31 | | | 1970 | | (n) |
| 200 W. Vogel Ave., Bldg B | | Milwaukee, WI | | | | | 301 | | | | 2,150 | | | | 10 | | | | 302 | | | | 2,159 | | | | 2,461 | | | | 102 | | | 1970 | | (n) |
| 187 Kohlman Road | | Fond du Lac, WI | | | | | 547 | | | | 2,125 | | | | 47 | | | | 556 | | | | 2,163 | | | | 2,719 | | | | 14 | | | 1992/95 | | (n) |
| 247 Kohlman Road | | Fond du Lac, WI | | | | | 346 | | | | 1,346 | | | | 30 | | | | 352 | | | | 1,370 | | | | 1,722 | | | | 9 | | | 1992/95 | | (n) |
| 122-342 Kohlman Road | | Fond du Lac, WI | | | | | 2,624 | | | | 10,205 | | | | 221 | | | | 2,669 | | | | 10,381 | | | | 13,050 | | | | 65 | | | 1978/91 | | (n) |
| 1500 Peebles Drive | | Richland Center, WI | | | | | 1,577 | | | | 1,018 | | | | 15 | | | | 1,588 | | | | 1,022 | | | | 2,610 | | | | 51 | | | 1967/72 | | (n) |
Minneapolis/St. Paul | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
6507-6545 Cecilia Circle | | Bloomington, MN | | | | | 357 | | | | 1,320 | | | | 1,241 | | | | 386 | | | | 2,532 | | | | 2,918 | | | | 1,315 | | | 1980 | | (n) |
| 6201 West 111th Street | | Bloomington, MN | | (e) | | | 1,358 | | | | 8,622 | | | | 3,794 | | | | 1,499 | | | | 12,276 | | | | 13,774 | | | | 5,803 | | | 1987 | | (n) |
S-18
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
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| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
6403-6545 Cecilia Drive | | Bloomington, MN | | | | | 366 | | | | 1,363 | | | | 1,135 | | | | 395 | | | | 2,469 | | | | 2,864 | | | | 1,349 | | | 1980 | | (n) |
6925-6943 Washington Avenue | | Edina, MN | | | | | 117 | | | | 504 | | | | 1,104 | | | | 237 | | | | 1,488 | | | | 1,725 | | | | 1,097 | | | 1972 | | (n) |
6955-6973 Washington Avenue | | Edina, MN | | | | | 117 | | | | 486 | | | | 529 | | | | 207 | | | | 926 | | | | 1,132 | | | | 791 | | | 1972 | | (n) |
7251-7267 Washington Avenue | | Edina, MN | | | | | 129 | | | | 382 | | | | 717 | | | | 182 | | | | 1,046 | | | | 1,228 | | | | 750 | | | 1972 | | (n) |
7301-7325 Washington Avenue | | Edina, MN | | | | | 174 | | | | 391 | | | | 122 | | | | 193 | | | | 494 | | | | 687 | | | | 97 | | | 1972 | | (n) |
| 7101 Winnetka Avenue North | | Brooklyn Park, MN | | | | | 2,195 | | | | 6,084 | | | | 3,364 | | | | 2,228 | | | | 9,416 | | | | 11,643 | | | | 4,900 | | | 1990 | | (n) |
| 7600 Golden Triangle Drive | | Eden Prairie, MN | | | | | 566 | | | | 1,394 | | | | 1,156 | | | | 615 | | | | 2,501 | | | | 3,116 | | | | 1,400 | | | 1989 | | (n) |
| 9901 West 74th Street | | Eden Prairie, MN | | | | | 621 | | | | 3,289 | | | | 2,991 | | | | 639 | | | | 6,262 | | | | 6,901 | | | | 3,102 | | | 1983/88 | | (n) |
12220-12222 Nicollet Avenue | | Burnsville, MN | | | | | 105 | | | | 425 | | | | 380 | | | | 114 | | | | 797 | | | | 910 | | | | 466 | | | 1989/90 | | (n) |
12250-12268 Nicollet Avenue | | Burnsville, MN | | | | | 260 | | | | 1,054 | | | | 474 | | | | 296 | | | | 1,492 | | | | 1,788 | | | | 675 | | | 1989/90 | | (n) |
12224-12226 Nicollet Avenue | | Burnsville, MN | | | | | 190 | | | | 770 | | | | 715 | | | | 207 | | | | 1,468 | | | | 1,675 | | | | 557 | | | 1989/90 | | (n) |
| 1030 Lone Oak Road | | Eagan, MN | | | | | 456 | | | | 2,703 | | | | 573 | | | | 456 | | | | 3,276 | | | | 3,732 | | | | 856 | | | 1988 | | (n) |
| 1060 Lone Oak Road | | Eagan, MN | | | | | 624 | | | | 3,700 | | | | 722 | | | | 624 | | | | 4,422 | | | | 5,046 | | | | 1,189 | | | 1988 | | (n) |
| 5400 Nathan Lane | | Plymouth, MN | | | | | 749 | | | | 4,461 | | | | 923 | | | | 757 | | | | 5,376 | | | | 6,133 | | | | 1,761 | | | 1990 | | (n) |
| 10120 W 76th Street | | Eden Prairie, MN | | | | | 315 | | | | 1,804 | | | | 1,361 | | | | 315 | | | | 3,164 | | | | 3,480 | | | | 1,272 | | | 1987 | | (n) |
| 7615 Golden Triangle | | Eden Prairie, MN | | | | | 268 | | | | 1,532 | | | | 686 | | | | 268 | | | | 2,218 | | | | 2,486 | | | | 514 | | | 1987 | | (n) |
| 7625 Golden Triangle | | Eden Prairie, MN | | | | | 415 | | | | 2,375 | | | | 1,106 | | | | 415 | | | | 3,481 | | | | 3,896 | | | | 954 | | | 1987 | | (n) |
| 2605 Fernbrook Lane North | | Plymouth, MN | | | | | 443 | | | | 2,533 | | | | 646 | | | | 445 | | | | 3,177 | | | | 3,621 | | | | 767 | | | 1987 | | (n) |
| 12155 Nicollet Ave | | Burnsville, MN | | | | | 286 | | | | — | | | | 1,725 | | | | 288 | | | | 1,723 | | | | 2,011 | | | | 437 | | | 1995 | | (n) |
| 73rd Avenue North | | Brooklyn Park, MN | | | | | 504 | | | | 2,856 | | | | 540 | | | | 512 | | | | 3,388 | | | | 3,900 | | | | 848 | | | 1995 | | (n) |
| 2720 Arthur Street | | Roseville, MN | | | | | 824 | | | | 4,671 | | | | 548 | | | | 832 | | | | 5,210 | | | | 6,043 | | | | 1,319 | | | 1995 | | (n) |
| 4100 Peavey Road | | Chaska, MN | | | | | 277 | | | | 2,261 | | | | 770 | | | | 277 | | | | 3,031 | | | | 3,308 | | | | 682 | | | 1988 | | (n) |
| 11300 Hamshire Ave South | | Bloomington, MN | | | | | 527 | | | | 2,985 | | | | 1,457 | | | | 541 | | | | 4,428 | | | | 4,969 | | | | 868 | | | 1983 | | (n) |
| 375 Rivertown Drive | | Woodbury, MN | | | | | 1,083 | | | | 6,135 | | | | 2,698 | | | | 1,503 | | | | 8,413 | | | | 9,916 | | | | 1,773 | | | 1996 | | (n) |
| 5205 Highway 169 | | Plymouth, MN | | | | | 446 | | | | 2,525 | | | | 1,073 | | | | 740 | | | | 3,303 | | | | 4,043 | | | | 831 | | | 1960 | | (n) |
6451-6595 Citywest Parkway | | Eden Prairie, MN | | | | | 525 | | | | 2,975 | | | | 1,369 | | | | 538 | | | | 4,330 | | | | 4,869 | | | | 1,027 | | | 1984 | | (n) |
7100-7198 Shady Oak Road | | Eden Prairie, MN | | | | | 715 | | | | 4,054 | | | | 1,144 | | | | 736 | | | | 5,178 | | | | 5,913 | | | | 1,490 | | | 1982/2002 | | (n) |
