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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-152653
CB RICHARD ELLIS REALTY TRUST
Supplement No. 2 dated June 10, 2010
to the Prospectus dated April 28, 2010
This Supplement No. 2 supersedes and replaces the following prior supplement to our prospectus dated April 28, 2010: Supplement No. 1 dated May 17, 2010. This Supplement No. 2 provides information that shall be deemed part of, and must be read in conjunction with, the prospectus and the additional information incorporated by reference herein and described under the heading “Incorporation by Reference” in this Supplement No. 2. Capitalized terms used in this Supplement No. 2 have the same meanings in the prospectus unless otherwise stated herein. The terms “we,” “our,” “us” and CBRE REIT include CB Richard Ellis Realty Trust and its subsidiaries.
| Supplement No. 2 Page No. | Prospectus Page No. | |||
| 1 | 1 | |||
| 1 | 98-99 | |||
| 2 | 99 | |||
| 2-13 | 65-81 | |||
| 13 | 86-90 | |||
| 14 | 46-47 | |||
| 14-17 | 48-52 | |||
| 17 | 89-90 | |||
| 17-18 | 148-149 | |||
| 18 | 150 | |||
| 18 | F-2 |
Status of Our Current Offering
Our registration statement on Form S-11 relating to this public offering was declared effective by the Securities and Exchange Commission, or the SEC, on January 30, 2009. From January 30, 2009 through March 31, 2010, we have accepted subscriptions from 15,198 investors and issued 55,915,722 common shares pursuant to this public offering, which includes 2,119,426 common shares issued pursuant to our dividend reinvestment plan, and received gross offering proceeds of approximately $558,098,008. As of March 31, 2010, approximately $2,441,901,992 in common shares were available to be offered and sold in this public offering. As of May 18, 2010, 128,813,884 common shares were issued and outstanding. Unless extended, this public offering will not last beyond January 30, 2011 (which is two years after the date of the original prospectus dated January 30, 2009). In certain states, we will be required to renew this registration statement or file a new registration statement to extend the offering beyond this date. If we continue our offering beyond two years from the date of our original prospectus, we will provide that information in a prospectus supplement. We reserve the right to terminate this offering at any time.
Fees Paid in Connection with Our Offerings
For the three months ended March 31, 2010 and the year ended December 31, 2009, our Dealer Manager earned the following fees:
| Three Months Ended March 31, 2010 | Year Ended December 31, 2009 | |||||||||||
| Earned(1) | Payable(2) | Earned(1) | Payable(2) | |||||||||
Selling commissions | $ | 7,254,000 | $ | 287,000 | $ | 23,204,000 | $ | 347,000 | ||||
Dealer manager fees | $ | 2,767,000 | $ | 519,000 | $ | 8,359,000 | $ | 412,000 | ||||
Marketing support fees | $ | 1,109,000 | $ | 118,000 | $ | 3,462,000 | $ | 111,000 | ||||
| (1) | Earned represents the amount expensed on an accrual basis for services provided by the Dealer Manager during the period. |
| (2) | Payable represents the total unpaid amount due on an accrual basis to the Dealer Manager for services provided as of the balance sheet date specified. |
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For the three months ended March 31, 2010 and the year ended December 31, 2009, our Dealer Manager and our Investment Advisor and/or its affiliates earned the following other offering costs:
| Three Months Ended March 31, 2010 | Year Ended December 31, 2009 | |||||||||||
| Earned(1) | Payable(2) | Earned(3) | Payable(4) | |||||||||
Other Offering Costs | $ | 285,000 | $ | 226,000 | $ | 1,426,000 | $ | 244,000 | ||||
| (1) | Included in the other offering costs earned is $240,000 and $45,000 for the Dealer Manager and the Investment Advisor, respectively. |
| (2) | Included in the payable amount is $226,000 due to the Dealer Manager as of the balance sheet date specified. |
| (3) | Included in the other offering costs earned is $1,266,000 and $160,000 for the Dealer Manager and the Investment Advisor, respectively. |
| (4) | Included in the payable amount is $243,000 and $1,000 due to the Dealer Manager and our Investment Advisor, respectively, as of the balance sheet date specified. |
Fees Paid in Connection with Our Operations
For the three months ended March 31, 2010 and the year ended December 31, 2009, our Investment Advisor and/or its affiliates earned the following fees:
| Three Months Ended March 31, 2010 | Year Ended December 31, 2009 | |||||||||||
| Earned(1) | Payable(2) | Earned(1) | Payable(2) | |||||||||
Acquisition fees and expenses(3) | $ | 338,000 | $ | 338,000 | $ | 4,826,000 | $ | — | ||||
Investment management fees(4) | $ | 2,431,000 | $ | 805,000 | $ | 7,803,000 | $ | 757,000 | ||||
Property management fees | $ | 164,000 | $ | 116,000 | $ | 656,000 | $ | 106,000 | ||||
| (1) | Earned represents the amount expensed on an accrual basis for services provided by the Investment Advisor during the period. |
| (2) | Payable represents the unpaid amount due on an accrual basis to the Investment Advisor for services provided. |
| (3) | In connection with services provided to the Investment Advisor, the Sub-Advisor, pursuant to a sub-advisory agreement, was paid $55,000 and $820,000 by the Investment Advisor for the three months ended March 31, 2010 and the year ended December 31, 2009, respectively. |
| (4) | The Investment Advisor did not waive any investment management fees for the three months ended March 31, 2010 or the year ended December 31, 2009.In connection with services provided to the Investment Advisor, the Sub-Advisor, pursuant to a sub-advisory agreement, was paid $336,000 and $1,078,000 by the Investment Advisor for the three months ended March 31, 2010 and the year ended December 31, 2009, respectively. |
No mortgage banking fees were paid to CBRE Capital Markets, an affiliate of the Investment Advisor, for the three months ended March 31, 2010 or for the year ended December 31, 2009. Leasing and brokerage fees aggregating $95,000 and $198,000 were paid to the Investment Advisor or its affiliates for the three months ended March 31, 2010 and the year ended December 31, 2009, respectively. In addition, no management services fees were paid to CB Richard Ellis, UK, an affiliate of the Investment Advisor, for the three months ended March 31, 2010.
This section contains certain information that supplements and updates the information under the section “Real Estate Investments,” which begins on page 53 of our prospectus.
Properties
As of March 31, 2010, we owned, on a consolidated basis, 58 office, retail, and industrial (primarily warehouse/distribution) properties located in ten states (California, Florida, Georgia, Illinois, Massachusetts, Minnesota, North Carolina, South Carolina, Texas and Virginia) and in the United Kingdom, encompassing approximately 8,407,000 rentable square feet, as well as one undeveloped land parcel in Georgia. Our properties previously held for sale have been transferred to continuing operations. Our consolidated properties were approximately 81.15% leased (based upon square feet) as of March 31, 2010. As of March 31, 2010, certain of our consolidated properties were subject to mortgage debt, a description of which is set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, which is incorporated herein by reference.
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In addition, we have ownership interests in three unconsolidated entities that, as of March 31, 2010, owned interests in 27 properties. Excluding those properties owned through our investment in CBRE Strategic Partners Asia, we owned, on an unconsolidated basis, 18 industrial, office and retail properties located in seven states (Arizona, Florida, Indiana, North Carolina, Ohio, Tennessee and Texas) encompassing approximately 7,392,000 rentable square feet. Our unconsolidated properties were approximately 99.77% leased (based upon square feet) as of March 31, 2010. As of March 31, 2010, certain of our unconsolidated properties were subject to mortgage debt, a description of which is set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, which is incorporated herein by reference.
The average effective annual rents for our industrial properties, office properties and retail properties were approximately $40,386,000, $38,407,000 and $8,085,000, as of March 31, 2010, respectively.
The following table provides information relating to our properties, excluding those owned through our investment in CBRE Strategic Partners Asia, as of March 31, 2010. These properties consisted of 50 industrial properties, encompassing 13,117,000 rentable square feet, 23 office properties, encompassing 2,185,000 rentable square feet and three retail properties, encompassing 497,000 rentable square feet.
