UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 21, 2010
CB RICHARD ELLIS REALTY TRUST
(Exact name of registrant as specified in its charter)
| | | | |
| Maryland | | 000-53200 | | 56-2466617 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer
Identification No.) |
47 Hulfish Street, Suite 210, Princeton, NJ 08542 (Address of principal executive offices)
(609) 683-4900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
CB Richard Ellis Realty Trust (the “Company”) previously disclosed that Duke/Hulfish, LLC, a joint venture (the “Duke Joint Venture”) between CBRE Operating Partnership, L.P. (“CBRE OP”), the Company’s operating partnership and Duke Realty Limited Partnership (“Duke”), the operating partnership of Duke Realty Corporation (NYSE: DRE), entered into a purchase and sale agreement with Duke, Duke Secured Financing 2009-1PAC, LLC and Duke Realty Ohio for the acquisition of up to $516,650,000 in office real property assets (the “Office Portfolio”) in a Current Report on Form 8-K filed on December 23, 2010 (the “Office Portfolio Form 8-K”). The Office Portfolio consists of 20 office properties (each a “Property” and together the “Properties”) that are expected to be contributed to the Duke Joint Venture in three separate tranches. CBRE OP owns an 80% interest and Duke owns a 20% interest in the Duke Joint Venture. On December 21, 2010, the Duke Joint Venture acquired fee interests in the first tranche of Properties (“Office Portfolio Tranche I”) as described in the Office Portfolio Form 8-K.
The Company is filing this Form 8-K/A to incorporate by reference the required financial information as described below in Item 9.01 with respect to Office Portfolio Tranche I.
| Item 9.01 | Financial Statements and Exhibits. |
(a)Financial Statements. The following is required financial information relating to Office Portfolio Tranche I:
Office Portfolio Tranche I
2
Report of Independent Registered Public Accounting Firm
The Members
Duke/Hulfish, LLC:
We have audited the accompanying combined statement of revenue in excess of certain expenses (the “Combined Statement”) of the Duke Office Portfolio Tranche I (the “Properties”), described in note 1, for the year ended December 31, 2009. This Combined Statement is the responsibility of Duke/Hulfish, LLC’s management. Our responsibility is to express an opinion on this Combined Statement based on our audit.
We conducted our audit 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 Combined Statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Combined Statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Combined Statement. We believe that our audit provides a reasonable basis for our opinion.
The accompanying Combined Statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in the Form 8 K/A of CB Richard Ellis Realty Trust, as described in note 2 to the Combined Statement. It is not intended to be a complete presentation of the Properties’ revenue and expenses.
In our opinion, the Combined Statement referred to above presents fairly, in all material respects, the combined revenue in excess of certain expenses, as described in note 2, of the Properties for the year ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Indianapolis, IN
February 7, 2011
F-1
DUKE OFFICE PORTFOLIO TRANCHE I
Combined Statements of Revenue in Excess of Certain Expenses
| | | | | | | | |
| | | Year Ended
December 31,
2009 | | | Nine Months
Ended
September 30,
2010
(unaudited) | |
Revenue: | | | | | | | | |
Rental income, including reimbursements from tenants | | $ | 20,647,588 | | | $ | 16,828,263 | |
Certain expenses: | | | | | | | | |
Rental Expenses | | | 5,140,467 | | | | 4,057,124 | |
Real estate taxes | | | 2,514,799 | | | | 2,031,813 | |
| | | | | | | | |
| | | 7,655,266 | | | | 6,088,937 | |
| | | | | | | | |
Revenue in excess of certain expenses | | $ | 12,992,322 | | | $ | 10,739,326 | |
| | | | | | | | |
See accompanying notes to combined statements of revenue in excess of certain expenses.
F-2
DUKE OFFICE PORTFOLIO TRANCHE I
Notes to Combined Statements of Revenue in Excess of Certain Expenses
for the Year Ended December 31, 2009 and for the
Unaudited Nine-Months Ended September 30, 2010
(1) Operating Properties
The Combined Statement for the year ended December 31, 2009 relates to the operations of the following properties (“Duke Office Portfolio Tranche I”), which has been acquired by Duke/Hulfish, LLC from affiliates of Duke Realty Corporation. An affiliate of Duke Realty Corporation is one of the members of Duke/Hulfish, LLC.
| | | | | | |
Property | | Property market | | Property type | | Rental square footage |
McAuley Place | | Cincinnati, OH | | Office | | 190,733 |
| | | |
Easton III | | Cincinnati, OH | | Office | | 135,485 |
| | | |
Point West I | | Dallas, TX | | Office | | 182,700 |
| | | |
Sam Houston Crossing I | | Houston, TX | | Office | | 159,175 |
| | | |
Regency Creek | | Raleigh, NC | | Office | | 122,087 |
| | | |
533 Maryville Center | | St. Louis, MO | | Office | | 125,296 |
| | | |
555 Maryville Center | | St. Louis, MO | | Office | | 127,082 |
(2) Basis of Presentation
The accompanying Combined Statement has been prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for inclusion in a Form 8-K/A to be filed by CB Richard Ellis Realty Trust and is not intended to be a complete presentation of the revenues and expenses of the Duke Office Portfolio Tranche I properties. The Combined Statement is not representative of the actual results of operations of Duke Office Portfolio Tranche I for the year ended December 31, 2009, due to the exclusion of the following expenses, which may not be comparable to the proposed future operations of the Duke Office Portfolio Tranche I properties:
| | ¡ | | Depreciation and amortization. |
| | ¡ | | Other costs not directly related to the proposed future operations of the Duke Office Portfolio Tranche I properties acquired. |
Unaudited Interim Financial Information
The unaudited Combined Statement for the nine months ended September 30, 2010 has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, it does not include all of the information and footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair presentation of the unaudited Combined Statement for the nine months ended September 30, 2010 have been included, and all such adjustments are of a normal recurring nature. The unaudited Combined Statement for the nine months ended September 30, 2010 is not necessarily indicative of the revenues in excess of certain expenses that can be expected for the year ending December 31, 2010.