7500-7546 Washington Square | | Eden Prairie, MN | | | | | 229 | | | | 1,300 | | | | 739 | | | | 235 | | | | 2,034 | | | | 2,269 | | | | 422 | | | 1975 | | (n) |
7550-7558 Washington Square | | Eden Prairie, MN | | | | | 153 | | | | 867 | | | | 176 | | | | 157 | | | | 1,039 | | | | 1,196 | | | | 219 | | | 1975 | | (n) |
5240-5300 Valley Industrial Blvd S | | Shakopee, MN | | | | | 362 | | | | 2,049 | | | | 973 | | | | 371 | | | | 3,012 | | | | 3,383 | | | | 669 | | | 1973 | | (n) |
| 7125 Northland Terrace | | Brooklyn Park, MN | | | | | 660 | | | | 3,740 | | | | 931 | | | | 767 | | | | 4,564 | | | | 5,331 | | | | 1,035 | | | 1996 | | (n) |
6477-6525 City West Parkway | | Eden Prairie, MN | | | | | 810 | | | | 4,590 | | | | 1,001 | | | | 819 | | | | 5,582 | | | | 6,401 | | | | 1,173 | | | 1984 | | (n) |
S-19
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 1157 Valley Park Drive | | Shakopee, MN | | | | | 760 | | | | — | | | | 6,144 | | | | 888 | | | | 6,016 | | | | 6,904 | | | | 983 | | | 1997 | | (n) |
| 500-530 Kasota Avenue SE | | Minneapolis, MN | | | | | 415 | | | | 2,354 | | | | 1,008 | | | | 432 | | | | 3,345 | | | | 3,777 | | | | 794 | | | 1976 | | (n) |
| 770-786 Kasota Avenue SE | | Minneapolis, MN | | | | | 333 | | | | 1,888 | | | | 531 | | | | 347 | | | | 2,405 | | | | 2,752 | | | | 478 | | | 1976 | | (n) |
| 800 Kasota Avenue SE | | Minneapolis, MN | | | | | 524 | | | | 2,971 | | | | 742 | | | | 597 | | | | 3,640 | | | | 4,236 | | | | 761 | | | 1976 | | (n) |
2530-2570 Kasota Avenue | | St. Paul, MN | | | | | 407 | | | | 2,308 | | | | 758 | | | | 465 | | | | 3,008 | | | | 3,473 | | | | 598 | | | 1976 | | (n) |
| 1280 Energy Park Drive | | St. Paul, MN | | | | | 700 | | | | 2,779 | | | | 23 | | | | 705 | | | | 2,797 | | | | 3,502 | | | | 155 | | | 1984 | | (n) |
| 9600 West 76th Street | | Eden Prairie, MN | | | | | 1,000 | | | | 2,450 | | | | 34 | | | | 1,034 | | | | 2,449 | | | | 3,484 | | | | 96 | | | 1997 | | (n) |
| 9700 West 76th Street | | Eden Prairie, MN | | | | | 1,000 | | | | 2,709 | | | | 133 | | | | 1,038 | | | | 2,804 | | | | 3,842 | | | | 128 | | | 1984/97 | | (n) |
| 5017 Boone Avenue North | | New Hope, MN | | (h) | | | 1,000 | | | | 1,599 | | | | 58 | | | | 1,009 | | | | 1,648 | | | | 2,657 | | | | 120 | | | 1971/74 | | (n) |
| 2300 West Highway 13(I-35 Dist Ctr)(q) | | Burnsville, MN | | | | | 2,517 | | | | 6,069 | | | | 325 | | | | 2,524 | | | | 6,387 | | | | 8,911 | | | | 405 | | | 1970/76 | | (n) |
| 1087 Park Place | | Shakopee, MN | | | | | 1,195 | | | | 4,891 | | | | 15 | | | | 1,198 | | | | 4,903 | | | | 6,101 | | | | 110 | | | 1996/2000 | | (n) |
| 5391 12th Avenue SE | | Shakopee, MN | | | | | 1,392 | | | | 8,149 | | | | 22 | | | | 1,395 | | | | 8,168 | | | | 9,563 | | | | 167 | | | 1998 | | (n) |
| 4701 Valley Industrial Boulevard | | Shakopee, MN | | | | | 1,296 | | | | 7,157 | | | | 18 | | | | 1,299 | | | | 7,172 | | | | 8,471 | | | | 219 | | | 1997 | | (n) |
| 7600 69th Avenue | | Greenfield, MN | | | | | 1,500 | | | | 8,328 | | | | 1,808 | | | | 1,510 | | | | 10,126 | | | | 11,636 | | | | 579 | | | 2004 | | (n) |
| Park 2000 III(q) | | Shakopee, MN | | | | | 590 | | | | — | | | | 4,953 | | | | 590 | | | | 4,953 | | | | 5,543 | | | | 445 | | | 2001 | | (n) |
Nashville | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3099 Barry Drive | | Portland, TN | | | | | 418 | | | | 2,368 | | | | 148 | | | | 421 | | | | 2,512 | | | | 2,933 | | | | 602 | | | 1995 | | (n) |
| 3150 Barry Drive | | Portland, TN | | | | | 941 | | | | 5,333 | | | | 309 | | | | 981 | | | | 5,602 | | | | 6,583 | | | | 1,297 | | | 1993 | | (n) |
| 5599 Highway 31 West | | Portland, TN | | | | | 564 | | | | 3,196 | | | | 211 | | | | 571 | | | | 3,400 | | | | 3,971 | | | | 829 | | | 1995 | | (n) |
| 1650 Elm Hill Pike | | Nashville, TN | | | | | 329 | | | | 1,867 | | | | 110 | | | | 332 | | | | 1,975 | | | | 2,306 | | | | 424 | | | 1984 | | (n) |
| 1931 Air Lane Drive | | Nashville, TN | | | | | 489 | | | | 2,785 | | | | 245 | | | | 493 | | | | 3,026 | | | | 3,519 | | | | 644 | | | 1984 | | (n) |
| 470 Metroplex Drive(j) | | Nashville, TN | | | | | 619 | | | | 3,507 | | | | 1,195 | | | | 626 | | | | 4,695 | | | | 5,321 | | | | 1,214 | | | 1986 | | (n) |
| 1150 Antiock Pike | | Nashville, TN | | | | | 661 | | | | 3,748 | | | | 423 | | | | 669 | | | | 4,164 | | | | 4,832 | | | | 911 | | | 1987 | | (n) |
| 4640 Cummings Park | | Nashville, TN | | | | | 360 | | | | 2,040 | | | | 174 | | | | 365 | | | | 2,209 | | | | 2,574 | | | | 335 | | | 1986 | | (n) |
| 556 Metroplex Drive | | Nashville, TN | | | | | 227 | | | | 1,285 | | | | 111 | | | | 231 | | | | 1,392 | | | | 1,623 | | | | 188 | | | 1983 | | (n) |
| 1740 River Hills Drive | | Nashville, TN | | | | | 848 | | | | 4,383 | | | | 223 | | | | 888 | | | | 4,566 | | | | 5,454 | | | | 278 | | | 1978 | | (n) |
| 375 Belvedere Drive | | Gallatin, TN | | | | | 221 | | | | 3,179 | | | | 40 | | | | 221 | | | | 3,218 | | | | 3,440 | | | | 227 | | | 1979/85 | | (n) |
| 575 Church Drive(q) | | Nashville, TN | | | | | 485 | | | | 1,411 | | | | 174 | | | | 499 | | | | 1,571 | | | | 2,070 | | | | 12 | | | 1994 | | (n) |
| 100 Rockwell Drive | | Nashville, TN | | | | | 501 | | | | 4,260 | | | | 45 | | | | 506 | | | | 4,299 | | | | 4,806 | | | | 52 | | | 1975/80 | | (n) |
Northern New Jersey | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 14 World’s Fair Drive | | Franklin, NJ | | | | | 483 | | | | 2,735 | | | | 440 | | | | 503 | | | | 3,154 | | | | 3,658 | | | | 679 | | | 1980 | | (n) |