Property and Market | Date Acquired | Year Built | Property Type | Our Effective Ownership | Net Rentable Square Feet (in thousands) | Percentage Leased | Approximate Total Acquisition Cost(1) (in thousands) | ||||||||||
Domestic Consolidated Properties: | |||||||||||||||||
REMEC Corporate Campus 1 | 9/15/2004 | 1983 | Office | 100.00 | % | 34 | 100.00 | % | $ | 6,833 | |||||||
REMEC Corporate Campus 2 | 9/15/2004 | 1983 | Office | 100.00 | % | 30 | 100.00 | % | 6,125 | ||||||||
REMEC Corporate Campus 3 | 9/15/2004 | 1983 | Office | 100.00 | % | 37 | 100.00 | % | 7,523 | ||||||||
REMEC Corporate Campus 4 | 9/15/2004 | 1983 | Office | 100.00 | % | 31 | 100.00 | % | 6,186 | ||||||||
300 Constitution Drive | 11/3/2004 | 1998 | Warehouse/Distribution | 100.00 | % | 330 | 100.00 | % | 19,805 | ||||||||
Deerfield Commons(2) | 6/21/2005 | 2000 | Office | 100.00 | % | 122 | 95.48 | % | 21,834 | ||||||||
505 Century(3) | 1/9/2006 | 1997 | Warehouse/Distribution | 100.00 | % | 100 | 72.40 | % | 6,095 | ||||||||
631 International(3) | 1/9/2006 | 1998 | Warehouse/Distribution | 100.00 | % | 73 | 100.00 | % | 5,407 | ||||||||
660 North Dorothy(3) | 1/9/2006 | 1997 | Warehouse/Distribution | 100.00 | % | 120 | 97.29 | % | 6,836 | ||||||||
Bolingbrook Point III | 8/29/2007 | 2006 | Warehouse/Distribution | 100.00 | % | 185 | 100.00 | % | 18,170 | ||||||||
Cherokee Corporate Park(3) | 8/30/2007 | 2000 | Warehouse/Distribution | 100.00 | % | 60 | 100.00 | % | 3,775 | ||||||||
Community Cash Complex 1(3) | 8/30/2007 | 1960 | Warehouse/Distribution | 100.00 | % | 205 | 35.26 | % | 2,690 | ||||||||
Community Cash Complex 2(3) | 8/30/2007 | 1978 | Warehouse/Distribution | 100.00 | % | 145 | 35.07 | % | 2,225 | ||||||||
Community Cash Complex 3(3) | 8/30/2007 | 1981 | Warehouse/Distribution | 100.00 | % | 116 | 100.00 | % | 1,701 | ||||||||
Community Cash Complex 4(3) | 8/30/2007 | 1984 | Warehouse/Distribution | 100.00 | % | 33 | 100.00 | % | 547 | ||||||||
Community Cash Complex 5(3) | 8/30/2007 | 1984 | Warehouse/Distribution | 100.00 | % | 53 | 84.85 | % | 824 | ||||||||
Fairforest Building 1(3) | 8/30/2007 | 2000 | Manufacturing | 100.00 | % | 51 | 100.00 | % | 2,974 | ||||||||
Fairforest Building 2(3) | 8/30/2007 | 1999 | Manufacturing | 100.00 | % | 104 | 100.00 | % | 5,379 | ||||||||
Fairforest Building 3(3) | 8/30/2007 | 2000 | Manufacturing | 100.00 | % | 100 | 100.00 | % | 5,760 | ||||||||
Fairforest Building 4(3) | 8/30/2007 | 2001 | Manufacturing | 100.00 | % | 101 | 100.00 | % | 5,640 | ||||||||
Fairforest Building 5 | 8/30/2007 | 2006 | Warehouse/Distribution | 100.00 | % | 316 | 100.00 | % | 16,968 | ||||||||
Fairforest Building 6 | 8/30/2007 | 2005 | Manufacturing | 100.00 | % | 101 | 100.00 | % | 7,469 | ||||||||
Fairforest Building 7(3) | 8/30/2007 | 2006 | Warehouse/Distribution | 100.00 | % | 101 | 0.00 | % | 5,626 | ||||||||
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Property and Market | Date Acquired | Year Built | Property Type | Our Effective Ownership | Net Rentable Square Feet (in thousands) | Percentage Leased | Approximate Total Acquisition Cost(1) (in thousands) | |||||||||
Greenville/Spartanburg Industrial Park(3) | 8/30/2007 | 1990 | Manufacturing | 100.00 | % | 67 | 100.00 | % | 3,388 | |||||||
Highway 290 Commerce Park Building 1(3) | 8/30/2007 | 1995 | Warehouse/Distribution | 100.00 | % | 150 | 100.00 | % | 5,388 | |||||||
Highway 290 Commerce Park Building 5(3) | 8/30/2007 | 1993 | Warehouse/Distribution | 100.00 | % | 30 | 100.00 | % | 1,420 | |||||||
Highway 290 Commerce Park Building 7(3) | 8/30/2007 | 1994 | Warehouse/Distribution | 100.00 | % | 88 | 0.00 | % | 4,889 | |||||||
HJ Park Building 1 | 8/30/2007 | 2003 | Manufacturing | 100.00 | % | 70 | 100.00 | % | 4,216 | |||||||
Jedburg Commerce Park(3) | 8/30/2007 | 2007 | Manufacturing | 100.00 | % | 513 | 100.00 | % | 41,991 | |||||||
Kings Mountain I | 8/30/2007 | 1998 | Warehouse/Distribution | 100.00 | % | 100 | 100.00 | % | 5,497 | |||||||
Kings Mountain II | 8/30/2007 | 2002 | Warehouse/Distribution | 100.00 | % | 302 | 100.00 | % | 11,311 | |||||||
Mount Holly Building | 8/30/2007 | 2003 | Warehouse/Distribution | 100.00 | % | 101 | 100.00 | % | 6,208 | |||||||
North Rhett I | 8/30/2007 | 1973 | Warehouse/Distribution | 100.00 | % | 285 | 100.00 | % | 10,302 | |||||||
North Rhett II | 8/30/2007 | 2001 | Warehouse/Distribution | 100.00 | % | 102 | 0.00 | % | 7,073 | |||||||
North Rhett III | 8/30/2007 | 2002 | Warehouse/Distribution | 100.00 | % | 80 | 100.00 | % | 4,812 | |||||||
North Rhett IV | 8/30/2007 | 2005 | Warehouse/Distribution | 100.00 | % | 316 | 100.00 | % | 17,060 | |||||||
Orangeburg Park Building | 8/30/2007 | 2003 | Warehouse/Distribution | 100.00 | % | 101 | 100.00 | % | 5,474 | |||||||
Orchard Business Park 2(3) | 8/30/2007 | 1993 | Warehouse/Distribution | 100.00 | % | 18 | 100.00 | % | 761 | |||||||
Union Cross Building I | 8/30/2007 | 2005 | Warehouse/Distribution | 100.00 | % | 101 | 100.00 | % | 6,585 | |||||||
Union Cross Building II | 8/30/2007 | 2005 | Warehouse/Distribution | 100.00 | % | 316 | 0.00 | % | 17,216 | |||||||
Highway 290 Commerce Park Building 2(3) | 9/24/2007 | 1995 | Warehouse/Distribution | 100.00 | % | 100 | 100.00 | % | 4,626 | |||||||
Highway 290 Commerce Park Building 6(3) | 11/1/2007 | 1996 | Warehouse/Distribution | 100.00 | % | 105 | 0.00 | % | 3,760 | |||||||
Orchard Business Park 1(3) | 11/1/2007 | 1994 | Warehouse/Distribution | 100.00 | % | 33 | 100.00 | % | 1,378 | |||||||
Lakeside Office Center | 3/5/2008 | 2006 | Office | 100.00 | % | 99 | 95.26 | % | 17,994 | |||||||
Kings Mountain III(3) | 3/14/2008 | 2007 | Warehouse/Distribution | 100.00 | % | 542 | 0.00 | % | 25,728 | |||||||
Enclave on the Lake | 7/1/2008 | 1999 | Office | 100.00 | % | 171 | 100.00 | % | 37,827 | |||||||
Avion Midrise III | 11/18/2008 | 2002 | Office | 100.00 | % | 71 | 100.00 | % | 21,111 | |||||||
Avion Midrise IV | 11/18/2008 | 2002 | Office | 100.00 | % | 72 | 100.00 | % | 21,112 | |||||||
13201 Wilfred(3) | 6/29/2009 | 1999 | Warehouse/Distribution | 100.00 | % | 335 | 100.00 | % | 15,340 | |||||||
3011, 3055 & 3077 Comcast Place(3) | 7/1/2009 | 1988 | Office | 100.00 | % | 220 | 100.00 | % | 49,000 | |||||||
140 Depot Street(3) | 7/31/2009 | 2007 | Warehouse/Distribution | 100.00 | % | 238 | 100.00 | % | 18,950 | |||||||
12650 Ingenuity Drive | 8/5/2009 | 1999 | Office | 100.00 | % | 125 | 100.00 | % | 25,350 | |||||||
Crest Ridge Corporate Center 1(3) | 8/17/2009 | 2009 | Office | 100.00 | % | 116 | 100.00 | % | 28,419 | |||||||
West Point Trade Center(3)(4) | 12/30/2009 | 2009 | Warehouse/Distribution | 100.00 | % | 602 | 100.00 | % | 29,000 | |||||||
Total Domestic Consolidated Properties |
| 8,117 | 81.15 | % | 619,578 | |||||||||||
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Property and Market | Date Acquired | Year Built | Property Type | Our Effective Ownership | Net Rentable Square Feet (in thousands) | Percentage Leased | Approximate Total Acquisition Cost(1) (in thousands) | ||||||||||
International Consolidated Properties: | |||||||||||||||||
602 Central Blvd.(3) | 4/27/2007 | 2001 | Office | 100.00 | % | 50 | 0.00 | % | 23,847 | ||||||||
Thames Valley Five | 3/20/2008 | 1998 | Office | 100.00 | % | 40 | 100.00 | % | 29,572 | ||||||||
Albion Mills Retail Park | 7/11/2008 | 2000 | Retail | 100.00 | % | 55 | 100.00 | % | 22,098 | ||||||||
Maskew Retail Park | 10/23/2008 | 2007 | Retail | 100.00 | % | 145 | 100.00 | % | 53,740 | ||||||||
Total International Consolidated Properties |
| 290 | 82.77 | % | 129,257 | ||||||||||||
Total Consolidated Properties |
| 8,407 | 81.20 | % | 748,835 | ||||||||||||
Unconsolidated Properties(5): | |||||||||||||||||
Buckeye Logistics Center(6) | 6/12/2008 | 2008 | Warehouse/Distribution | 80.00 | % | 605 | 100.00 | % | 35,573 | ||||||||
Afton Ridge Shopping Center(7) | 9/18/2008 | 2007 | Retail | 90.00 | % | 296 | 94.33 | % | 44,621 | ||||||||
AllPoints at Anson Bldg. 1(6) | 9/30/2008 | 2008 | Warehouse/Distribution | 80.00 | % | 631 | 100.00 | % | 27,150 | ||||||||