(3) Summary of Significant Accounting Policies
(a) Revenue Recognition
The Properties lease office space under various lease agreements with its tenants. All leases are accounted for as operating leases. The leases include provisions under which the Properties are reimbursed for common area, real estate tax, management fees, and insurance expenses. Revenue related to these reimbursed expenses is recognized in the period the applicable expenses are incurred and billed to tenants pursuant to the lease agreements. Certain leases contain renewal options at various periods at various rental rates.
F-3
DUKE OFFICE PORTFOLIO TRANCHE I
Notes to Combined Statements of Revenue in Excess of Certain Expenses—(Continued)
for the Year Ended December 31, 2009 and for the
Unaudited Nine-Months Ended September 30, 2010
Although certain leases may provide for tenant occupancy during periods for which no rent is due and/or increases exist in minimum lease payments over the term of the lease, rental income accrues for the full period of occupancy on a straight-line basis. Related adjustments increased base rental income by $178,071 (unaudited) for the nine months ended September 30, 2010 and increased base rental income by $2,341,177 for the year ended December 31, 2009.
(b) Rental Expenses
Rental expenses include only those expenses expected to be comparable to the proposed future operations of the Properties. Repairs and maintenance expenses are charged to expense as incurred. Expenses such as depreciation, amortization, interest expense related to mortgage debt not assumed, and professional fees are excluded from the Combined Statement.
(c) Use of Estimates
The Combined Statement has been prepared on the accrual basis of accounting. Management has made a number of estimates and assumptions relating to the reporting and disclosure of revenue and certain expenses during the reporting period to prepare the Combined Statement in conformity with GAAP. Actual results could differ from those estimates.
(4) Rental Revenue
Space is leased to tenants under various operating leases with initial terms ranging from one year to fifteen years. The leases provide for reimbursement of real estate taxes, common area maintenance and certain other operating expenses. At September 30, 2010, future minimum rentals to be received under noncancelable operating leases for each of the years ended December 31 are as follows:
| | | | |
2010 (remaining three months) | | $ | 4,532,444 | |
2011 | | | 17,758,242 | |
2012 | | | 17,506,422 | |
2013 | | | 16,924,499 | |
2014 | | | 16,293,501 | |
| | | 76,951,240 | |
| | | | |
Thereafter | | $ | 149,966,368 | |
| | | | |
(5) Tenant Concentrations
At December 31, 2009, the following tenants represented over 10% of the total rental income or square footage at the Duke Office Portfolio Tranche I properties:
| | | | | | | | |
Building | | Tenant | | Percentage of total
square footage | | Percentage of total
rental income | | Lease expiration |
McAuley Place | | Mercy Health Partners of Southwest Ohio | | 10% | | 14% | | 8/31/2023 |
| | | | |
Easton III | | Lane Bryant, Inc. | | 13% | | 10% | | 1/31/2019 |
| | | | |
533 Maryville Centre and 555 Maryville Centre | | Eveready Battery Company | | 16% | | 29% | | 4/30/2011 |
| | | | |
Point West I | | American Home Mortgage Services | | 18% | | 8% | | 12/6/2016 |
In 2010, Eveready Battery Company extended both of its leases through April 30, 2021.
If these tenants were to default on their leases, future revenues of the properties could be adversely impacted. No other tenants represented more than 10% of the properties’ total rental income or square footage.
F-4
DUKE OFFICE PORTFOLIO TRANCHE I
Notes to Combined Statements of Revenue in Excess of Certain Expenses—(Continued)
for the Year Ended December 31, 2009 and for the
Unaudited Nine-Months Ended September 30, 2010
(6) Related Party Transactions
Duke Realty Services, LLC, an affiliate of Duke Realty Corporation, provides management services for the Duke Office Portfolio Tranche I properties. The properties incurred management fees of approximately $518,143 (unaudited) and $571,760, which are included in operating expenses for the nine month period ended September 30, 2010 and the year ended December 31, 2009, respectively. Duke Realty Services, LLC will continue to provide management services for the properties.