S-20
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | (r)
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| | | | | | | | | | | | | Capitalized
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| | | | | | | | | | | | | Subsequent to
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| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
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| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 12 World’s Fair Drive | | Franklin, NJ | | | | | 572 | | | | 3,240 | | | | 552 | | | | 593 | | | | 3,770 | | | | 4,363 | | | | 796 | | | 1981 | | (n) |
| 22 World’s Fair Drive | | Franklin, NJ | | | | | 364 | | | | 2,064 | | | | 310 | | | | 375 | | | | 2,363 | | | | 2,738 | | | | 463 | | | 1983 | | (n) |
| 26 World’s Fair Drive | | Franklin, NJ | | | | | 361 | | | | 2,048 | | | | 201 | | | | 377 | | | | 2,233 | | | | 2,611 | | | | 485 | | | 1984 | | (n) |
| 24 World’s Fair Drive | | Franklin, NJ | | | | | 347 | | | | 1,968 | | | | 404 | | | | 362 | | | | 2,358 | | | | 2,719 | | | | 542 | | | 1984 | | (n) |
| 20 World’s Fair Drive Lot 13 | | Sumerset, NJ | | | | | 9 | | | | — | | | | 2,641 | | | | 691 | | | | 1,959 | | | | 2,650 | | | | 280 | | | 1999 | | (n) |
| 45 Route 46 | | Pine Brook, NJ | | | | | 969 | | | | 5,491 | | | | 444 | | | | 978 | | | | 5,925 | | | | 6,904 | | | | 900 | | | 1974/1987 | | (n) |
| 43 Route 46 | | Pine Brook, NJ | | | | | 474 | | | | 2,686 | | | | 421 | | | | 479 | | | | 3,103 | | | | 3,581 | | | | 483 | | | 1974/1987 | | (n) |
| 39 Route 46 | | Pine Brook, NJ | | | | | 260 | | | | 1,471 | | | | 163 | | | | 262 | | | | 1,631 | | | | 1,893 | | | | 230 | | | 1970 | | (n) |
| 26 Chapin Road | | Pine Brook, NJ | | | | | 956 | | | | 5,415 | | | | 516 | | | | 965 | | | | 5,922 | | | | 6,886 | | | | 798 | | | 1983 | | (n) |
| 30 Chapin Road | | Pine Brook, NJ | | | | | 960 | | | | 5,440 | | | | 376 | | | | 969 | | | | 5,807 | | | | 6,776 | | | | 794 | | | 1983 | | (n) |
| 20 Hook Mountain Road | | Pine Brook, NJ | | | | | 1,507 | | | | 8,542 | | | | 1,002 | | | | 1,534 | | | | 9,518 | | | | 11,052 | | | | 1,228 | | | 1972/1984 | | (n) |
| 30 Hook Mountain Road | | Pine Brook, NJ | | | | | 389 | | | | 2,206 | | | | 313 | | | | 396 | | | | 2,512 | | | | 2,908 | | | | 348 | | | 1972/1987 | | (n) |
| 55 Route 46 | | Pine Brook, NJ | | | | | 396 | | | | 2,244 | | | | 161 | | | | 403 | | | | 2,398 | | | | 2,801 | | | | 313 | | | 1978/1994 | | (n) |
| 16 Chapin Road | | Pine Brook, NJ | | | | | 885 | | | | 5,015 | | | | 306 | | | | 901 | | | | 5,306 | | | | 6,206 | | | | 716 | | | 1987 | | (n) |
| 20 Chapin Road | | Pine Brook, NJ | | | | | 1,134 | | | | 6,426 | | | | 351 | | | | 1,154 | | | | 6,757 | | | | 7,911 | | | | 936 | | | 1987 | | (n) |
| Sayreville Lot 3 | | Sayreville, NJ | | | | | 996 | | | | — | | | | 5,301 | | | | 996 | | | | 5,301 | | | | 6,297 | | | | 182 | | | 2002 | | (n) |
| Sayreville Lot 4 | | Sayreville, NJ | | | | | 944 | | | | — | | | | 4,633 | | | | 944 | | | | 4,633 | | | | 5,577 | | | | 367 | | | 2001 | | (n) |
| 400 Raritan Center Parkway | | Edison, NJ | | | | | 829 | | | | 4,722 | | | | 481 | | | | 836 | | | | 5,197 | | | | 6,033 | | | | 565 | | | 1983 | | (n) |
| 300 Columbus Circle | | Edison, NJ | | | | | 1,257 | | | | 7,122 | | | | 913 | | | | 1,269 | | | | 8,023 | | | | 9,292 | | | | 903 | | | 1983 | | (n) |
| 400 Apgar | | Franklin Township, NJ | | | | | 780 | | | | 4,420 | | | | 580 | | | | 796 | | | | 4,985 | | | | 5,780 | | | | 480 | | | 1987 | | (n) |
| 500 Apgar | | Franklin Township, NJ | | | | | 361 | | | | 2,044 | | | | 257 | | | | 368 | | | | 2,294 | | | | 2,662 | | | | 285 | | | 1987 | | (n) |
| 201 Circle Dr. North | | Piscataway, NJ | | | | | 840 | | | | 4,760 | | | | 489 | | | | 857 | | | | 5,232 | | | | 6,089 | | | | 497 | | | 1987 | | (n) |
| 1 Pearl Ct. | | Allendale, NJ | | | | | 623 | | | | 3,528 | | | | 625 | | | | 649 | | | | 4,127 | | | | 4,775 | | | | 324 | | | 1978 | | (n) |
| 2 Pearl Ct. | | Allendale, NJ | | | | | 255 | | | | 1,445 | | | | 1,180 | | | | 403 | | | | 2,477 | | | | 2,880 | | | | 191 | | | 1979 | | (n) |
| 3 Pearl Ct. | | Allendale, NJ | | | | | 440 | | | | 2,491 | | | | 201 | | | | 458 | | | | 2,673 | | | | 3,131 | | | | 247 | | | 1978 | | (n) |
| 4 Pearl Ct. | | Allendale, NJ | | | | | 450 | | | | 2,550 | | | | 611 | | | | 469 | | | | 3,142 | | | | 3,611 | | | | 309 | | | 1979 | | (n) |
| 5 Pearl Ct. | | Allendale, NJ | | | | | 505 | | | | 2,860 | | | | 530 | | | | 526 | | | | 3,370 | | | | 3,895 | | | | 321 | | | 1977 | | (n) |
| 59 Route 17 | | Allendale, NJ | | | | | 518 | | | | 2,933 | | | | 1,059 | | | | 539 | | | | 3,970 | | | | 4,509 | | | | 414 | | | 1979 | | (n) |
| 309-319 Pierce Street | | Somerset, NJ | | | | | 1,300 | | | | 4,628 | | | | 67 | | | | 1,309 | | | | 4,685 | | | | 5,995 | | | | 263 | | | 1986 | | (n) |
| 12 Thornton Road | | Oakland, NJ | | | | | 1,300 | | | | 3,652 | | | | 55 | | | | 1,316 | | | | 3,691 | | | | 5,007 | | | | 185 | | | 1981 | | (n) |
Orlando | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lake Point IV(q) | | Tampa, FL | | | | | 909 | | | | 4,613 | | | | 53 | | | | 920 | | | | 4,654 | | | | 5,575 | | | | 87 | | | 1987 | | (n) |
S-21
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
Philadelphia | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3240 S.78th Street | | Philadelphia, PA | | | | | 515 | | | | 1,245 | | | | 50 | | | | 532 | | | | 1,278 | | | | 1,810 | | | | 10 | | | 1980 | | (n) |