12200 President’s Court(6) | 9/30/2008 | 2008 | Warehouse/Distribution | 80.00 | % | 772 | 100.00 | % | 29,995 | ||||||||
201 Sunridge Blvd.(6) | 9/30/2008 | 2008 | Warehouse/Distribution | 80.00 | % | 823 | 100.00 | % | 25,690 | ||||||||
Aspen Corporate Center 500(6) | 9/30/2008 | 2008 | Office | 80.00 | % | 180 | 100.00 | % | 30,033 | ||||||||
125 Enterprise Parkway(6) | 12/10/2008 | 2008 | Warehouse/Distribution | 80.00 | % | 1,142 | 100.00 | % | 38,088 | ||||||||
AllPoints Midwest Bldg. I(6) | 12/10/2008 | 2008 | Warehouse/Distribution | 80.00 | % | 1,200 | 100.00 | % | 41,428 | ||||||||
Celebration Office Center(3)(6) | 5/13/2009 | 2009 | Office | 80.00 | % | 101 | 100.00 | % | 13,640 | ||||||||
22535 Colonial Pkwy(3)(6) | 5/13/2009 | 2009 | Office | 80.00 | % | 90 | 100.00 | % | 11,596 | ||||||||
Fairfield Distribution Ctr. IX(3)(6) | 5/13/2009 | 2008 | Warehouse/Distribution | 80.00 | % | 136 | 100.00 | % | 7,151 | ||||||||
Northpoint III(3)(4)(6) | 10/15/2009 | 2001 | Office | 80.00 | % | 108 | 100.00 | % | 14,592 | ||||||||
Goodyear Crossing Ind. Park II(3)(4)(6) | 12/07/2009 | 2009 | Warehouse/Distribution | 80.00 | % | 820 | 100.00 | % | 36,516 | ||||||||
3900 North Paramount Parkway(3)(4)(6) | 3/31/2010 | 1999 | Office | 80.00 | % | 101 | 100.00 | % | 11,176 | ||||||||
3900 South Paramount Parkway(3)(4)(6) | 3/31/2010 | 1999 | Office | 80.00 | % | 119 | 100.00 | % | 13,055 | ||||||||
1400 Perimeter Park Drive(3)(4)(6) | 3/31/2010 | 1991 | Office | 80.00 | % | 45 | 100.00 | % | 3,970 | ||||||||
Miramar I(3)(4)(6)(8) | 3/31/2010 | 2001 | Office | 80.00 | % | 94 | 100.00 | % | 13,645 | ||||||||
Miramar II(3)(4)(6)(8) | 3/31/2010 | 2001 | Office | 80.00 | % | 129 | 100.00 | % | 20,899 | ||||||||
Total Unconsolidated Properties(5) |
| 7,392 | 99.77 | % | 418,818 | ||||||||||||
Total Properties(5) |
| 15,799 | 89.89 | % | $ | 1,167,653 | |||||||||||
| (1) | Approximate total acquisition cost represents the pro rata purchase price inclusive of customary closing costs and acquisition fees/expenses. |
| (2) | Includes undeveloped land zoned for future use. |
| (3) | This property is unencumbered and not secured by mortgage debt. |
| (4) | The estimated acquisition cap rates for West Point Trade Center, Northpoint III, Goodyear Crossing Ind. Park II, 3900 North Paramount Parkway, 3900 South Paramount Parkway, 1400 Perimeter Park Drive, Miramar I and Miramar II were 8.2%, 8.7%, 9.1%, 9.3%, 9.3%, 9.3%, 10.1% and 10.1%, respectively. Acquisition cap rate equals annualized in-place net operating income divided by total acquisition cost for the property. Annualized in-place net operating income equals, on an annualized cash basis as derived from leases in-place at the time we acquire the property, rental income and tenant reimbursements less property and related expenses (operating maintenance, management fees and real estate taxes) and excludes other non-property income and expenses, interest expense, depreciation and amortization and our company-level general and administrative expenses. |
| (5) | Does not include CBRE Strategic Partners Asia properties. |
| (6) | This property is held through the Duke joint venture. |
| (7) | This property is held through the Afton Ridge joint venture. |
| (8) | Consolidated properties acquired on December 31, 2009 and contributed to the Duke joint venture. |
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International Properties—Unconsolidated
CBRE Strategic Partners Asia
Our capital commitment is currently being pledged as collateral for borrowings of CBRE Strategic Partners Asia of which our pro-rata portion of such borrowings was approximately $2,903,000 based on our 5.07% ownership interest in CBRE Strategic Partners Asia at March 31, 2010. Our share of investment management and acquisition fees paid to the Investment Manager were approximately $75,000 and $0, respectively, for the three months ended March 31, 2010. Through March 31, 2010, we had paid no fees to our Investment Advisor relating to this investment. Through March 31, 2010, we contributed $11,514,000 of our $20,000,000 CBRE Strategic Partners Asia capital commitment which was funded using net proceeds from our offering.
Property Type Concentration
Our property type concentrations as of March 31, 2010 are as follows (Net Rentable Square Feet and Approximate Total Acquisition Cost in thousands):
| Consolidated Properties | Unconsolidated Properties(1) | Consolidated & Unconsolidated Properties(1) | |||||||||||||||||||
Property Type | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | ||||||||||||
Warehouse/Distribution | 34 | 5,881 | $ | 293,447 | 8 | 6,129 | $ | 241,591 | 42 | 12,010 | $ | 535,038 | |||||||||
Office | 14 | 1,218 | 302,733 | 9 | 967 | 132,606 | 23 | 2,185 | 435,339 | ||||||||||||
Retail | 2 | 201 | 75,838 | 1 | 296 | 44,621 | 3 | 497 | 120,459 | ||||||||||||
Manufacturing | 8 | 1,107 | 76,817 | — | — | — | 8 | 1,107 | 76,817 | ||||||||||||
Total | 58 | 8,407 | $ | 748,835 | 18 | 7,392 | $ | 418,818 | 76 | 15,799 | $ | 1,167,653 | |||||||||
| (1) | Number of Properties and Net Rentable Square Feet for Unconsolidated Properties are at 100%. Approximate Total Acquisition Cost for Unconsolidated Properties is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia. |
Geographic Concentration
Our geographic concentrations as of March 31, 2010 are as follows (Net Rentable Square Feet and Approximate Total Acquisition Cost in thousands):
| Consolidated Properties | Unconsolidated Properties(1) | Consolidated & Unconsolidated Properties(1) | |||||||||||||||||||
Domestic | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | ||||||||||||
South Carolina | 29 | 3,647 | $ | 184,324 | — | — | $ | — | 29 | 3,647 | $ | 184,324 | |||||||||
Texas | 2 | 725 | 54,350 | 6 | 1,340 | 99,922 | 8 | 2,065 | 154,272 | ||||||||||||
North Carolina | 5 | 1,360 | 66,337 | 4 | 561 | 72,822 | 9 | 1,921 | 139,159 | ||||||||||||
Florida | 5 | 563 | 74,159 | 2 | 913 | 37,286 | 7 | 1,476 | 111,445 | ||||||||||||
California | 5 | 352 | 75,667 | — | — | — | 5 | 352 | 75,667 | ||||||||||||
Indiana | — | — | — | 2 | 1,425 | 72,089 | 2 | 1,425 | 72,089 | ||||||||||||
Minnesota | — | — | — | 2 | 1,831 | 68,578 | 2 | 1,831 | 68,578 | ||||||||||||
Virginia | 2 | 452 | 43,759 | — | — | — | 2 | 452 | 43,759 | ||||||||||||
Massachusetts | 2 | 143 | 42,223 | — | — | — | 2 | 143 | 42,223 | ||||||||||||
Ohio | 2 | 568 | 38,755 | — | — | — | 2 | 568 | 38,755 | ||||||||||||
Arizona | — | — | — | 1 | 1,142 | 38,088 | 1 | 1,142 | 38,088 | ||||||||||||
Tennessee | — | — | — | 1 | 180 | 30,033 | 1 | 180 | 30,033 | ||||||||||||
Georgia | 1 | 122 | 21,834 | — | — | — | 1 | 122 | 21,834 | ||||||||||||
Illinois | 1 | 185 | 18,170 | — | — | — | 1 | 185 | 18,170 | ||||||||||||
Total Domestic | 54 | 8,117 | 619,578 | 18 | 7,392 | 418,818 | 72 | 15,509 | 1,038,396 | ||||||||||||
International | |||||||||||||||||||||
United Kingdom | 4 | 290 | 129,257 | — | — | — | 4 | 290 | 129,257 | ||||||||||||
Total | 58 | 8,407 | $ | 748,835 | 18 | 7,392 | $ | 418,818 | 76 | 15,799 | $ | 1,167,653 | |||||||||
| (1) | Number of Properties and Net Rentable Square Feet for Unconsolidated Properties are at 100%. Approximate Total Acquisition Cost for Unconsolidated Properties is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia. |
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Significant Tenants
The following table details our largest tenants as of March 31, 2010 (in thousands):
| Consolidated Properties | Unconsolidated Properties(1) | Consolidated & Unconsolidated Properties(1) | |||||||||||||||||
Tenant | Primary Industry | Net Rentable Square Feet | Annualized Base Rent | Net Rentable Square Feet | Annualized Base Rent | Net Rentable Square Feet | Annualized Base Rent | ||||||||||||
1 | Amazon.com(2) | Internet Retail | — | $ | — | 2,056 | $ | 7,705 | 2,056 | $ | 7,705 | ||||||||
2 | Comcast | Telecommunications | 220 | 4,578 | — | — | 220 | 4,578 | |||||||||||
3 | SBM Offshore(3) | Petroleum and Mining | 171 | 4,277 | — | — | 171 | 4,277 | |||||||||||
4 | Unilever(4) | Consumer Products | — | — | 1,595 | 3,864 | 1,595 | 3,864 | |||||||||||