F-5
CB RICHARD ELLIS REALTY TRUST
Pro Forma Condensed Consolidated Financial Statements
(unaudited)
The following unaudited pro forma condensed consolidated statements of operations of CB Richard Ellis Realty Trust (the “Company”) including its consolidated subsidiaries, for the nine months ended September 30, 2010 and for the year ended December 31, 2009 are based on the historical consolidated statements of operations of CB Richard Ellis Realty Trust and gives effect to the acquisitions of the following single tenant leased properties as if they were acquired on January 1, 2009, (i) the 13201 Wilfred Lane property (“13201 Wilfred Lane”) which was acquired on June 30, 2009, (ii) the 3011, 3055, 3077 Comcast Place property (“Comcast”) which was acquired on July 1, 2009, (iii) the 12650 Ingenuity Dr. property (“Ingenuity”) which was acquired on August 5, 2009, (iv) the Northpoint III property (“Duke NP III”) which was acquired on October 15, 2009, (v) the West Point Trade Center property (“West Point”) which was acquired on December 30, 2009, (vi) the Miramar I property acquired on December 31, 2009 and subsequently contributed to the Duke joint venture on March 31, 2010, (vii) the Miramar II property acquired on December 31, 2009 and subsequently contributed to the Duke joint venture on March 31, 2010, (viii) the 3900 North Paramount Parkway, 3900 South Paramount Parkway and 1400 Perimeter Park Drive properties (collectively the “Duke North Carolina Portfolio”), a Duke joint venture interest which was acquired on March 31, 2010, (ix) the 5160 Hacienda Drive property which was acquired on April 8, 2010, (x) the 10450 Pacific Court Center property which was acquired on May 7, 2010, (xi) the Amber Park and Brackmills properties, UK JV interests which were acquired on June 10, 2010, (xii) the Düren and Shönberg properties, European JV interests which were acquired on June 10, 2010, (xiii) the 225 Summit Avenue property which was acquired on June 21, 2010, (xiv) the One Wayside Road property which was acquired on June 24, 2010, (xv) the 100 Tice Blvd. property which was acquired on September 28, 2010, (xvi) the National Industrial Portfolio (“NIP”) which was acquired on October 27, 2010 and (xvii) and the Duke Office Portfolio – Tranche I (“Duke Tranche I”) which was acquired on December 21, 2010.
Our unaudited pro forma condensed consolidated balance sheet as of September 30, 2010 is presented as if the acquisition of NIP, Pacific Corporate Park (“Pacific”), Duke Tranche I and the Duke joint venture financing with Metropolitan Life Insurance Company (the “Duke Financing”) had taken place on September 30, 2010. NIP was acquired on October 27, 2010, Pacific was acquired on November 15, 2010, Duke Tranche I was acquired on December 21, 2010 and the Duke Financing closed on November 24, 2010.
The unaudited pro forma condensed consolidated statements of operations do not purport to represent our results of operations that would actually have occurred assuming the acquisitions of 13201 Wilfred Lane, Comcast, Ingenuity, Duke NP III, West Point, Miramar I, Miramar II, Duke North Carolina Portfolio, 5160 Hacienda Drive, 10450 Pacific Court Center, UK JV interests, European JV interests, 225 Summit Avenue, One Wayside Road, 100 Tice Blvd., NIP and Duke Tranche I had occurred on January 1, 2009, nor do they purport to project our results of operations as of any future date or for any future period.
F-6
CB RICHARD ELLIS REALTY TRUST
Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 2010 (unaudited)
(In Thousands, Except Share Data)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | CB Richard
Ellis Realty
Trust
Historical | | | NIP | | | Pacific | | | Duke
Financing | | | Duke
Tranche I | | | Consolidated
Company
Pro Forma | |
| | | A | | | B | | | C | | | D | | | E | | | | |
Net Investments in Real Estate | | $ | 793,378 | | | $ | 73,000 | | | $ | 144,500 | | | $ | — | | | $ | — | | | $ | 1,010,878 | |
Investment in Unconsolidated Entity | | | 323,467 | | | | — | | | | — | | | | (72,888 | ) | | | 139,080 | | | | 389,659 | |
Cash and Cash Equivalents | | | 294,350 | | | | (74,515 | ) | | | (147,573 | ) | | | 72,888 | | | | (141,977 | ) | | | 3,174 | |
Restricted Cash | | | 2,490 | | | | — | | | | — | | | | — | | | | — | | | | 2,490 | |
Accounts and Other Receivables | | | 3,950 | | | | — | | | | — | | | | — | | | | — | | | | 3,950 | |
Deferred Rent | | | 6,618 | | | | — | | | | — | | | | — | | | | — | | | | 6,618 | |
Acquired Above Market Leases | | | 18,922 | | | | — | | | | — | | | | — | | | | — | | | | 18,922 | |
Acquired in Place Lease Value | | | 81,340 | | | | — | | | | — | | | | — | | | | — | | | | 81,340 | |
Deferred Financing Costs | | | 5,082 | | | | — | | | | — | | | | — | | | | — | | | | 5,082 | |
Lease Commissions | | | 1,581 | | | | — | | | | — | | | | — | | | | — | | | | 1,581 | |
Other Assets | | | 4,174 | | | | — | | | | — | | | | — | | | | — | | | | 4,174 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 1,535,352 | | | $ | (1,515 | ) | | $ | (3,073 | ) | | $ | — | | | $ | (2,897 | ) | | $ | 1,527,868 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | |
Notes Payable | | $ | 269,883 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 269,883 | |