Phoenix | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1045 South Edward Drive | | Tempe, AZ | | | | | 390 | | | | 2,160 | | | | 86 | | | | 394 | | | | 2,242 | | | | 2,636 | | | | 371 | | | 1976 | | (n) |
| 46 N. 49th Ave. | | Phoenix, AZ | | | | | 283 | | | | 1,704 | | | | 718 | | | | 283 | | | | 2,422 | | | | 2,706 | | | | 341 | | | 1986 | | (n) |
| 240 N. 48th Ave. | | Phoenix, AZ | | | | | 482 | | | | 1,913 | | | | 95 | | | | 482 | | | | 2,009 | | | | 2,490 | | | | 209 | | | 1977 | | (n) |
| 220 N. 48th Ave. | | Phoenix, AZ | | | | | 530 | | | | 1,726 | | | | 143 | | | | 531 | | | | 1,868 | | | | 2,399 | | | | 179 | | | 1977 | | (n) |
| 54 N. 48th Ave. | | Phoenix, AZ | | | | | 130 | | | | 625 | | | | 39 | | | | 131 | | | | 663 | | | | 794 | | | | 62 | | | 1977 | | (n) |
| 64 N. 48th Ave. | | Phoenix, AZ | | | | | 180 | | | | 458 | | | | 55 | | | | 181 | | | | 512 | | | | 693 | | | | 57 | | | 1977 | | (n) |
| 236 N. 48th Ave. | | Phoenix, AZ | | | | | 120 | | | | 322 | | | | 34 | | | | 120 | | | | 356 | | | | 476 | | | | 38 | | | 1977 | | (n) |
| 10 S. 48th Ave. | | Phoenix, AZ | | | | | 510 | | | | 1,687 | | | | 166 | | | | 512 | | | | 1,851 | | | | 2,363 | | | | 179 | | | 1977 | | (n) |
| 115 E. Watkins St. | | Phoenix, AZ | | | | | 170 | | | | 816 | | | | 112 | | | | 171 | | | | 928 | | | | 1,098 | | | | 81 | | | 1979 | | (n) |
| 135 E. Watkins St. | | Phoenix, AZ | | | | | 380 | | | | 1,962 | | | | 127 | | | | 382 | | | | 2,087 | | | | 2,469 | | | | 202 | | | 1977 | | (n) |
| 10220 S. 51st Street | | Phoenix, AZ | | | | | 400 | | | | 1,493 | | | | 47 | | | | 406 | | | | 1,535 | | | | 1,940 | | | | 112 | | | 1985 | | (n) |
| 50 South 56th Street | | Chandler, AZ | | | | | 1,200 | | | | 3,333 | | | | (49 | ) | | | 1,207 | | | | 3,277 | | | | 4,484 | | | | 118 | | | 1991/97 | | (n) |
| 4701 W. Jefferson | | Phoenix, AZ | | | | | 926 | | | | 2,195 | | | | 628 | | | | 929 | | | | 2,820 | | | | 3,749 | | | | 129 | | | 1984 | | (n) |
| 725 No. 73rd Avenue(q) | | Phoenix, AZ | | | | | 791 | | | | 4,201 | | | | 887 | | | | 795 | | | | 5,083 | | | | 5,879 | | | | 166 | | | 2005 | | (n) |
| 825 No. 73rd Avenue(q) | | Phoenix, AZ | | | | | 696 | | | | 3,726 | | | | 180 | | | | 699 | | | | 3,903 | | | | 4,602 | | | | 94 | | | 2005 | | (n) |
| 7225 W. Roosevelt(q) | | Phoenix, AZ | | | | | 704 | | | | 3,376 | | | | 534 | | | | 707 | | | | 3,907 | | | | 4,614 | | | | 105 | | | 2005 | | (n) |
Portland | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2315 NW 21st Place | | Portland, OR | | | | | 301 | | | | 1,247 | | | | 10 | | | | 303 | | | | 1,255 | | | | 1,558 | | | | 8 | | | 1966/79 | | (n) |
Raleigh | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 70 Reems Creek | | Asheville, NC | | | | | 1,816 | | | | 4,943 | | | | 36 | | | | 1,826 | | | | 4,969 | | | | 6,795 | | | | 38 | | | 1979/81 | | (n) |
| 101 Reliance Road | | Kings Mountain, NC | | | | | 402 | | | | 3,482 | | | | 428 | | | | 405 | | | | 3,907 | | | | 4,312 | | | | 47 | | | 1981 | | (n) |
Salt Lake City | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 512 Lawndale Drive(m) | | Salt Lake City, UT | | | | | 2,705 | | | | 15,749 | | | | 2,636 | | | | 2,705 | | | | 18,385 | | | | 21,089 | | | | 4,142 | | | 1981 | | (n) |
| 1270 West 2320 South | | West Valley, UT | | | | | 138 | | | | 784 | | | | 167 | | | | 143 | | | | 947 | | | | 1,090 | | | | 217 | | | 1986/92 | | (n) |
| 1275 West 2240 South | | West Valley, UT | | | | | 395 | | | | 2,241 | | | | 473 | | | | 408 | | | | 2,702 | | | | 3,109 | | | | 548 | | | 1986/92 | | (n) |
| 1288 West 2240 South | | West Valley, UT | | | | | 119 | | | | 672 | | | | 170 | | | | 123 | | | | 838 | | | | 960 | | | | 208 | | | 1986/92 | | (n) |
| 2235 South 1300 West | | West Valley, UT | | | | | 198 | | | | 1,120 | | | | 265 | | | | 204 | | | | 1,379 | | | | 1,583 | | | | 330 | | | 1986/92 | | (n) |
| 1293 West 2200 South | | West Valley, UT | | | | | 158 | | | | 896 | | | | 192 | | | | 163 | | | | 1,084 | | | | 1,247 | | | | 263 | | | 1986/92 | | (n) |
| 1279 West 2200 South | | West Valley, UT | | | | | 198 | | | | 1,120 | | | | 68 | | | | 204 | | | | 1,182 | | | | 1,386 | | | | 248 | | | 1986/92 | | (n) |
| 1272 West 2240 South | | West Valley, UT | | | | | 336 | | | | 1,905 | | | | 471 | | | | 347 | | | | 2,365 | | | | 2,712 | | | | 626 | | | 1986/92 | | (n) |
S-22
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 1149 West 2240 South | | West Valley, UT | | | | | 217 | | | | 1,232 | | | | 77 | | | | 225 | | | | 1,302 | | | | 1,526 | | | | 258 | | | 1986/92 | | (n) |
| 1142 West 2320 South | | West Valley, UT | | | | | 217 | | | | 1,232 | | | | 190 | | | | 225 | | | | 1,415 | | | | 1,640 | | | | 354 | | | 1997 | | (n) |
| 1152 West 2240 South | | West Valley, UT | | | | | 2,067 | | | | — | | | | 3,295 | | | | 2,114 | | | | 3,249 | | | | 5,363 | | | | 441 | | | 1999 | | (n) |
| 369 Orange Street | | Salt Lake City, UT | | | | | 600 | | | | 2,855 | | | | 187 | | | | 602 | | | | 3,039 | | | | 3,642 | | | | 286 | | | 1980 | | (n) |
| 1330 W. 3300 South Avenue | | Ogden, UT | | | | | 1,100 | | | | 2,353 | | | | 611 | | | | 1,100 | | | | 2,964 | | | | 4,064 | | | | 280 | | | 1982 | | (n) |
San Diego | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 9051 Siempre Viva Rd. | | San Diego, CA | | | | | 540 | | | | 1,598 | | | | 198 | | | | 541 | | | | 1,796 | | | | 2,336 | | | | 184 | | | 1989 | | (n) |
| 9163 Siempre Viva Rd. | | San Diego, CA | | | | | 430 | | | | 1,621 | | | | 211 | | | | 431 | | | | 1,832 | | | | 2,262 | | | | 156 | | | 1989 | | (n) |