5 | PPD Development | Pharmaceutical and Health Care Related | — | — | 251 | 3,616 | 251 | 3,616 | |||||||||||
6 | Prime Distribution Services | Logistics and Distribution | — | — | 1,200 | 2,958 | 1,200 | 2,958 | |||||||||||
7 | American LaFrance | Vehicle Related Manufacturing | 513 | 2,892 | — | — | 513 | 2,892 | |||||||||||
8 | Kellogg’s | Consumer Product | — | — | 1,142 | 2,817 | 1,142 | 2,817 | |||||||||||
9 | B&Q | Home Furnishings/ Home Improvement | 104 | 2,536 | — | — | 104 | 2,536 | |||||||||||
10 | Regus Business Centers | Executive Office Suites | 86 | 2,489 | — | — | 86 | 2,489 | |||||||||||
11 | Syngenta Seed | Agriculture | 116 | 2,473 | — | — | 116 | 2,473 | |||||||||||
12 | REMEC | Defense and Aerospace | 133 | 2,448 | — | — | 133 | 2,448 | |||||||||||
13 | Dr Pepper | Food Service and Retail | 602 | 2,388 | — | — | 602 | 2,388 | |||||||||||
14 | US General Services Administration | Government | 72 | 2,197 | — | — | 72 | 2,197 | |||||||||||
15 | Verizon Wireless(5) | Telecommunications | — | — | 180 | 2,181 | 180 | 2,181 | |||||||||||
16 | Royal Caribbean | Travel/Leisure | — | — | 129 | 2,097 | 129 | 2,097 | |||||||||||
17 | Kaplan(6) | Education | 125 | 2,054 | — | — | 125 | 2,054 | |||||||||||
18 | Best Buy | Specialty Retail | 238 | 1,657 | 30 | 317 | 268 | 1,974 | |||||||||||
19 | Lockheed Martin | Defense and Aerospace | 72 | 1,793 | — | — | 72 | 1,793 | |||||||||||
20 | Disney Vacation Development | Entertainment | — | — | 101 | 1,748 | 101 | 1,748 | |||||||||||
21 | DeVry | Education | — | — | 94 | 1,517 | 94 | 1,517 | |||||||||||
22 | Women’s Apparel Group | Internet Retail | 330 | 1,426 | — | — | 330 | 1,426 | |||||||||||
23 | Walgreens | Pharmaceutical and Health Care Related | 335 | 1,351 | — | — | 335 | 1,351 | |||||||||||
24 | Florida Power | Utilities | — | — | 109 | 1,280 | 109 | 1,280 | |||||||||||
25 | Echostar Satellite | Telecommunications | 316 | 1,225 | — | — | 316 | 1,225 | |||||||||||
Other (92 tenants) | 3,393 | 16,488 | 488 | 4,506 | 3,881 | 20,994 | |||||||||||||
| 6,826 | $ | 52,272 | 7,375 | $ | 34,606 | 14,201 | $ | 86,878 | |||||||||||
| (1) | Net Rentable Square Feet for Unconsolidated Properties is at 100%. Annualized Base Rent for Unconsolidated Properties is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia. |
| (2) | Our tenants are Amazon.com.azdc, Inc., in our Buckeye Logistics Center and Goodyear Crossing Park II properties, and Amazon.com.indc, LLC, in our AllPoints at Anson Bldg. 1 property, which are all wholly-owned subsidiaries of Amazon.com. |
| (3) | Our tenant is Atlantic Offshore Ltd., a wholly-owned subsidiary of SBM Offshore. |
| (4) | Our tenant is CONOPCO, Inc., a wholly-owned subsidiary of Unilever. |
| (5) | Verizon Wireless is the d/b/a for Cellco Partnership. |
| (6) | Our tenant is Iowa College Acquisitions Corp., an operating subsidiary of Kaplan, Inc. The lease is guaranteed by Kaplan Inc. |
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Tenant Industries
Our tenants operate across a wide range of industries. The following table details our tenant-industry concentrations as of March 31, 2010 (in thousands):
| Consolidated Properties | Unconsolidated Properties(1) | Consolidated & Unconsolidated Properties(1) | |||||||||||||
Primary Tenant Industry Category | Net Rentable Square Feet | Annualized Base Rent | Net Rentable Square Feet | Annualized Base Rent | Net Rentable Square Feet | Annualized Base Rent | |||||||||
Internet Retail | 330 | $ | 1,426 | 2,056 | $ | 7,708 | 2,386 | $ | 9,134 | ||||||
Consumer Products | 256 | 1,260 | 2,747 | 6,824 | 3,003 | 8,084 | |||||||||
Telecommunications | 536 | 5,811 | 180 | 2,180 | 716 | 7,991 | |||||||||
Logistics and Distribution | 614 | 2,099 | 1,337 | 3,427 | 1,951 | 5,526 | |||||||||
Pharmaceutical and Health Care Related | 357 | 1,663 | 253 | 3,652 | 610 | 5,315 | |||||||||
Home Furnishings/Home Improvement | 549 | 4,792 | 35 | 391 | 584 | 5,183 | |||||||||
Petroleum and Mining | 171 | 4,277 | — | — | 171 | 4,277 | |||||||||
Defense and Aerospace | 204 | 4,241 | — | — | 204 | 4,241 | |||||||||
Vehicle Related Manufacturing | 750 | 4,033 | — | — | 750 | 4,033 | |||||||||
Travel and Leisure | — | — | 231 | 3,845 | 231 | 3,845 | |||||||||
Education | 125 | 2,054 | 94 | 1,517 | 219 | 3,571 | |||||||||
Food Service and Retail | 743 | 3,221 | 14 | 278 | 757 | 3,499 | |||||||||
Specialty Retail | 284 | 2,716 | 75 | 712 | 359 | 3,428 | |||||||||
Business Services | 474 | 1,986 | 103 | 1,196 | 577 | 3,182 | |||||||||
Other Manufacturing | 906 | 3,126 | — | — | 906 | 3,126 | |||||||||
Executive Office Suites | 86 | 2,489 | — | — | 86 | 2,489 | |||||||||
Agriculture | 116 | 2,472 | — | — | 116 | 2,472 | |||||||||
Government | 72 | 2,197 | — | — | 72 | 2,197 | |||||||||
Financial Services | 182 | 1,607 | — | — | 182 | 1,607 | |||||||||
Utilities | — | — | 108 | 1,280 | 108 | 1,280 | |||||||||
Apparel Retail | — | — | 91 | 832 | 91 | 832 | |||||||||
Professional Services | 50 | 679 | 6 | 124 | 56 | 803 | |||||||||
Other Retail | 21 | 123 | 45 | 640 | 66 | 763 | |||||||||
Total | 6,826 | $ | 52,272 | 7,375 | $ | 34,606 | 14,201 | $ | 86,878 | ||||||
| (1) | Net Rentable Square Feet for Unconsolidated Properties is at 100%. Annualized Base Rent for Unconsolidated Properties is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia. |
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Tenant Lease Expirations
The following table sets forth a schedule of expiring leases for our consolidated and unconsolidated properties as of March 31, 2010 (in thousands):
| Consolidated Properties | Unconsolidated Properties(1) | Consolidated & Unconsolidated Properties(1) | |||||||||||||
| Expiring Net Rentable Square Feet | Expiring Base Rent | Expiring Net Rentable Square Feet | Expiring Base Rent | Expiring Net Rentable Square Feet | Expiring Base Rent | ||||||||||
2010 (Nine months ending December 31, 2010) | 435 | $ | 2,312 | — | $ | — | 435 | $ | 2,312 | ||||||
2011 | 174 | 876 | — | — | 174 | 876 | |||||||||
2012 | 691 | 10,100 | 33 | 557 | 724 | 10,657 | |||||||||
2013 | 1,296 | 8,169 | 20 | 414 | 1,316 | 8,583 | |||||||||
2014 | 102 | 521 | 17 | 299 | 119 | 820 | |||||||||
2015 | 771 | 3,466 | — | — | 771 | 3,466 | |||||||||
2016 | 298 | 1,580 | 259 | 4,684 | 557 | 6,264 | |||||||||
2017 | 200 | 3,492 | 210 | 2,912 | 410 | 6,404 | |||||||||
2018 | 336 | 1,583 | 3,088 | 12,840 | 3,424 | 14,423 | |||||||||
2019 | 1,495 | 9,469 | 3,253 | 11,311 | 4,748 | 20,780 | |||||||||
2020 | 183 | 1,203 | — | — | 183 | 1,203 | |||||||||
Thereafter | 845 | 15,232 | 495 | 7,021 | 1,340 | 22,253 | |||||||||
Total | 6,826 | $ | 58,003 | 7,375 | $ | 40,038 | 14,201 | $ | 98,041 | ||||||
Weighted Average Expiration (years) | 7.91 | 9.41 | 8.52 | ||||||||||||
| (1) | Expiring Net Rentable Square Feet for Unconsolidated Properties is at 100%. Expiring Base Rent for Unconsolidated Properties is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia. |
Property Portfolio Size
Our portfolio size at the end of each quarter since commencement of our initial public offering through March 31, 2010 is as follows (Net Rentable Square Feet and Approximate Total Acquisition Cost in thousands):
| Consolidated Properties | Unconsolidated Properties(1) | Consolidated & Unconsolidated Properties(1) | |||||||||||||||||||
Cumulative Property Portfolio as of: | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | Properties | Net Rentable Square Feet | Approximate Total Acquisition Cost | ||||||||||||
9/30/2006 | 9 | 878 | $ | 86,644 | — | — | $ | — | 9 | 878 | $ | 86,644 | |||||||||
12/31/2006 | 9 | 878 | 86,644 | — | — | — | 9 | 878 | 86,644 | ||||||||||||
3/31/2007 | 9 | 878 | 86,644 | — | — | — | 9 | 878 | 86,644 | ||||||||||||
6/30/2007 | 10 | 928 | 110,491 | — | — | — | 10 | 928 | 110,491 | ||||||||||||
9/30/2007 | 42 | 5,439 | 348,456 | — | — | — | 42 | 5,439 | 348,456 | ||||||||||||
12/31/2007 | 44 | 5,576 | 353,594 | — | — | — | 44 | 5,576 | 353,594 | ||||||||||||
3/31/2008 | 47 | 6,257 | 426,856 | — | — | — | 47 | 6,257 | 426,856 | ||||||||||||
6/30/2008 | 47 | 6,257 | 426,856 | 1 | 605 | 35,636 | 48 | 6,862 | 462,492 | ||||||||||||