Loan Payable | | | 25,000 | | | | | | | | | | | | | | | | | | | | 25,000 | |
Security Deposits | | | 1,666 | | | | — | | | | — | | | | — | | | | — | | | | 1,666 | |
Accounts Payable and Accrued Expenses | | | 13,643 | | | | — | | | | — | | | | — | | | | — | | | | 13,643 | |
Accrued Offering Costs Payable to Related Parties | | | 2,103 | | | | — | | | | — | | | | — | | | | — | | | | 2,103 | |
Acquired Below Market Leases | | | 14,689 | | | | — | | | | — | | | | — | | | | — | | | | 14,689 | |
Property Management Fee Payable to Related Party | | | 132 | | | | — | | | | — | | | | — | | | | — | | | | 132 | |
Investment Management Fees Payable to Related Party | | | 990 | | | | — | | | | — | | | | — | | | | — | | | | 990 | |
Distributions Payable | | | 21,623 | | | | — | | | | — | | | | — | | | | — | | | | 21,623 | |
Interest Rate Swaps at Fair Value—Non-Qualifying Hedges | | | 1,625 | | | | — | | | | — | | | | — | | | | — | | | | 1,625 | |
Interest Rate Swaps at Fair Value—Qualifying Hedges | | | 2,083 | | | | — | | | | — | | | | — | | | | — | | | | 2,083 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 353,437 | | | | — | | | | — | | | | — | | | | — | | | | 353,437 | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | | | | | | | | | | | | |
NON-CONTROLLING INTEREST | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Partnership Units | | | 2,464 | | | | — | | | | — | | | | — | | | | — | | | | 2,464 | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | |
Common Stock, $.01 par value, 990,000,000 shares authorized; 155,627,892 issued and outstanding | | | 1,557 | | | | — | | | | — | | | | — | | | | — | | | | 1,557 | |
Additional Paid-in-Capital | | | 1,372,485 | | | | — | | | | — | | | | — | | | | — | | | | 1,372,485 | |
Accumulated Deficit | | | (184,844 | ) | | | (1,515 | ) | | | (3,073 | ) | | | — | | | | (2,897 | ) | | | (192,328 | ) |
Accumulated Other Comprehensive Loss | | | (9,747 | ) | | | — | | | | — | | | | — | | | | — | | | | (9,747 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Shareholders’ Equity | | | 1,179,451 | | | | (1,515 | ) | | | (3,073 | ) | | | — | | | | (2,897 | ) | | | 1,171,967 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 1,535,352 | | | $ | (1,515 | ) | | $ | (3,073 | ) | | $ | — | | | $ | (2,897 | ) | | $ | 1,527,868 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
See accompanying notes to the pro forma condensed consolidated financial statements.
F-7
CB RICHARD ELLIS REALTY TRUST
Pro Forma Condensed Consolidated Statements of Operations
for the Nine Months Ended September 30, 2010 (unaudited)
(In Thousands, Except Share Data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | CB Richard
Ellis Realty
Trust
Historical | | | NIP | | | Duke
Tranche I | | | Duke NC
Portfolio
Pro Forma
Adjustments | | | 5160
Hacienda
Dr. Pro
Forma
Adjustments | | | 10450
Pacific
Ctr. Court
Pro Forma
Adjustments | | | UK JV Pro
Forma
Adjustments | | | European JV
Pro Forma
Adjustments | | | 225 Summit
Ave. Pro
Forma
Adjustments | | | One
Wayside
Dr. Pro
Forma
Adjustments | | | 100 Tice
Blvd. Pro
Forma
Adjustments | | | NIP
Pro Forma
Adjustments | | | Duke
Tranche I
Pro Forma
Adjustments | | | Consolidated
Company
Pro Forma | |
| | | AA | | | BB | | | CC | | | DD | | | EE | | | FF | | | GG | | | HH | | | II | | | JJ | | | KK | | | LL | | | MM | | | | |
REVENUES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Rental | | $ | 46,529 | | | $ | 5,720 | | | $ | — | | | $ | — | | | $ | 942 | | | $ | 951 | | | $
| —
|
| | $
| —
|
| | $ | 2,054 | | | $ | 2,680 | | | $ | 3,963 | | | $ | — | | | $ | — | | | $ | 62,839 | |
Tenant Reimbursements | | | 8,947 | | | | 1,256 | | | | — | | | | — | | | | 144 | | | | 136 | | | | — | | | | — | | | | 49 | | | | 211 | | | | 981 | | | | — | | | | — | | | | 11,725 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenues | | | 55,476 | | | | 6,976 | | | | — | | | | — | | | | 1,086 | | | | 1,087 | | | | — | | | | — | | | | 2,103 | | | | 2,891 | | | | 4,944 | | | | — | | | | — | | | | 74,564 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating and Maintenance | | | 5,130 | | | | 364 | | | | — | | | | — | | | | 22 | | | | 22 | | | | — | | | | — | | | | 103 | | | | 91 | | | | 624 | | | | — | | | | — | | | | 6,356 | |
Property Taxes | | | 7,836 | | | | 868 | | | | — | | | | — | | | | 123 | | | | 126 | | | | — | | | | — | | | | 208 | | | | 250 | | | | 461 | | | | — | | | | — | | | | 9,872 | |
Interest | | | 10,232 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 838 | | | | 1,900 | | | | — | | | | — | | | | 12,971 | |
General and Administrative | | | 4,243 | | | | 71 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,315 | |
Property Management Fee to Related Party | | | 607 | | | | 186 | | | | — | | | | — | | | | 18 | | | | — | | | | — | | | | — | | | | 99 | | | | 132 | | | | 137 | | | | — | | | | — | | | | 1,180 | |
Investment Management Fee to Related Party | | | 8,050 | | | | — | | | | — | | | | 69 | | | | 94 | | | | 97 | | | | 103 | | | | 104 | | | | 180 | | | | 250 | | | | 450 | | | | 579 | | | | — | | | | 9,978 | |
Acquisition Expenses | | | 7,414 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,415 | |