| 9295 Siempre Viva Rd. | | San Diego, CA | | | | | 540 | | | | 1,569 | | | | 138 | | | | 541 | | | | 1,706 | | | | 2,247 | | | | 159 | | | 1989 | | (n) |
| 9255 Customhouse Plaza | | San Diego, CA | | | | | 3,230 | | | | 11,030 | | | | 822 | | | | 3,234 | | | | 11,848 | | | | 15,082 | | | | 1,041 | | | 1989 | | (n) |
| 16275 Technology Drive | | San Diego, CA | | | | | 2,848 | | | | 8,641 | | | | 42 | | | | 2,859 | | | | 8,672 | | | | 11,531 | | | | 29 | | | 1963/85 | | (n) |
| 42374 Avenida Alvarado(k) | | Temecula, CA | | | | | 797 | | | | 4,514 | | | | 334 | | | | 812 | | | | 4,832 | | | | 5,644 | | | | 368 | | | 1987 | | (n) |
| 9375 Customhouse Plaza | | San Diego, CA | | | | | 430 | | | | 1,384 | | | | 211 | | | | 431 | | | | 1,595 | | | | 2,025 | | | | 150 | | | 1989 | | (n) |
| 9465 Customhouse Plaza | | San Diego, CA | | | | | 430 | | | | 1,437 | | | | 180 | | | | 431 | | | | 1,616 | | | | 2,047 | | | | 156 | | | 1989 | | (n) |
| 9485 Customhouse Plaza | | San Diego, CA | | | | | 1,200 | | | | 2,792 | | | | 249 | | | | 1,201 | | | | 3,039 | | | | 4,241 | | | | 262 | | | 1989 | | (n) |
| 2675 Customhouse Court | | San Diego, CA | | | | | 590 | | | | 2,082 | | | | 139 | | | | 591 | | | | 2,220 | | | | 2,811 | | | | 205 | | | 1989 | | (n) |
| 1725 Dornoch Court(q) | | San Diego, CA | | | | | 1,896 | | | | 5,435 | | | | 557 | | | | 1,899 | | | | 5,989 | | | | 7,888 | | | | 145 | | | 1987 | | (n) |
Southern New Jersey | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5 North Olnev Ave | | Cherry Hill, NJ | | | | | 157 | | | | 1,524 | | | | (475 | ) | | | 157 | | | | 1,049 | | | | 1,206 | | | | 200 | | | 1963/1985 | | (n) |
| 2 Springdale Road | | Cherry Hill, NJ | | | | | 126 | | | | 701 | | | | 141 | | | | 126 | | | | 843 | | | | 969 | | | | 156 | | | 1968 | | (n) |
| 4 Springdale Road(j) | | Cherry Hill, NJ | | | | | 332 | | | | 1,853 | | | | 967 | | | | 332 | | | | 2,820 | | | | 3,152 | | | | 459 | | | 1963/85 | | (n) |
| 8 Springdale Road | | Cherry Hill, NJ | | | | | 258 | | | | 1,436 | | | | 704 | | | | 258 | | | | 2,140 | | | | 2,398 | | | | 412 | | | 1966 | | (n) |
| 2050 Springdale Road | | Cherry Hill, NJ | | | | | 277 | | | | 1,545 | | | | 1,165 | | | | 277 | | | | 2,709 | | | | 2,986 | | | | 542 | | | 1965 | | (n) |
| 16 Springdale Road | | Cherry Hill, NJ | | | | | 240 | | | | 1,336 | | | | 129 | | | | 240 | | | | 1,466 | | | | 1,705 | | | | 276 | | | 1967 | | (n) |
| 5 Esterbrook Lane | | Cherry Hill, NJ | | | | | 240 | | | | 1,336 | | | | 236 | | | | 240 | | | | 1,572 | | | | 1,812 | | | | 289 | | | 1966/88 | | (n) |
| 2 Pin Oak Lane | | Cherry Hill, NJ | | | | | 314 | | | | 1,757 | | | | 606 | | | | 314 | | | | 2,363 | | | | 2,677 | | | | 454 | | | 1968 | | (n) |
| 28 Springdale Road | | Cherry Hill, NJ | | | | | 190 | | | | 1,060 | | | | 208 | | | | 190 | | | | 1,269 | | | | 1,459 | | | | 235 | | | 1967 | | (n) |
| 3 Esterbrook Lane | | Cherry Hill, NJ | | | | | 198 | | | | 1,102 | | | | 486 | | | | 198 | | | | 1,588 | | | | 1,786 | | | | 286 | | | 1968 | | (n) |
| 4 Esterbrook Lane | | Cherry Hill, NJ | | | | | 232 | | | | 1,294 | | | | 43 | | | | 232 | | | | 1,336 | | | | 1,569 | | | | 257 | | | 1969 | | (n) |
| 26 Springdale Road | | Cherry Hill, NJ | | | | | 226 | | | | 1,257 | | | | 501 | | | | 226 | | | | 1,757 | | | | 1,983 | | | | 322 | | | 1968 | | (n) |
| 1 Keystone Ave. | | Cherry Hill, NJ | | | | | 218 | | | | 1,223 | | | | 934 | | | | 218 | | | | 2,157 | | | | 2,375 | | | | 404 | | | 1969 | | (n) |
| 21 Olnev Ave. | | Cherry Hill, NJ | | | | | 68 | | | | 380 | | | | 65 | | | | 68 | | | | 445 | | | | 513 | | | | 82 | | | 1969 | | (n) |
| 19 Olnev Ave. | | Cherry Hill, NJ | | | | | 200 | | | | 1,119 | | | | 1,112 | | | | 200 | | | | 2,231 | | | | 2,431 | | | | 384 | | | 1971 | | (n) |
S-23
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| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
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| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
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Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 2 Keystone Ave. | | Cherry Hill, NJ | | | | | 214 | | | | 1,194 | | | | 545 | | | | 214 | | | | 1,739 | | | | 1,953 | | | | 341 | | | 1970 | | (n) |
| 18 Olnev Ave | | Cherry Hill, NJ | | | | | 247 | | | | 1,382 | | | | 100 | | | | 247 | | | | 1,482 | | | | 1,729 | | | | 281 | | | 1974 | | (n) |
| 2030 Springdale Rod | | Cherry Hill, NJ | | | | | 523 | | | | 2,914 | | | | 1,499 | | | | 523 | | | | 4,413 | | | | 4,936 | | | | 878 | | | 1977 | | (n) |
| 111 Whittendale Drive | | Morrestown, NJ | | | | | 515 | | | | 2,916 | | | | 138 | | | | 522 | | | | 3,046 | | | | 3,568 | | | | 459 | | | 1991/96 | | (n) |
| 9 Whittendale | | Morrestown, NJ | | | | | 337 | | | | 1,911 | | | | 78 | | | | 343 | | | | 1,983 | | | | 2,326 | | | | 224 | | | 2000 | | (n) |
| 7851 Airport | | Pennsauken, NJ | | | | | 160 | | | | 508 | | | | 382 | | | | 163 | | | | 888 | | | | 1,050 | | | | 103 | | | 1966 | | (n) |
| 103 Central | | Mt. Laurel, NJ | | | | | 610 | | | | 1,847 | | | | 1,552 | | | | 619 | | | | 3,390 | | | | 4,009 | | | | 404 | | | 1970 | | (n) |
| 999 Grand Avenue | | Hammonton, NJ | | (u) | | | 969 | | | | 8,793 | | | | 96 | | | | 979 | | | | 8,879 | | | | 9,858 | | | | 343 | | | 1980 | | (n) |
7860-7870 Airport | | Pennsauken, NJ | | | | | 120 | | | | 366 | | | | 278 | | | | 122 | | | | 642 | | | | 764 | | | | 82 | | | 1968 | | (n) |