9/30/2008 | 49 | 6,483 | 486,777 | 6 | 3,307 | 193,773 | 55 | 9,790 | 680,550 | ||||||||||||
12/31/2008 | 52 | 6,771 | 582,682 | 8 | 5,649 | 273,205 | 60 | 12,420 | 855,887 | ||||||||||||
3/31/2009 | 52 | 6,771 | 582,717 | 8 | 5,649 | 273,130 | 60 | 12,420 | 855,847 | ||||||||||||
6/30/2009 | 53 | 7,106 | 598,103 | 11 | 5,976 | 305,308 | 64 | 13,082 | 903,411 | ||||||||||||
9/30/2009 | 57 | 7,805 | 719,822 | 11 | 5,976 | 305,202 | 68 | 13,781 | 1,025,024 | ||||||||||||
12/31/2009 | 60 | 8,630 | 791,314 | 13 | 6,904 | 356,158 | 73 | 15,534 | 1,147,472 | ||||||||||||
3/31/2010 | 58 | 8,407 | �� | 748,835 | 18 | 7,392 | 418,818 | 76 | 15,799 | 1,167,653 | |||||||||||
| (1) | Net Rentable Square Feet for unconsolidated properties is at 100%. Approximate Total Acquisition Cost is at our pro rata share of effective ownership and does not include our investment in CBRE Strategic Partners Asia. |
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Rental Operations
Our reportable segments consist of three types of commercial real estate properties for which our management internally evaluates operating performance and financial results: the Domestic Industrial Properties, Domestic Office Properties and International Office/Retail Properties. All periods presented have been revised to report our segment results under our new reportable segment structure. We evaluate the performance of our segments based on net operating income, defined as: rental income and tenant reimbursements less property and related expenses (operating and maintenance, management fees and real estate taxes) and excludes other non-property income and expenses, interest expense, depreciation and amortization, and our company-level general and administrative expenses. The following tables compare the net operating income for the three months ended March 31, 2010 and 2009 (in thousands):
| Three Months Ended March 31, | ||||||
| 2010 | 2009 | |||||
Domestic Industrial Properties | ||||||
Revenues: | ||||||
Rental | $ | 5,813 | $ | 4,686 | ||
Tenant Reimbursements | 1,258 | 1,099 | ||||
Total Revenues | 7,071 | 5,785 | ||||
Property and Related Expenses: | ||||||
Operating and Maintenance | 338 | 357 | ||||
General and Administrative | 46 | 45 | ||||
Property Management Fee to Related Party | 61 | 93 | ||||
Property Taxes | 1,431 | 1,056 | ||||
Total Expenses | 1,876 | 1,551 | ||||
Net Operating Income | 5,195 | 4,234 | ||||
Domestic Office Properties | ||||||
Revenues: | ||||||
Rental | 7,249 | 3,772 | ||||
Tenant Reimbursements | 1,579 | 761 | ||||
Total Revenues | 8,828 | 4,533 | ||||
Property and Related Expenses: | ||||||
Operating and Maintenance | 1,157 | 789 | ||||
General and Administrative | 87 | 59 | ||||
Property Management Fee to Related Party | 33 | 37 | ||||
Property Taxes | 1,190 | 610 | ||||
Total Expenses | 2,467 | 1,495 | ||||
Net Operating Income | 6,361 | 3,038 | ||||
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| Three Months Ended March 31, | ||||||||
| 2010 | 2009 | |||||||
International Office/Retail Properties | ||||||||
Revenues: | ||||||||
Rental | 1,940 | 1,884 | ||||||
Tenant Reimbursements | 81 | 86 | ||||||
Total Revenues | 2,021 | 1,970 | ||||||
Property and Related Expenses: | ||||||||
Operating and Maintenance | 80 | 81 | ||||||
General and Administrative | 35 | 53 | ||||||
Property Management Fee to Related Party | 70 | 12 | ||||||
Total Expenses | 185 | 146 | ||||||
Net Operating Income | 1,836 | 1,824 | ||||||
Reconciliation to Consolidated Net Income (Loss) | ||||||||
Total Segment Net Operating Income(1) | 13,392 | 9,096 | ||||||
Interest Expense | 3,095 | 2,807 | ||||||
General and Administrative | 671 | 886 | ||||||
Investment Management Fee to Related Party | 2,431 | 1,703 | ||||||
Acquisition Expenses | 378 | — | ||||||
Depreciation and Amortization | 7,243 | 5,722 | ||||||
| (426 | ) | (2,022 | ) | |||||
Other Income and Expenses | ||||||||
Interest and Other Income | 598 | 121 | ||||||
Net Settlement Payments on Interest Rate Swaps | (214 | ) | (81 | ) | ||||
Loss on Interest Rate Swaps and Cap | (388 | ) | (168 | ) | ||||
Loss on Note Payable at Fair Value | (73 | ) | (565 | ) | ||||
Loss on Early Extinguishment of Debt | (73 | ) | — | |||||
Loss Before Provision for Income Taxes and Equity in Income (Loss) of Unconsolidated Entities | (576 | ) | (2,715 | ) | ||||
Provision for Income Taxes | (15 | ) | (29 | ) | ||||
Equity in Income (Loss) of Unconsolidated Entities | 737 | (798 | ) | |||||
Net Income (Loss) | 146 | (3,542 | ) | |||||
Net (Income) Loss Attributable to Non-Controlling Operating Partnership Units | (1 | ) | 13 | |||||
Net Income (Loss) Attributable to CB Richard Ellis Realty Trust Shareholders | $ | 145 | $ | (3,529 | ) | |||
| (1) | Total Segment Net Operating Income is a Non-GAAP financial measure which may be useful as a supplemental measure for evaluating the relationship of each reporting segment to the combined total. This measure should not be viewed as an alternative measure of operating performance to our U.S. GAAP presentations provided. Segment “Net Operating Income” is defined as operating revenues (rental income, tenant reimbursements and other property income) less property and related expenses (property expenses, including real estate taxes) before depreciation and amortization expense. The Net Operating Income segment information presented consists of the same Net Operating Income segment information disclosed in Note 9 to our consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010. |
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The following table provides information regarding our tax basis and real estate taxes at each of our consolidated properties as of March 31, 2010:
Location | Property | Original Income Tax Basis | 2010 Real Estate Annual Taxes | ||||||
San Diego, CA | REMEC Corporate Campus | $ | 26,667,000 | $ | 311,000 | ||||
Taunton, MA | 300 Constitution Drive | 19,805,000 | 329,000 | ||||||
Alpharetta, GA | Deerfield Commons I | 19,572,000 | 299,000 | ||||||
Alpharetta, GA | Deerfield Commons II | 2,262,000 | 50,000 | ||||||
Allen, TX | 505 Century | 6,095,000 | 106,000 | ||||||
Richardson, TX | 631 International | 5,407,000 | 104,000 | ||||||
Richardson, TX | 660 North Dorothy | 6,836,000 | 115,000 | ||||||
Bolingbrook, IL | Bolingbrook Point III | 18,170,000 | 203,000 | ||||||
Spartanburg, SC | Cherokee Corporate Park | 3,775,000 | 38,000 | ||||||
Spartanburg, SC | Community Cash Complex 1-5 | 7,987,000 | 145,000 | ||||||
Spartanburg, SC | Fairforest Bldgs 1-4 | 19,753,000 | 356,000 | ||||||
Spartanburg, SC | Fairforest Bldg. 5 | 16,968,000 | 264,000 | ||||||
Spartanburg, SC | Fairforest Bldg. 6 | 7,469,000 | 160,000 | ||||||
Spartanburg, SC | Fairforest Bldg. 7 | 5,626,000 | 137,000 | ||||||
Spartanburg, SC | Greenville/Spartanburg Ind. Pk | 3,388,000 | 69,000 | ||||||
Spartanburg, SC | Highway 290 Commerce Pk Bldgs | 20,083,000 | 370,000 | ||||||
Spartanburg, SC | HJ Park Bldg. 1 | 4,216,000 | 105,000 | ||||||
Charleston, SC | Jedburg Commerce Park | 41,991,000 | 759,000 | ||||||
Charlotte, NC | Kings Mountain I | 5,497,000 | 35,000 | ||||||
Charlotte, NC | Kings Mountain II | 11,311,000 | 56,000 | ||||||
Charleston, SC | Mount Holly Building | 6,208,000 | 54,000 | ||||||
Charleston, SC | North Rhett I | 10,302,000 | 143,000 | ||||||
Charleston, SC | North Rhett II | 7,073,000 | 66,000 | ||||||
Charleston, SC | North Rhett III | 4,812,000 | 55,000 | ||||||
Charleston, SC | North Rhett IV | 17,060,000 | 224,000 | ||||||
Charleston, SC | Orangeburg Park Bldg. | 5,474,000 | 181,000 | ||||||
Spartanburg, SC | Orchard Business Park 1 & 2 | 2,139,000 | 47,000 | ||||||
Winston-Salem, NC | Union Cross Bldg. I | 6,585,000 | 178,000 | ||||||
Winston-Salem, NC | Union Cross Bldg. II | 17,216,000 | 172,000 | ||||||
Lewisville, TX | Lakeside Office Center | 17,994,000 | 252,000 | ||||||
Charlotte, NC | Kings Mountain III | 25,728,000 | 74,000 | ||||||
Houston, TX | Enclave on the Lake | 37,827,000 | 739,000 | ||||||
Washington, DC | Avion Midrise III | 21,111,000 | 259,000 | ||||||
Washington, DC | Avion Midrise IV | 21,112,000 | 261,000 | ||||||