Depreciation and Amortization | | | 21,902 | | | | — | | | | — | | | | — | | | | 132 | | | | 237 | | | | — | | | | — | | | | 763 | | | | 1,113 | | | | 1,184 | | | | 1,094 | | | | — | | | | 26,427 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Expenses | | | 65,414 | | | | 1,489 | | | | — | | | | 69 | | | | 389 | | | | 482 | | | | 103 | | | | 104 | | | | 1,353 | | | | 2,674 | | | | 4,755 | | | | 1,673 | | | | — | | �� | | 78,514 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
OTHER INCOME AND EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest and Other Income | | | 931 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 931 | |
Net Settlement Payments on Interest Rate Swaps | | | (1,012 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,012 | ) |
Loss on Interest Rate Swaps | | | (239 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (239 | ) |
Loss on Note Payable at Fair Value | | | (98 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (98 | ) |
Loss on Early Extinguishment of Debt | | | (72 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (72 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Other Income and (Expenses) | | | (490 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (490 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES AND EQUITY IN (LOSS) INCOME OF UNCONSOLIDATED ENTITIES | | | (10,428 | ) | | | 5,487 | | | | — | | | | (69 | ) | | | 697 | | | | 605 | | | | (103 | ) | | | (104 | ) | | | 750 | | | | 217 | | | | 189 | | | | (1,673 | ) | | | — | | | | (4,441 | ) |
PROVISION FOR INCOME TAXES | | | (248 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (248 | ) |
EQUITY IN INCOME OF UNCONSOLIDATED ENTITIES | | | 5,385 | | | | — | | | | 8,591 | | | | 524 | | | | — | | | | — | | | | 648 | | | | 141 | | | | — | | | | — | | | | — | | | | — | | | | (7,379 | ) | | | 7,910 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET (LOSS) INCOME | | | (5,291 | ) | | | 5,487 | | | | 8,591 | | | | 455 | | | | 697 | | | | 605 | | | | 545 | | | | 37 | | | | 750 | | | | 217 | | | | 189 | | | | (1,673 | ) | | | (7,379 | ) | | | 3,222 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss (Income) Attributable to Non-Controlling Operating Partnership Units | | | 9 | | | | — | | | | — | | | | (1 | ) | | | (1 | ) | | | (1 | ) | | | (1 | ) | | | (0 | ) | | | (1 | ) | | | (1 | ) | | | (1 | ) | | | (6 | ) | | | 12 | | | | 2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET (LOSS) INCOME ATTRIBUTABLE TO CB RICHARD ELLIS REALTY TRUST SHAREHOLDERS | | $ | (5,282 | ) | | $ | 5,487 | | | $ | 8,591 | | | $ | 454 | | | $ | 696 | | | $ | 604 | | | $ | 544 | | | $ | 37 | | | $ | 749 | | | $ | 216 | | | $ | 188 | | | $ | (1,679 | ) | | $ | (7,367 | ) | | $ | 3,224 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and Diluted Net (Loss) Income per Share | | $ | (0.04 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.03 | |
Weighted Average Common Shares Outstanding—Basic and Diluted | | | 128,405,833 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 128,405,833 | |
See accompanying notes to the pro forma condensed consolidated financial statements.
F-8
CB RICHARD ELLIS REALTY TRUST
Pro Forma Condensed Consolidated Statements of Operations
for the Year Ended December 31, 2009 (unaudited)
(In Thousands, Except Share Data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | CB Richard
Ellis
Realty
Trust
Historical | | | NIP | | | Duke
Tranche I | | | 13201
Wilfred
Lane Pro
Forma
Adjustments | | | Comcast
Pro Forma
Adjustments | | | Ingenuity
Pro Forma
Adjustments | | | Duke–NPIII
Pro Forma
Adjustments | | | West Point
Pro Forma
Adjustments | | | Miramar I
Pro Forma
Adjustments | | | Miramar II
Pro Forma
Adjustments | | | Duke NC
Portfolio
Pro Forma
Adjustments | | | 5160
Hacienda
Dr. Pro
Forma
Adjustments | | | 10450
Pacific
Ctr. Court
Pro Forma
Adjustments | | | UK JV Pro
Forma
Adjustments | | | European JV
Pro Forma
Adjustments | | | 225 Summit
Ave. Pro
Forma
Adjustments | | | One
Wayside
Dr. Pro
Forma
Adjustments | | | 100 Tice
Blvd. Pro
Forma
Adjustments | | | NIP
Pro Forma
Adjustments | | | Duke
Tranche I
Pro Forma
Adjustments | | | Consolidated
Company
Pro Forma | |
| | | NN | | | OO | | | PP | | | QQ | | | RR | | | SS | | | TT | | | UU | | | VV | | | WW | | | XX | | | YY | | | ZZ | | | AAA | | | BBB | | | CCC | | | DDD | | | EEE | | | FFF | | | GGG | | | | |
REVENUES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Rental | | $ | 47,023 | | | $ | 8,008 | | | $ | — | | | $ | 828 | | | $ | 1,750 | | | $ | 1,351 | | | $
| —
|
| | $ | 2,927 | | | $ | — | | | $ | — | | | $ | — | | | $ | 3,545 | | | $ | 2,754 | | | $ | — | | | $
| —
|
| | $ | 4,370 | | | $ | 5,730 | | | $ | 5,363 | | | $ | — | | | $ | — | | | $ | 83,649 | |
Tenant Reimbursements | | | 9,301 | | | | 1,658 | | | | — | | | | 280 | | | | 477 | | | | 265 | | | | — | | | | 135 | | | | — | | | | — | | | | — | | | | 541 | | | | 394 | | | | — | | | | — | | | | 106 | | | | 451 | | | | 1,326 | | | | — | | | | — | | | | 14,934 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenues | | | 56,324 | | | | 9,666 | | | | — | | | | 1,108 | | | | 2,227 | | | | 1,616 | | | | — | | | | 3,062 | | | | — | | | | — | | | | — | | | | 4,086 | | | | 3,148 | | | | — | | | | — | | | | 4,476 | | | | 6,181 | | | | 6,689 | | | | — | | | | — | | | | 98,583 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating and Maintenance | | | 4,974 | | | | 545 | | | | — | | | | 19 | | | | 376 | | | | 37 | | | | — | | | | 142 | | | | — | | | | — | | | | — | | | | 81 | | | | 63 | | | | — | | | | — | | | | 221 | | | | 195 | | | | 843 | | | | — | | | | — | | | | 7,496 | |