St. Louis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2121 Chapin Industrial Drive | | Vinita Park, MO | | | | | 606 | | | | 4,384 | | | | (4,136 | ) | | | 614 | | | | 240 | | | | 854 | | | | 87 | | | 1969/94 | | (n) |
10431-10449 Midwest Industrial Blvd | | Olivette, MO | | | | | 237 | | | | 1,360 | | | | 512 | | | | 237 | | | | 1,872 | | | | 2,109 | | | | 601 | | | 1967 | | (n) |
| 10751 Midwest Industrial Boulevard | | Olivette, MO | | | | | 193 | | | | 1,119 | | | | 355 | | | | 194 | | | | 1,474 | | | | 1,667 | | | | 450 | | | 1965 | | (n) |
| 6951 N Hanley(j) | | Hazelwood, MO | | | | | 405 | | | | 2,295 | | | | 1,305 | | | | 419 | | | | 3,586 | | | | 4,005 | | | | 809 | | | 1965 | | (n) |
| 1037 Warson — Bldg A(q) | | St. Louis, MO | | | | | 246 | | | | 1,359 | | | | 185 | | | | 251 | | | | 1,539 | | | | 1,790 | | | | 134 | | | 1968 | | (n) |
| 1037 Warson — Bldg B(q) | | St. Louis, MO | | | | | 380 | | | | 2,103 | | | | 885 | | | | 388 | | | | 2,980 | | | | 3,368 | | | | 213 | | | 1968 | | (n) |
| 1037 Warson — Bldg C(q) | | St. Louis, MO | | | | | 303 | | | | 1,680 | | | | 504 | | | | 310 | | | | 2,177 | | | | 2,487 | | | | 186 | | | 1968 | | (n) |
| 1037 Warson — Bldg D(q) | | St. Louis, MO | | | | | 353 | | | | 1,952 | | | | 151 | | | | 360 | | | | 2,095 | | | | 2,455 | | | | 189 | | | 1968 | | (n) |
6821-6857 Hazelwood Ave | | Berkeley, MO | | | | | 985 | | | | 6,205 | | | | 702 | | | | 985 | | | | 6,907 | | | | 7,892 | | | | 668 | | | 2001 | | (n) |
| 13701 Rider Trail North | | Earth City, MO | | | | | 800 | | | | 2,099 | | | | 484 | | | | 804 | | | | 2,579 | | | | 3,383 | | | | 363 | | | 1985 | | (n) |
1908-2000 Innerbelt(j) | | Overland, MO | | | | | 1,590 | | | | 9,026 | | | | 670 | | | | 1,591 | | | | 9,696 | | | | 11,286 | | | | 1,007 | | | 1987 | | (n) |
| 8449-95 Mid-County Industrial | | Vinita Park, MO | | | | | 520 | | | | 1,590 | | | | 178 | | | | 520 | | | | 1,768 | | | | 2,288 | | | | 183 | | | 1988 | | (n) |
| 84104-76 Mid County Industrial | | Vinita Park, MO | | | | | 540 | | | | 2,109 | | | | (34 | ) | | | 540 | | | | 2,075 | | | | 2,615 | | | | 204 | | | 1989 | | (n) |
| 2001 Innerbelt Business Center | | Overland, MO | | | | | 1,050 | | | | 4,451 | | | | 169 | | | | 1,050 | | | | 4,620 | | | | 5,670 | | | | 438 | | | 1987 | | (n) |
Tampa | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6202 Benjamin Road | | Tampa, FL | | | | | 203 | | | | 1,151 | | | | 456 | | | | 211 | | | | 1,598 | | | | 1,810 | | | | 372 | | | 1981 | | (n) |
| 6204 Benjamin Road | | Tampa, FL | | | | | 432 | | | | 2,445 | | | | 367 | | | | 454 | | | | 2,789 | | | | 3,244 | | | | 590 | | | 1982 | | (n) |
| 6206 Benjamin Road | | Tampa, FL | | | | | 397 | | | | 2,251 | | | | 463 | | | | 416 | | | | 2,695 | | | | 3,111 | | | | 564 | | | 1983 | | (n) |
| 6302 Benjamin Road | | Tampa, FL | | | | | 214 | | | | 1,212 | | | | 222 | | | | 224 | | | | 1,424 | | | | 1,648 | | | | 302 | | | 1983 | | (n) |
| 6304 Benjamin Road | | Tampa, FL | | | | | 201 | | | | 1,138 | | | | 183 | | | | 209 | | | | 1,312 | | | | 1,522 | | | | 286 | | | 1984 | | (n) |
S-24
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| | | | | | | | | | | | | Subsequent to
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| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
| 6306 Benjamin Road | | Tampa, FL | | | | | 257 | | | | 1,457 | | | | 231 | | | | 269 | | | | 1,676 | | | | 1,945 | | | | 330 | | | 1984 | | (n) |
| 6308 Benjamin Road | | Tampa, FL | | | | | 345 | | | | 1,958 | | | | 336 | | | | 362 | | | | 2,278 | | | | 2,639 | | | | 473 | | | 1984 | | (n) |
| 5313 Johns Road | | Tampa, FL | | | | | 204 | | | | 1,159 | | | | 201 | | | | 257 | | | | 1,307 | | | | 1,564 | | | | 254 | | | 1991 | | (n) |
| 5602 Thompson Center Court | | Tampa, FL | | | | | 115 | | | | 652 | | | | 131 | | | | 120 | | | | 778 | | | | 898 | | | | 174 | | | 1972 | | (n) |
| 5525 Johns Road | | Tampa, FL | | | | | 192 | | | | 1,086 | | | | 76 | | | | 200 | | | | 1,155 | | | | 1,354 | | | | 232 | | | 1993 | | (n) |
| 5709 Johns Road | | Tampa, FL | | | | | 192 | | | | 1,086 | | | | 165 | | | | 200 | | | | 1,244 | | | | 1,443 | | | | 287 | | | 1990 | | (n) |
| 5711 Johns Road | | Tampa, FL | | | | | 243 | | | | 1,376 | | | | 120 | | | | 255 | | | | 1,483 | | | | 1,738 | | | | 300 | | | 1990 | | (n) |
| 5453 W Waters Avenue | | Tampa, FL | | | | | 71 | | | | 402 | | | | 105 | | | | 82 | | | | 496 | | | | 578 | | | | 105 | | | 1987 | | (n) |
| 5455 W Waters Avenue | | Tampa, FL | | | | | 307 | | | | 1,742 | | | | 269 | | | | 326 | | | | 1,993 | | | | 2,318 | | | | 403 | | | 1987 | | (n) |
| 5553 W Waters Avenue | | Tampa, FL | | | | | 307 | | | | 1,742 | | | | 195 | | | | 326 | | | | 1,918 | | | | 2,244 | | | | 385 | | | 1987 | | (n) |
| 5501 W Waters Avenue | | Tampa, FL | | | | | 154 | | | | 871 | | | | 192 | | | | 162 | | | | 1,055 | | | | 1,217 | | | | 223 | | | 1990 | | (n) |
| 5503 W Waters Avenue | | Tampa, FL | | | | | 71 | | | | 402 | | | | 50 | | | | 75 | | | | 448 | | | | 523 | | | | 94 | | | 1990 | | (n) |
| 5555 W Waters Avenue | | Tampa, FL | | | | | 213 | | | | 1,206 | | | | 138 | | | | 221 | | | | 1,336 | | | | 1,557 | | | | 280 | | | 1990 | | (n) |
| 5557 W Waters Avenue | | Tampa, FL | | | | | 59 | | | | 335 | | | | 35 | | | | 62 | | | | 366 | | | | 429 | | | | 73 | | | 1990 | | (n) |
| 5461 W Waters | | Tampa, FL | | | | | 261 | | | | — | | | | 1,197 | | | | 265 | | | | 1,193 | | | | 1,458 | | | | 209 | | | 1998 | | (n) |
| 5481 W. Waters Avenue | | Tampa, FL | | | | | 558 | | | | — | | | | 2,306 | | | | 561 | | | | 2,304 | | | | 2,865 | | | | 382 | | | 1999 | | (n) |