Minneapolis, MN | 13201 Wilfred Lane | 15,340,000 | 526,000 | ||||||
Oakland, CA | 3011, 3055 & 3077 Comcast Place | 49,000,000 | 792,000 | ||||||
Boston, MA | 140 Depot Street | 18,950,000 | 290,000 | ||||||
Orlando, FL | 12650 Ingenuity Drive | 25,350,000 | 332,000 | ||||||
Minneapolis, MN | Crest Ridge Corporate Center I | 28,419,000 | 16,000 | (1) | |||||
Jacksonville, FL | West Point Trade Center | 29,000,000 | 490,000 | ||||||
Coventry, UK | 602 Central Blvd. | 23,847,000 | | N/A | | ||||
Reading, UK | Thames Valley Five | 29,572,000 | N/A | ||||||
Wakefield, UK | Albion Mills Retail Park | 22,098,000 | N/A | ||||||
Peterborough, UK | Maskew Retail Park | 53,740,000 | N/A | ||||||
Total | $ | 748,835,000 | $ | 9,162,000 | |||||
| (1) | This amount is based on the pre-construction completion assessed value of this property and a forthcoming post-construction completion date assessment is likely to increase our future annualized real-estate taxes on this property. |
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Recent Developments
On April 8, 2010, we acquired 5160 Hacienda Drive, located in Dublin, CA, in the Greater San Francisco/East Bay area. We acquired 5160 Hacienda Drive for approximately $38,500,000, exclusive of customary closing costs, using the net proceeds from this offering. Upon closing, we paid the Investment Advisor a $577,500 acquisition fee. 5160 Hacienda Drive is a 201,620 square foot corporate headquarters and research and development building that was completed in 1998. The property is 100% leased to Carl Zeiss Meditec, Inc. and guaranteed by Carl Zeiss Meditec AG, through September 2019. Carl Zeiss Meditec, Inc. is a market leader in the medical optics industry and utilizes the property as its U.S. corporate headquarters and research and development facility. The estimated acquisition cap rate for 5160 Hacienda Drive is 8.6%.(1)
On May 7, 2010, we acquired 10450 Pacific Center Court, located in San Diego. We acquired 10450 Pacific Center Court for approximately for $32,750,000, exclusive of customary closing costs, using the net proceeds from this offering. Upon closing, we paid the Investment Advisor a $491,250 acquisition fee. 10450 Pacific Center Court is a 134,000 square foot office building that was completed in 1985. The property is 100% leased to Time Warner Cable Inc. through February 2018. Time Warner Cable Inc. is one of the nation’s largest cable services providers and utilizes the property as its regional corporate headquarters for its San Diego operations. The estimated acquisition cap rate for 10450 Pacific Center Court is 7.6%.(1)
On May 26, 2010, we entered into a $70,000,000 revolving credit facility with Wells Fargo Bank, N.A., the Wells Fargo Credit Facility. The initial maturity date of the Wells Fargo Credit Facility is May 26, 2014, however we may extend the maturity date to May 26, 2015, subject to certain conditions. $15,000,000 of the Wells Fargo Credit Facility was initially drawn upon closing on May 26, 2010, with the remaining $55,000,000 available for disbursement during the term of the facility. We have the right to prepay any outstanding amount of the Wells Fargo Credit Facility, in whole or in part, without premium or penalty at any time during the term of the Wells Fargo Credit Facility, however, we generally may not reduce the outstanding principal balance below a minimum outstanding amount of $15,000,000, without reducing the total $70,000,000 Wells Fargo Credit Facility capacity. The Wells Fargo Credit Facility bears interest at a floating rate of 300 basis points over the London Interbank Offered Rate, or LIBOR, however the interest rate shall be at least 4.00% for any of the outstanding balance that is not subject to an interest rate swap with an initial term of at least two years. Upon closing on May 26, 2010, we entered into an interest rate swap agreement with Wells Fargo Bank, N.A. to effectively fix the interest rate on the initial $15,000,000 outstanding loan amount at 5.10% for the four-year term of the facility. The Wells Fargo Credit Facility is secured by our 13201 Wilfred, 3011, 3055 & 3077 Comcast Place, 140 Depot Street, Crest Ridge Corporate Center I and West Point Trade Center properties. In addition, CBRE OP provides a limited guarantee for the Wells Fargo Credit Facility. The Wells Fargo Credit Facility is subject to certain customary financial and other covenants, which we believe we were in compliance with as of May 26, 2010. A commitment fee of $1,050,000 was paid to Wells Fargo Bank, N.A. at closing. We will also pay certain other customary fees in connection with the Wells Fargo Credit Facility including fees related to the unused loan amount, extension, administrative and other fees, the amount of which in some cases is subject to certain terms and conditions.
| (1) | Acquisition cap rate equals annualized in-place net operating income divided by total acquisition cost for the property. Annualized in-place net operating income equals, on an annualized cash basis as derived from leases in-place at the time we acquire the property, rental income and tenant reimbursements less property and related expenses (operating maintenance, management fees and real estate taxes) and excludes other non-property income and expenses, interest expense, depreciation and amortization and our company-level general and administrative expenses. |
This section updates the ages of certain of the executive officers of our Investment Advisor included under the section “The Investment Advisor,” which begins on page 73 of our prospectus.
The executive officers of the Investment Advisor are as follows:
Name | Age | Position | ||
Jack A. Cuneo | 62 | President and Chief Executive Officer | ||
Laurie E. Romanak | 50 | Managing Director | ||
Douglas J. Herzbrun | 55 | Managing Director/Global Head of Research | ||
Philip L. Kianka | 53 | Director of Operations | ||
Christopher B. Allen | 42 | Director of Finance | ||
Nickolai S. Dolya | 33 | Director of Capital Markets | ||
Charles W. Hessel | 39 | Director of Investments | ||
Hugh S. O’Beirne | 39 | Senior Counsel | ||
Brian D. Welcker | 60 | Director of Asset Management | ||
G. Eric Fraser | 59 | Director of Accounting |
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This section contains certain information that supplements and updates the information under the section “Distribution Policy,” which begins on page 37 of our prospectus.
The following table presents total distributions declared and paid and distributions per share:
2010 Quarters | First | ||
Total distributions declared and paid | $ | 16,841,000 | |
Distributions per share | $ | 0.15 | |
Amount of distributions per share funded by cash flows provided by operating entities | $ | 0.1212 | |
Amount of distributions per share funded by uninvested proceeds from financings of our properties | $ | 0.0288 | |
2009 Quarters | First | Second | Third | Fourth | ||||||||
Total distributions declared and paid | $ | 10,066,000 | $ | 11,181,000 | $ | 12,767,000 | $ | 14,750,000 | ||||
Distributions per share | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | ||||
Amount of distributions per share funded by cash flows provided by operating entities | $ | 0.0903 | $ | 0.0643 | $ | 0.1309 | $ | 0.0434 | ||||
Amount of distributions per share funded by uninvested proceeds from financings of our properties | $ | 0.0597 | $ | 0.0857 | $ | 0.0191 | $ | 0.1066 | ||||
For the quarter ended March 31, 2010, distributions were funded 80.79% by cash flows provided by operating activities and 19.21% from uninvested proceeds from financings of our properties. In addition, distributions totaling $6,197,000 were reinvested in our common shares pursuant to our dividend reinvestment plan during the quarter ended March 31, 2010.
Our 2009 distributions were funded 53.78% by cash flows provided by operating activities and 46.22% from uninvested proceeds from financings of our properties. In addition, distributions totaling $17,600,000 were reinvested in our common shares pursuant to our dividend reinvestment plan during 2009.