Property Taxes | | | 7,624 | | | | 1,124 | | | | — | | | | 260 | | | | 288 | | | | 218 | | | | — | | | | 90 | | | | — | | | | — | | | | — | | | | 463 | | | | 364 | | | | — | | | | — | | | | 444 | | | | 534 | | | | 623 | | | | — | | | | — | | | | 12,033 | |
Interest | | | 11,378 | | | | — | | | | — | | | | — | | | | — | | | | 539 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,788 | | | | 2,569 | | | | — | | | | — | | | | 16,273 | |
General and Administrative | | | 4,246 | | | | 130 | | | | — | | | | — | | | | 12 | | | | 15 | | | | — | | | | 16 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 176 | | | | 114 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,709 | |
Property Management Fee to Related Party | | | 656 | | | | 231 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 21 | | | | — | | | | — | | | | — | | | | 212 | | | | 283 | | | | 185 | | | | — | | | | — | | | | 1,588 | |
Investment Management Fee to Related Party | | | 7,803 | | | | — | | | | — | | | | 71 | | | | 192 | | | | 114 | | | | 115 | | | | 168 | | | | 146 | | | | 205 | | | | 275 | | | | 355 | | | | 282 | | | | 235 | | | | 237 | | | | 384 | | | | 534 | | | | 609 | | | | 788 | | | | — | | | | 12,513 | |
Acquisition Expenses | | | 5,832 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 529 | | | | 701 | | | | 650 | | | | 584 | | | | 609 | | | | 1,184 | | | | 1,032 | | | | 2,071 | | | | 1,491 | | | | — | | | | 14,683 | |
Depreciation and Amortization | | | 25,093 | | | | — | | | | — | | | | 284 | | | | 638 | | | | 469 | | | | — | | | | 953 | | | | — | | | | — | | | | — | | | | 498 | | | | 687 | | | | — | | | | — | | | | 1,455 | | | | 2,095 | | | | 1,571 | | | | 1,458 | | | | — | | | | 35,204 | |
Loss on Impairment | | | 9,160 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 9,160 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Expenses | | | 76,766 | | | | 2,030 | | | | — | | | | 635 | | | | 1,506 | | | | 1,392 | | | | 115 | | | | 1,369 | | | | 146 | | | | 205 | | | | 804 | | | | 2,119 | | | | 2,047 | | | | 995 | | | | 960 | | | | 3,900 | | | | 6,461 | | | | 8,471 | | | | 3,738 | | | | — | | | | 113,658 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
OTHER INCOME AND EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest and Other Income | | | 344 | | | | — | | | | — | | | | — | | | | — | | | | 5 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 349 | |
Net Settlement Payments on Interest Rate Swaps | | | (660 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (660 | ) |
Gain on Interest Rate Swaps and Cap | | | 89 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 89 | |
Loss on Note Payable at Fair Value | | | (807 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (807 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Other Income and (Expenses) | | | (1,034 | ) | | | — | | | | — | | | | — | | | | — | | | | 5 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,029 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(LOSS) INCOME BEFORE NON—CONTROLLING INTEREST, PROVISION FOR INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED ENTITIES | | | (21,476 | ) | | | 7,635 | | | | (1 | ) | | | 474 | | | | 721 | | | | 229 | | | | (115 | ) | | | 1,693 | | | | (146 | ) | | | (205 | ) | | | (804 | ) | | | 1,967 | | | | 1,102 | | | | (995 | ) | | | (960 | ) | | | 576 | | | | (280 | ) | | | (1,782 | ) | | | (3,738 | ) | | | — | | | | (16,104 | ) |
PROVISION FOR INCOME TAXES | | | (169 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (169 | ) |
EQUITY IN INCOME OF UNCONSOLIDATED ENTITIES | | | 2,743 | | | | — | | | | 10,394 | | | | — | | | | — | | | | — | | | | 810 | | | | — | | | | 1,034 | | | | 1,126 | | | | 2,094 | | | | — | | | | — | | | | 1,317 | | | | 884 | | | | — | | | | — | | | | — | | | | — | | | | (12,368 | ) | | | 8,034 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET (LOSS) INCOME | | | (18,902 | ) | | | 7,635 | | | | 10,393 | | | | 474 | | | | 721 | | | | 229 | | | | 695 | | | | 1,693 | | | | 888 | | | | 921 | | | | 1,290 | | | | 1,967 | | | | 1,102 | | | | 322 | | | | (76 | ) | | | 576 | | | | (280 | ) | | | (1,782 | ) | | | (3,738 | ) | | | (12,368 | ) | | | (8,240 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss (Income) Attibutable to Non–Controlling Operating Partnership Units | | | 54 | | | | — | | | | — | | | | (1 | ) | | | (2 | ) | | | (1 | ) | | | (2 | ) | | | (5 | ) | | | (3 | ) | | | (3 | ) | | | (7 | ) | | | (6 | ) | | | (3 | ) | | | (1 | ) | | | 0 | | | | (2 | ) | | | (0 | ) | | | 5 | | | | (11 | ) | | | 6 | | | | 18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET (LOSS) INCOME ATTIBUTABLE TO CB RICHARD ELLIS REALTY TRUST SHAREHOLDERS | | $ | (18,848 | ) | | $ | 7,635 | | | $ | 10,393 | | | $ | 473 | | | $ | 719 | | | $ | 228 | | | $ | 693 | | | $ | 1,688 | | | $ | 885 | | | $ | 918 | | | $ | 1,283 | | | $ | 1,961 | | | $ | 1,099 | | | $ | 321 | | | $ | (76 | ) | | $ | 574 | | | $ | (280 | ) | | $ | (1,777 | ) | | $ | (3,749 | ) | | $ | (12,363 | ) | | $ | (8,223 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and Diluted Net Loss per Share | | $ | (0.23 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.10 | ) |