4515-4519 George Road | | Tampa, FL | | | | | 633 | | | | 3,587 | | | | 503 | | | | 640 | | | | 4,083 | | | | 4,723 | | | | 499 | | | 1985 | | (n) |
| 6301 Benjamin Road | | Tampa, FL | | | | | 292 | | | | 1,657 | | | | 84 | | | | 295 | | | | 1,739 | | | | 2,033 | | | | 206 | | | 1986 | | (n) |
| 5723 Benjamin Road | | Tampa, FL | | | | | 406 | | | | 2,301 | | | | 54 | | | | 409 | | | | 2,352 | | | | 2,761 | | | | 263 | | | 1986 | | (n) |
| 6313 Benjamin Road | | Tampa, FL | | | | | 229 | | | | 1,296 | | | | 134 | | | | 231 | | | | 1,428 | | | | 1,659 | | | | 191 | | | 1986 | | (n) |
| 5801 Benjamin Road | | Tampa, FL | | | | | 564 | | | | 3,197 | | | | 141 | | | | 569 | | | | 3,334 | | | | 3,903 | | | | 373 | | | 1986 | | (n) |
| 5802 Benjamin Road | | Tampa, FL | | | | | 686 | | | | 3,889 | | | | 471 | | | | 692 | | | | 4,355 | | | | 5,047 | | | | 521 | | | 1986 | | (n) |
| 5925 Benjamin Road | | Tampa, FL | | | | | 328 | | | | 1,859 | | | | 361 | | | | 331 | | | | 2,217 | | | | 2,548 | | | | 238 | | | 1986 | | (n) |
| 6089 Johns Road | | Tampa, FL | | (v) | | | 180 | | | | 987 | | | | 40 | | | | 186 | | | | 1,022 | | | | 1,207 | | | | 48 | | | 1985 | | (n) |
| 6091 Johns Road(q) | | Tampa, FL | | (v) | | | 140 | | | | 730 | | | | 22 | | | | 144 | | | | 748 | | | | 892 | | | | 38 | | | 1986 | | (n) |
| 6103 Johns Road | | Tampa, FL | | (v) | | | 220 | | | | 1,160 | | | | 42 | | | | 226 | | | | 1,196 | | | | 1,422 | | | | 56 | | | 1986 | | (n) |
| 6201 Johns Road(q) | | Tampa, FL | | (v) | | | 200 | | | | 1,107 | | | | 51 | | | | 205 | | | | 1,153 | | | | 1,358 | | | | 69 | | | 1981 | | (n) |
| 6203 Johns Road(q) | | Tampa, FL | | (v) | | | 300 | | | | 1,460 | | | | 56 | | | | 311 | | | | 1,506 | | | | 1,816 | | | | 102 | | | 1987 | | (n) |
| 6205 Johns Road(q) | | Tampa, FL | | (v) | | | 270 | | | | 1,363 | | | | 18 | | | | 278 | | | | 1,373 | | | | 1,651 | | | | 50 | | | 2000 | | (n) |
| 6101 Johns Road(q) | | Tampa, FL | | | | | 210 | | | | 833 | | | | 36 | | | | 216 | | | | 862 | | | | 1,079 | | | | 57 | | | 1981 | | (n) |
| 4908 Tampa West Blvd | | Tampa, FL | | | | | 2,622 | | | | 8,643 | | | | 31 | | | | 2,630 | | | | 8,666 | | | | 11,296 | | | | 44 | | | 1979/83 | | (n) |
S-25
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| | | | | | | | | | | | | Capitalized
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Subsequent to
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Acquisition or
| | | Gross Amount Carried
| | | | | | | | |
| | | | | | | (b)
| | | Completion
| | | at Close of Period 12/31/05 | | | Accumulated
| | | | | |
| | | Location
| | (a)
| | Initial Cost | | | and Valuation
| | | | | | Building and
| | | | | | Depreciation
| | | Year Built/
| | Depreciable
|
Building Address | | (City/State) | | Encumbrances | | Land | | | Buildings | | | Provision | | | Land | | | Improvements | | | Total | | | 12/31/05 | | | Renovated | | Lives (Years) |
| | | | | | | (Dollars in thousands) | | |
| |
Toronto | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 135 Dundas Street | | Cambridge Ontario, Canada | | | | | 3,128 | | | | 4,958 | | | | 133 | | | | 3,176 | | | | 5,043 | | | | 8,219 | | | | 104 | | | 1953/59 | | (n) |
| 678 Erie Street | | Stratford Ontario, Canada | | | | | 786 | | | | 557 | | | | 43 | | | | 800 | | | | 586 | | | | 1,386 | | | | 37 | | | 1955/76 | | (n) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (n) |
Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4200 West Harry Street(k) | | Wichita, KS | | | | | 193 | | | | 2,224 | | | | 1,777 | | | | 532 | | | | 3,662 | | | | 4,194 | | | | 1,918 | | | 1972 | | (n) |
| 6601 S. 33rd Street | | McAllen, TX | | | | | 231 | | | | 1,276 | | | | 166 | | | | 233 | | | | 1,440 | | | | 1,673 | | | | 240 | | | 1975 | | (n) |
| 3501 Maple Street(q) | | Abilene, TX | | | | | 67 | | | | 1,057 | | | | 1,354 | | | | 266 | | | | 2,212 | | | | 2,478 | | | | 974 | | | 1980 | | (n) |
| 6266 Hurt Road(q) | | Horn Lake, MS | | | | | 427 | | | | — | | | | 2,250 | | | | 427 | | | | 2,250 | | | | 2,677 | | | | 239 | | | 1963 | | (n) |
| 6266 Hurt Road Building B(q) | | Horn Lake, MS | | | | | — | | | | — | | | | 867 | | | | 99 | | | | 767 | | | | 867 | | | | 4 | | | 1963 | | (n) |
| 6266 Hurt Road Building C(q) | | Horn Lake, MS | | | | | — | | | | — | | | | 292 | | | | 278 | | | | 14 | | | | 292 | | | | 1 | | | 1963 | | (n) |
| 1105 Industrial Lane | | Malvern, AK | | | | | 135 | | | | — | | | | 5,957 | | | | 177 | | | | 5,915 | | | | 6,092 | | | | 25 | | | 2005 | | (n) |
| 7601 NW 107th Terrace | | Kansas City, MO | | | | | 746 | | | | 4,712 | | | | 13 | | | | 748 | | | | 4,723 | | | | 5,471 | | | | 171 | | | 1982/87 | | (n) |
| 12626 Silicon Drive | | San Antonio, TX | | | | | 768 | | | | 3,448 | | | | 20 | | | | 776 | | | | 3,459 | | | | 4,236 | | | | 75 | | | 1981/95 | | (n) |
| 100 Nemec Way | | Byhalia, MS | | | | | 488 | | | | 11,438 | | | | 340 | | | | 797 | | | | 11,469 | | | | 12,266 | | | | 203 | | | 1988/92 | | (n) |
| 3100 Pinson Valley Parkway | | Birmingham, AL | | | | | 303 | | | | 742 | | | | 6 | | | | 305 | | | | 746 | | | | 1,051 | | | | 6 | | | 1970 | | (n) |
| 1245 N. Hearne Avenue | | Shreveport, LA | | | | | 99 | | | | 1,263 | | | | 11 | | | | 100 | | | | 1,272 | | | | 1,373 | | | | 13 | | | 1981/2004 | | (n) |