Our board of trustees has approved a quarterly distribution to shareholders of $0.15 per common share for the second quarter of 2010. The distribution will be calculated on a daily basis and paid on July 16, 2010 to shareholders of record during the period from April 1, 2010 through and including June 30, 2010.
Summary Selected Financial Data
This section supersedes the information under the section “Summary Selected Financial Data,” which begins on page 39 of our prospectus.
Summary Selected Financial and Operating Data
The following table sets forth summary selected financial and operating data on a consolidated basis for our company. You should read the following summary selected financial data in conjunction with our consolidated historical financial statements and the related notes and with “Management Discussion and Analysis of Financial Conditions and Results of Operations,” which are included in our incorporated documents.
The summary historical consolidated balance sheet information as of March 31, 2010 and 2009, December 31, 2009, 2008, 2007, 2006, 2005 and 2004 as well as the summary historical consolidated statement of operations information for the three months ended March 31, 2010 and March 31, 2009 and for the periods ended December 31, 2009, 2008, 2007, 2006, 2005 and 2004 have been derived from our historical consolidated financial statements.
Our unaudited summary selected pro forma consolidated financial data is presented for the year ended December 31, 2009. Our unaudited summary selected pro forma consolidated statements of operations data for the year ended December 31, 2009 are based on our historical consolidated statements of operations and gives effect to the acquisitions of the following properties as if they were acquired on January 1, 2009 for (i) the 13201 Wilfred Lane property which was acquired on June 29, 2009, (ii) the 3011, 3055, 3077 Comcast Place property which was acquired on July 1, 2009, (iii) the 12650 Ingenuity Drive property which was acquired on August 5, 2009, (iv) the Northpoint III property, a Duke joint venture interest which was acquired on October 15, 2009, (v) the West Point Trade
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Center property which was acquired on December 30, 2009, (vi) the Miramar I property which was acquired on December 31, 2009 and subsequently contributed to the Duke joint venture on March 31, 2010, and (vii) the Miramar II property which was acquired on December 31, 2009 and subsequently contributed to the Duke joint venture on March 31, 2010. Our unaudited pro-forma financial information is not necessarily indicative of what our results of operations would have been for the period indicated, nor does it purport to represent our future results of operations. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2009 has not been included in the presentation of these unaudited pro forma financial statements due to the fact that all properties acquired and investments in unconsolidated joint venture investments are already reflected in the December 31, 2009 consolidated balance sheet included in our Annual Report on Form 10-K, filed with the SEC on March 31, 2010.The unaudited pro forma condensed consolidated balance sheet would only differ from the historical balance sheet at December 31, 2009 by the reclassification of $42,479,000 for the Miramar I & II properties that changed from investments in real estate to investments in unconsolidated entities as a result of the contribution of these two properties to the Duke joint venture on March 31, 2010. Total assets and all other summary information would remain unchanged.
| Historical Consolidated | Pro Forma Consolidated | Historical Consolidated | ||||||||||||||||||||||||||||||
| Three Months Ended March 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||
| 2010 | 2009 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||
Rental | $15,002 | $ | 10,342 | $ | 53,880 | $ | 47,023 | $ | 33,396 | $ | 14,028 | $ | 6,630 | $ | 4,614 | |||||||||||||||||
Tenant Reimbursements | 2,918 | 1,946 | 10,458 | 9,301 | 6,753 | 2,633 | 1,830 | 872 | ||||||||||||||||||||||||
Total Revenue | 17,920 | 12,288 | 64,338 | 56,324 | 40,149 | 16,661 | 8,460 | 5,486 | ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||
Operating and Maintenance | 1,575 | 1,227 | 5,548 | 4,974 | 3,248 | 1,057 | 860 | 367 | ||||||||||||||||||||||||
Property Taxes | 2,621 | 1,666 | 8,480 | 7,624 | 5,479 | 1,778 | 1,103 | 563 | ||||||||||||||||||||||||
Interest | 3,095 | 2,807 | 11,917 | 11,378 | 10,323 | 5,049 | 1,784 | 1,195 | ||||||||||||||||||||||||
General and Administrative Expense | 839 | 1,043 | 4,289 | 4,246 | 3,320 | 1,853 | 851 | 359 | ||||||||||||||||||||||||
Property Management Fee to Related Party | 164 | 142 | 656 | 656 | 491 | 160 | 41 | 7 | ||||||||||||||||||||||||
Investment Management Fee to Related Party | 2,431 | 1,703 | 8,814 | 7,803 | 3,964 | 1,547 | 739 | 603 | ||||||||||||||||||||||||
Class C Fee to Related Party | — | — | — | — | — | — | 145 | 459 | ||||||||||||||||||||||||
Acquisition Expenses | 378 | — | 6,354 | 5,832 | — | — | — | — | ||||||||||||||||||||||||
Depreciation and Amortization | 7,243 | 5,722 | 27,439 | 25,093 | 17,171 | 8,050 | 4,618 | 2,478 | ||||||||||||||||||||||||
Loss on Impairment | — | — | 9,160 | 9,160 | — | — | — | — | ||||||||||||||||||||||||
Total Expenses | 18,346 | 14,310 | 82,657 | 76,766 | 43,996 | 19,494 | 10,141 | 6,031 | ||||||||||||||||||||||||
Other Income and Expenses | ||||||||||||||||||||||||||||||||
Interest and Other Income | 598 | 121 | 349 | 344 | 2,039 | 2,855 | 255 | 460 | ||||||||||||||||||||||||
Net Settlement (Payments) Receipts on Interest Rate Swaps | (214 | ) | (81 | ) | (660 | ) | (660 | ) | 65 | — | — | — | ||||||||||||||||||||
(Loss) Gain on Interest Rate Swaps and Cap | (388 | ) | (168 | ) | 89 | 89 | (1,496 | ) | — | — | — | |||||||||||||||||||||
(Loss) Gain on Note Payable at Fair Value | (73) | (565 | ) | (807 | ) | (807 | ) | 1,168 | — | — | — | |||||||||||||||||||||
Loss on Transfer of Real Estate Held for Sale to Continuing Operations | — | — | — | — | (3,451 | ) | — | — | — | |||||||||||||||||||||||
Loss on Early Extinguishment of Debt | (73 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total Other Income and (Expenses) | (150 | ) | (693 | ) | (1,029 | ) | (1,034 | ) | (1,675 | ) | 2,855 | 255 | 460 | |||||||||||||||||||
(Loss) Income Before (Provision) Benefit for Income Taxes and Equity in Income (Loss) of Unconsolidated Entities | (576 | ) | (2,715 | ) | (19,348 | ) | (21,476 | ) | (5,522 | ) | 22 | (1,426 | ) | (85 | ) | |||||||||||||||||
(Provision) Benefit for Income Taxes | (15 | ) | (29 | ) | (169 | ) | (169 | ) | 82 | (279 | ) | — | — | |||||||||||||||||||
Equity in Income (Loss) of Unconsolidated Entities | 737 | (798 | ) | 5,713 | 2,743 | (1,242 | ) | (150 | ) | — | — | |||||||||||||||||||||
Net Income (Loss) | 146 | (3,542 | ) | (13,804 | ) | (18,902 | ) | (6,682 | ) | (407 | ) | (1,426 | ) | (85 | ) | |||||||||||||||||
Net (Income) Loss Attributable to Non-Controlling Operating Partnership Units | (1 | ) | 13 | 39 | 54 | 26 | 4 | (1,058 | ) | (7 | ) | |||||||||||||||||||||
Net Income (Loss) Attributable to CB Richard Ellis Realty Trust Shareholders | $ | 145 | $ | (3,529 | ) | $ | (13,765 | ) | $ | (18,848 | ) | $ | (6,656 | ) | $ | (403 | ) | $ | (2,484 | ) | $ | (92 | ) | |||||||||
Per Share Data: | ||||||||||||||||||||||||||||||||
Basic and Diluted Net Income (Loss) Per Share | $ | 0.00 | $ | (0.05 | ) | $ | (0.17 | ) | $ | (0.23 | ) | $ | (0.14 | ) | $ | (0.02 | ) | $ | (0.35 | ) | $ | (0.01 | ) | |||||||||
Weighted Average Common Shares Outstanding—Basic and Diluted | 112,264,838 | 67,105,252 | 81,367,593 | 81,367,593 | 46,089,680 | 18,545,418 | 7,010,722 | 6,967,762 | ||||||||||||||||||||||||
Dividends Declared Per Share | $ | 0.15 | $ | 0.15 | $ | 0.60 | $ | 0.60 | $ | 0.59 | $ | 0.54 | $ | 0.50 | $ | 0.42 | ||||||||||||||||
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| Historical Consolidated | Historical Consolidated | ||||||||||||||||||||
| March 31, | December 31, | ||||||||||||||||||||
| 2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||
| (in thousands) | |||||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Investments in Real Estate, After Accumulated Depreciation and Amortization | $ | 597,539 | $ | 479,966 | $ | 639,573 | $ | 484,827 | $ | 309,805 | $ | 70,650 | $ | 57,163 | |||||||
Investments in Unconsolidated Entities | 268,968 | 128,285 | 214,097 | 131,703 | 101 | — | — | ||||||||||||||
Total Assets | 1,152,047 | 741,563 | 1,059,019 | 709,920 | 435,751 | 97,807 | 94,118 | ||||||||||||||
Notes Payable | 200,011 | 176,437 | 212,425 | 177,161 | 116,876 | 34,975 | 34,975 | ||||||||||||||
Loan Payable | — | — | — | — | 45,000 | — | — | ||||||||||||||
Total Liabilities | 244,788 | 216,508 | 256,556 | 220,249 | 189,224 | 44,834 | 41,510 | ||||||||||||||
Non-controlling Interest | 2,464 | 2,464 | 2,464 | 2,464 | 2,464 | 2,464 | 250 | ||||||||||||||
Shareholders’ Equity | 904,795 | 522,591 | 799,999 | 487,207 | 244,063 | 50,509 | 52,358 | ||||||||||||||
Total Liabilities and Shareholders’ Equity | 1,152,047 | 741,563 | 1,059,019 | 709,920 | 435,751 | 97,807 | 94,118 | ||||||||||||||
Non-GAAP Supplemental Financial Measure: Funds from Operations
Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors consider presentations of operating results for REITs that use historical cost accounting to be insufficient by themselves. Consequently, the National Association of Real Estate Investment Trusts, or NAREIT, created Funds from Operations, or FFO, as a supplemental measure of REIT operating performance.