Weighted Average Common Shares Outstanding—Basic and Diluted | | | 81,367,593 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 81,367,593 | |
See accompanying notes to the pro forma condensed consolidated financial statements.
F-9
CB RICHARD ELLIS REALTY TRUST
Notes to the Pro Forma Condensed Consolidated Financial Statements
(unaudited)
Adjustments to Pro Forma Condensed Consolidated Balance Sheet
The adjustments to the pro forma condensed consolidated balance sheet of the Company are as of September 30, 2010.
(A) Reflects the historical consolidated balance sheet of the Company as of September 30, 2010.
(B) Represents the purchase price of the assets acquired on October 27, 2010 by the Company in conjunction with the acquisition of NIP. The total cost of $73,000,000 was funded using net proceeds from our public offering. Of the $1,515,000 in total acquisition costs, $1,087,500, or 1.5% of the purchase price, was paid to CBRE Advisors LLC, the Investment Advisor of the Company, upon closing.
(C) Represents the purchase price of the assets acquired on November 15, 2010 by the Company in conjunction with the acquisition of Pacific. The total cost of $144,500,000 was funded using net proceeds from our public offering. Of the $3,073,000 in total acquisition costs, $2,168,000, or 1.5% of the purchase price, was paid to the Investment Advisor, upon closing.
(D) Represents the net cash proceeds from the Duke Financing received on November 24, 2010 after financing costs and reserves. The Duke joint venture, through certain of its subsidiaries, entered into a $92,000,000 mortgage loan with Metropolitan Life Insurance Company. Our pro rata share of this mortgage is $73,600,000 based on our 80% ownership of the Duke joint venture. This mortgage carries a fixed interest rate of 4.25%, a term of five years, is secured on a cross-collateralized basis by nine of the Duke joint venture’s properties (22535 Colonial Pkwy, Celebration Office 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) and may be prepaid subject to the satisfaction of certain conditions.
(E) Represents the cash contribution made in the Duke joint venture in conjunction with the closing of the Duke Tranche I on December 21, 2010. The total investment of $139,080,000, based on our 80% ownership of the Duke joint venture was funded using net proceeds from our public offering. Of the $2,897,000 in total acquisition costs, $2,086,200, or 1.5% of 80% of the agreed value of the properties was paid to the Investment Advisor upon closing.
Adjustments to Pro Forma Condensed Consolidated Statements of Operations
The adjustments to the pro forma condensed consolidated statement of operations of the Company for the nine months ended September 30, 2010 are as follows:
(AA) Reflects the historical condensed consolidated statement of operations for the nine months ended September 30, 2010.
(BB) Reflects the historical statement of operations for the nine months ended September 30, 2010 for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. Revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis. Historical depreciation and amortization and an increase in the investment management fee are included in the pro forma adjustments reflected in (LL).
(CC) Reflects the historical equity in income of unconsolidated interest in the Duke Tranche I for the nine months ended September 30, 2010 as if the properties were acquired on January 1, 2009. The properties were acquired by the Duke joint venture on December 21, 2010. The underlying revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis. Historical depreciation and amortization and an increase in the investment management fee are included in the pro forma adjustments reflected in (MM).
(DD) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the Duke North Carolina Portfolio as if the properties were acquired on January 1, 2009. The properties were acquired by the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense and an increase in the investment management fee through March 30, 2010 (the date prior to acquisition).
F-10
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Duke North Carolina Portfolio.
(EE) Reflects the pro forma adjustment for 5160 Hacienda Drive in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 5160 Hacienda Drive on April 8, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through April 7, 2010 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 5160 Hacienda Drive property.
(FF) Reflects the pro forma adjustment for 10450 Pacific Center Court in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 10450 Pacific Center Court on May 7, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through May 6, 2010 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 10450 Pacific Center Court property.
(GG) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the UK JV as if the properties were acquired on January 1, 2009. The properties were acquired by the UK JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 9, 2010 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the UK JV.