| 5024 Pelham Road | | Greenville, SC | | | | | 2,258 | | | | 5,011 | | | | 41 | | | | 2,272 | | | | 5,038 | | | | 7,310 | | | | 58 | | | 1977/1992 | | (n) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Redevelopments / Developments / Developable Land | | | | | | | 54,010 | | | | 2,245 | | | | 58,366 | | | | 69,755 | | | | 44,866 | | | | 114,621 | | | | 605 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | 468,246 | | | $ | 1,887,021 | | | $ | 493,320 | | | $ | 496,880 | | | $ | 2,351,707 | | | $ | 2,848,587 | | | $ | 357,228 | (p) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
S-26
NOTES:
| | |
| (a) | | See description of encumbrances in Note 6 to Notes to Consolidated Financial Statements. |
| |
| (b) | | Initial cost for each respective property is tangible purchase price allocated in accordance with SFAS No. 141. |
| |
| (c) | | These properties collateralize the Assumed Loan I. |
| |
| (d) | | This property collateralizes the Acquisition Mortgage Loan VIII. |
| |
| (e) | | This property collateralizes the Acquisition Mortgage Loan IX. |
| |
| (f) | | This property collateralizes the Acquisition Mortgage Loan IV. |
| |
| (g) | | This property collateralizes the Acquisition Mortgage Loan X. |
| |
| (h) | | This property collateralizes the Acquisition Mortgage Loan XVI. |
| |
| (i) | | This property collateralizes the Acquisition Mortgage Loan XVII. |
| |
| (j) | | Comprised of two properties. |
| |
| (k) | | Comprised of three properties. |
| |
| (l) | | Comprised of four properties. |
| |
| (m) | | Comprised of 28 properties. |
| |
| (n) | | Depreciation is computed based upon the following estimated lives: |
| | | | | |
| Buildings, Improvements | | | 20 to 50 years | |
| Tenant Improvements, Leasehold Improvements | | | Life of lease | |
| Furniture, Fixtures and Equipment | | | 5 to 10 years | |
| | |
| (o) | | These properties represent developable land and redevelopments that have not been placed in service. |
| |
| (p) | | Excludes $66,328 of Construction in Progress (including $254 of construction in progress included in held for sale), and includes real estate held for sale of $6,521 (Land), $11,203 (Buildings and Improvements), and $1,473 (Accumulated Depreciation). |
| |
| (q) | | Property is not in-service as of 12/31/05. |
| |
| (r) | | Improvements are net of write-off of fully depreciated assets. |
| |
| (s) | | This property collateralizes the Assumed Loan II. |
| |
| (t) | | This property collateralizes the Acquisition Mortgage Loan XII. |
| |
| (u) | | This property collateralizes the Acquisition Mortgage Loan XVIII. |
| |
| (v) | | These properties collateralize the Acquisition Mortgage Loan XIV. |
At December 31, 2005, the aggregate cost of land and buildings and equipment for federal income tax purpose was approximately $2.6 billion (excluding construction in progress.)
S-27
FIRST INDUSTRIAL LP
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2005
(Dollars in thousands)
The changes in total real estate assets for the three years ended December 31, 2005 are as follows:
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Balance, Beginning of Year | | $ | 2,537,513 | | | $ | 2,352,026 | | | $ | 2,325,826 | |
| Acquisition, Construction Costs and Improvements | | | 810,266 | | | | 493,012 | | | | 302,720 | |
| Disposition of Assets | | | (403,651 | ) | | | (288,433 | ) | | | (276,520 | ) |
| Write-off of Fully Depreciated Assets | | | (29,212 | ) | | | (19,092 | ) | | | — | |
| | | | | | | | | | | | | |
| Balance, End of Year | | $ | 2,914,916 | | | $ | 2,537,513 | | | $ | 2,352,026 | |
| | | | | | | | | | | | | |
The changes in accumulated depreciation for the three years ended December 31, 2005 are as follows:
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| |
| Balance, Beginning of Year | | $ | 323,493 | | | $ | 295,688 | | | $ | 263,404 | |
| Depreciation for Year | | | 86,587 | | | | 71,779 | | | | 63,281 | |
| Disposition of Assets | | | (24,088 | ) | | | (24,882 | ) | | | (30,997 | ) |
| Write-off of Fully Depreciated Assets | | | (28,764 | ) | | | (19,092 | ) | | | — | |
| | | | | | | | | | | | | |
| Balance, End of Year | | $ | 357,228 | | | $ | 323,493 | | | $ | 295,688 | |
| | | | | | | | | | | | | |
S-28
SIGNATURES
Pursuant to the requirements 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.
FIRST INDUSTRIAL, L.P.
| | |
| | By: | FIRST INDUSTRIAL REALTY TRUST, INC. |
as general partner
| | |
| | By: | /s/ Michael W. Brennan |
Michael W. Brennan
President, Chief Executive Officer and Director(Principal Executive Officer)
Date: March 15, 2006
| | |
| | By: | /s/ Michael J. Havala |
Michael J. Havala
Chief Financial Officer (Principal Financial Officer)
Date: March 15, 2006
Scott A. Musil
Senior Vice President, Controller,Treasurer and Assistant Secretary (Principal Accounting Officer)
Date: March 15, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| | | | | | | |
Signature | | Title | | Date |
| |
/s/ Jay H. Shidler
Jay H. Shidler
| | Chairman of the Board of Directors | | March 15, 2006 |
| | | | | |
/s/ Michael W. Brennan
Michael W. Brennan
| | President, Chief Executive Officer
and Director | | March 15, 2006 |
| | | | | |
/s/ Michael G. Damone
Michael G. Damone
| | Director of Strategic Planning
and Director | | March 15, 2006 |
S-29
| | | | | | | |
Signature | | Title | | Date |
| |
| | | | | |
/s/ Kevin W. Lynch
Kevin W. Lynch
| | Director | | March 15, 2006 |
| | | | | |
/s/ John E. Rau
John E. Rau
| | Director | | March 15, 2006 |
| | | | | |
/s/ Robert J. Slater
Robert J. Slater
| | Director | | March 15, 2006 |
| | | | | |
/s/ W. Edwin Tyler
W. Edwin Tyler
| | Director | | March 15, 2006 |
| | | | | |
/s/ J. Steven Wilson
J. Steven Wilson
| | Director | | March 15, 2006 |
| | | | | |
/s/ James F. Millar
James F. Millar
| | Director | | March 15, 2006 |
S-30