FFO is a non-GAAP measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net income. FFO, as we define it, is presented as a supplemental financial measure. Management believes that FFO is a useful supplemental measure of REIT performance. FFO does not present, nor do we intend for it to present, a complete picture of our financial condition and/or operating performance. We believe that net income, as computed under GAAP, appropriately remains the primary measure of our performance and that FFO, when considered in conjunction with net income, improves the investing public’s understanding of the operating results of REITs and makes comparisons of REIT operating results more meaningful.
We compute FFO in accordance with standards established by NAREIT. Modifications to the NAREIT calculation of FFO are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business and provide greater transparency to the investing public as to how their management team considers their results of operations. As a result, our FFO may not be comparable to FFO as reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do. The revised NAREIT White Paper on FFO defines FFO as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships and joint ventures.
Management believes that NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time, and that depreciation charges required by GAAP do not always reflect the underlying economic realities. Likewise, the exclusion from NAREIT’s definition of FFO of gains and losses from the sales of previously depreciated operating real estate assets, allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assists in comparing those operating results between periods. Thus, FFO provides a performance measure that, when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates and operating costs. Management also believes that FFO provides useful information to the investment community about our financial performance when compared to other REITs, since FFO is generally recognized as the industry standard for reporting the operations of REITs.
In addition to presenting FFO in accordance with the NAREIT definition, we also disclose FFO, as adjusted, which excludes the effects of acquisition costs and any non-cash impairment charges. We believe that adjusting FFO to exclude these impairment charges more appropriately presents our results of operations on a comparative basis. The items that we exclude from FFO, as adjusted, are subject to significant fluctuations from period to period that cause both positive and negative effects on our results of operations, often in inconsistent and unpredictable directions. The economics underlying these excluded items are not the primary factors in management’s decision-making process. Period to period fluctuations in these items can be driven by accounting for short-term factors that are not relevant to long-term investment decisions, long-term capital structures or long-term tax planning and tax structuring decisions.
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Therefore, while our FFO, as adjusted, clearly differs from NAREIT’s definition of FFO, and may not be comparable to similarly named measures of other REITs and real estate companies, we believe that it provides a meaningful supplemental measure of our operating performance. We believe that investors are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in planning and executing our business strategy, thus fostering a greater degree of transparency into our management process.
Neither FFO, nor FFO as adjusted, represents cash generated from operating activities in accordance with GAAP and should not be considered as alternatives to (i) net income (determined in accordance with GAAP), as indications of our financial performance, or (ii) to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. We believe that to further understand our performance, each of FFO and FFO, as adjusted, should be compared with our reported net income and considered in addition to cash flows in accordance with GAAP, as presented in our Consolidated Financial Statements.
The following table presents our FFO and FFO, as adjusted for the three months ended March 31, 2010, December 31, 2009, September 30, 2009, and June 30, 2009 (in thousands):
| Three Months Ended | ||||||||||||||||
| March 31, 2010 | December 31, 2009 | September 30, 2009 | June 30, 2009 | |||||||||||||
Reconciliation of net income (loss) to funds from operations: | ||||||||||||||||
Net income (loss) attributable to CB Richard Ellis Realty Trust Shareholders | $ | 145 | $ | (7,669 | ) | $ | (3,412 | ) | $ | (4,238 | ) | |||||
Adjustments: | ||||||||||||||||
Non-controlling interest | 1 | (17 | ) | (16 | ) | (8 | ) | |||||||||
Real estate depreciation and amortization | 7,243 | 6,722 | 6,501 | 6,148 | ||||||||||||
Realized gain from transfer of real estate to unconsolidated entities | (154 | ) | — | — | — | |||||||||||
Net effect of FFO adjustment from unconsolidated entities(1) | 3,715 | 3,687 | 3,891 | 3,516 | ||||||||||||
FFO | $ | 10,950 | $ | 2,723 | $ | 6,964 | 5,418 | |||||||||
Other Adjustments: | ||||||||||||||||
Acquisition expenses | $ | 382 | $ | 2,298 | $ | 2,536 | $ | 998 | ||||||||
Real estate impairment loss | — | 9,160 | — | — | ||||||||||||
Unrealized loss (gain) in unconsolidated entity | 24 | (3,988 | ) | 214 | 1,424 | |||||||||||
FFO, as adjusted | $ | 11,356 | $ | 10,193 | $ | 9,714 | $ | 7,840 | ||||||||
FFO per share (basic and diluted) | $ | 0.10 | $ | 0.03 | $ | 0.08 | $ | 0.07 | ||||||||
FFO, as adjusted, per share (basic and diluted) | $ | 0.10 | $ | 0.10 | $ | 0.11 | $ | 0.11 | ||||||||
| (1) | Represents our share of the FFO adjustments allowable under the NAREIT definition (primarily depreciation) for each of our unconsolidated entities multiplied by our ownership interest in each of these unconsolidated entities during the quarter ended March 31, 2010 and multiplied by the percentage of income or loss recognized by us for each of these unconsolidated entities during the prior quarters. |
This section contains certain information that supplements the description of our Share Redemption Program following the caption “Description of Shares—Share Redemption Program,” which begins on page 89 of our prospectus.
For the quarter ended March 31, 2010, we received requests to redeem 514,846.93 common shares pursuant to our share redemption program. We redeemed 100% of the redemption requests for the quarter ended March 31, 2010 at an average price per share of $9.07. We funded share redemptions for the period noted above from the cumulative proceeds of the sale of our common shares pursuant to our dividend reinvestment plan.
This section contains certain information that supplements and updates the information under the section “Experts,” which begins on page 124 of our prospectus.
The consolidated financial statements, and the related financial statement schedule, incorporated in this prospectus by reference from the Annual Report on Form 10-K of CB Richard Ellis Realty Trust and its subsidiaries, or the Company, for the year ended December 31, 2009, and the effectiveness of the Company’s internal control over financial reporting have been audited by Deloitte & Touche LLP, an
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independent registered public accounting firm, as stated in their reports which are incorporated herein by reference. Such financial statements and financial statement schedules have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements and related schedule of Duke/Hulfish, LLC and subsidiaries as of December 31, 2009 and 2008, and for the year ended December 31, 2009 and the period from April 29, 2008 (inception) through December 31, 2008, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2009 financial statements refers to a change in accounting for business combinations.
The combined statements of assets, liabilities and partners’ capital and combined schedules of real estate related investments of CB Richard Ellis Strategic Partners Asia II, L.P. and CB Richard Ellis Strategic Partners Asia II-A, L.P., Cayman Islands exempted limited partnerships, as of December 31, 2008 and 2007 and the related combined statements of operations, partners’ capital and cash flows for the year ended December 31, 2008 and the period from July 9, 2007 (inception) through December 31, 2007, have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG, independent auditors, for 2008, and KPMG LLP, independent auditors, for 2007, incorporated by reference herein and upon the authority of said firms as experts in accounting and auditing.
Incorporation of Certain Information by Reference
This Supplement No. 2 to our prospectus dated April 28, 2010 “incorporates by reference” certain information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents that are considered part of this prospectus. The following documents filed with the SEC are incorporated by reference into this Supplement No. 2:
| ¡ | Our Annual Report on Form 10-K for the year ended December 31, 2009, filed on March 31, 2010; |
| ¡ | Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed on May 14, 2010; |
| ¡ | Our Current Report on Form 8-K, filed on April 19, 2010; |
| ¡ | Our Proxy Statement on Schedule 14A for our 2010 Annual Meeting of Shareholders, filed on April 20, 2010. |
You can obtain any of the documents incorporated by reference in this Supplement No. 2 from us, or from the SEC through the SEC’s website at the addresswww.sec.gov. We will furnish without charge to you, on written or oral request, a copy of any or all of the documents incorporated by reference, other than exhibits to such documents. You should direct any written requests for documents to CB Richard Ellis Realty Trust, 47 Hulfish Street, Suite 210, Princeton, New Jersey 08542, or call (609) 683-4900. Such documents may also be accessed on our website atwww.cbrerealtytrust.com. The information found on, or otherwise accessible through, our website is not incorporated information and does not form a part of this prospectus or any other report or document we file or furnish with the SEC.
Pro Forma Financial Information
The December 31, 2009 unaudited pro forma condensed consolidated statement of operations is included in the prospectus beginning on page F-1. The unaudited pro forma condensed consolidated balance sheet and statement of operations as of and for the three months ended March 31, 2010 are not presented because acquisitions and probable acquisitions occurring subsequent to December 31, 2009 have not been significant.
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