(HH) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the European JV as if the properties were acquired on January 1, 2009. The properties were acquired by the European JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 9, 2010 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the European JV.
(II) Reflects the pro forma adjustment for 225 Summit Avenue in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 225 Summit Avenue on June 21, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 20, 2010 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the European JV.
(JJ) Reflects the pro forma adjustment for One Wayside Road in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired One Wayside Road on June 24, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 23, 2010 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the One Wayside Road property.
(KK) Reflects the pro forma adjustment for 100 Tice Blvd. in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 100 Tice Blvd. on September 28, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through September 27, 2010 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 100 Tice Blvd. property.
F-11
(LL) Reflects the pro forma adjustment for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. The pro forma adjustment includes depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through September 30, 2010.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of NIP.
(MM) Reflects the pro forma adjustment for Duke Tranche I in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired Duke Tranche I on December 21, 2010. The underlying pro forma adjustment includes depreciation and amortization expense and an increase in the investment management fee through September 30, 2010.
The adjustments to the Pro Forma Condensed Consolidated Statements of Operations of the Company for the Year Ended December 31, 2009 are as follows:
(NN) Reflects the historical condensed consolidated statement of operations of the Company for the year ended December 31, 2009.
(OO) Reflects the historical statement of operations for the year ended December 31, 2009 for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. Revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis.
Historical depreciation and amortization expense, acquisition expenses and an increase in the investment management fee are included in the pro forma adjustments reflected in (FFF).
(PP) Reflects the historical equity in income of unconsolidated interest in the Duke Tranche I for the year ended December 31, 2009 as if the properties were acquired on January 1, 2009. The properties were acquired by the Duke joint venture on December 21, 2010. The underlying revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis. Historical depreciation and amortization, acquisition expenses and an increase in the investment management fee are included in the pro forma adjustments reflected in (GGG).
(QQ) Reflects the pro forma adjustment for 13201 Wilfred Lane in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 13201 Wilfred Lane on June 29, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through June 28, 2009 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 13201 Wilfred Lane property.
(RR) Reflects the pro forma adjustment for Comcast in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired Comcast on July 1, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through June 30, 2009 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Comcast property.
(SS) Reflects the pro forma adjustment for Ingenuity in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired Ingenuity on August 5, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through August 4, 2009 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Ingenuity property.
(TT) Reflects the pro forma adjustment of equity in income of unconsolidated interest in Duke NP III as if the property was acquired on January 1, 2009. The property was contributed to the joint venture on October 15, 2009. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through October 14, 2009 (the date prior to contribution into the joint venture).
F-12
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Duke NP III property.
(UU) Reflects the pro forma adjustment for West Point in order to present the operations as if the property was acquired on January 9, 2009. The Company acquired West Point on December 30, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 29, 2009 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the West Point property.
(VV) Reflects the pro forma adjustment for Miramar I in order to present the operations as if the property was acquired and contributed to the Duke joint venture on January 1, 2009. The Company acquired Miramar I on December 31, 2009 and contributed the property to the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities include the recognition of revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 30, 2009 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Miramar I property.
(WW) Reflects the pro forma adjustment for Miramar II in order to present the operations as if the property was acquired and contributed to the Duke joint venture on January 1, 2009. The Company acquired Miramar II on December 31, 2009 and contributed the property to the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities include the recognition of revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 30, 2009 (the date prior to acquisition).
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Miramar II property.
(XX) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the Duke North Carolina Portfolio as if the properties were acquired on January 1, 2009. The properties were contributed by Duke to the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Duke North Carolina Portfolio.
(YY) Reflects the pro forma adjustment for 5160 Hacienda Drive in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 5160 Hacienda Drive on April 8, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 5160 Hacienda Drive property.
(ZZ) Reflects the pro forma adjustment for 10450 Pacific Center Court in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 10450 Pacific Center Court on April 8, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 10450 Pacific Center Court property.
(AAA) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the UK JV as if the properties were acquired on January 1, 2009. The properties were contributed to the UK JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense plus acquisition expenses and an increase in the investment management fee through December 31, 2009.
F-13
Net (income) attributable to non-controlling operating partnership units reflect an adjustment for the allocable portion of the pro forma income of the UK JV.
(BBB) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the European JV as if the properties were acquired on January 1, 2009. The properties were contributed to the European JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense plus acquisition expenses and an increase in the investment management fee through December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the European JV.
(CCC) Reflects the pro forma adjustment for 225 Summit Avenue in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 225 Summit Avenue on June 21, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 225 Summit Avenue property.
(DDD) Reflects the pro forma adjustment for One Wayside Road in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired One Wayside Road on June 24, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the One Wayside Road property.
(EEE) Reflects the pro forma adjustment for 100 Tice Blvd. in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 100 Tice Blvd. on September 28, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 100 Tice Blvd. property.
(FFF) Reflects the pro forma adjustment for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. The pro forma adjustment includes depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of NIP.
(GGG) Reflects the pro forma adjustment for Duke Tranche I in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired Duke Tranche I on December 21, 2010. The underlying pro forma adjustment includes depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.
Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of Duke Tranche I.
F-14
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 hereunto duly authorized.
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| | | | CB RICHARD ELLIS REALTY TRUST |
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| February 11, 2011 | | | | By: | | /S/ PHILIP L. KIANKA |
| | | | Name: | | Philip L. Kianka |
| | | | Title: | | Chief Operating Officer |
