SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000 Commission file number 2-20111
COUSINS PROPERTIES INCORPORATED
A GEORGIA CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NO. 58-0869052
2500 WINDY RIDGE PARKWAY
ATLANTA, GEORGIA 30339
TELEPHONE: 770-955-2200
Securities registered pursuant to Section 12(b) of the Act: Common Stock
($1 Par Value)
Name of exchange on which registered: New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
As of March 9, 2001, 49,500,617 shares of common stock were outstanding;
and the aggregate market value of the common stock of Cousins Properties
Incorporated held by nonaffiliates was $919,520,223.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents have been incorporated by reference into the
designated Part of this Form 10-K:
Registrant's Proxy Statement Part III, Items 10, 11, 12 and 13
dated March 30, 2001
Registrant's Annual Report to Part II, Items 5, 6, 7 and 8
Stockholders for the year
ended December 31, 2000
PART I
------
Item 1. Business
- --------------------
Corporate Profile
Cousins Properties Incorporated (the "Registrant" or "Cousins") is a
Georgia corporation, which since 1987 has elected to be taxed as a real estate
investment trust ("REIT"). Cousins Real Estate Corporation and its subsidiaries
("CREC") is a taxable entity consolidated with the Registrant, which owns,
develops, and manages a portion of the Registrant's real estate portfolio. CREC
II Inc. and its subsidiaries ("CREC II") is another taxable entity which owns a
75% interest (100% as of February 28, 2001) in Cousins Stone LP, an
unconsolidated joint venture which is a full-service real estate company
headquartered in Dallas, Texas that specializes in third party property
management, development and leasing of Class A office buildings. The Registrant,
together with CREC and CREC II, is hereafter referred to as the "Company."
Cousins is an Atlanta-based, fully integrated, self administered equity
REIT. The Company has extensive experience in the real estate industry,
including the acquisition, financing, development, management and leasing of
properties. Cousins has been a public company since 1962, and its common stock
trades on the New York Stock Exchange. The Company owns a portfolio of
well-located, high-quality retail, office, medical office and land development
projects and holds several tracts of strategically located undeveloped land. The
strategies employed to achieve the Company's investment goals include the
development of properties which are substantially precommitted to quality
tenants; maintaining high levels of occupancy within owned properties; the
selective sale of assets; the creation of joint venture arrangements and the
acquisition of quality income-producing properties at attractive prices. The
Company also seeks to be opportunistic and take advantage of normal real estate
business cycles.
Unless otherwise indicated, the notes referenced in the discussion
below are the "Notes to Consolidated Financial Statements" included in the
financial section of the Registrant's 2000 Annual Report to Stockholders.
Brief Description of Company Investments
Office. As of March 15, 2001, the Company's office portfolio
-------
included the following thirty-seven commercial office buildings:
Company's Percent
Economic Leased
Metropolitan Rentable Ownership (Fully
Property Description Area Square Feet Interest Executed)
------------------------ ----------------- ----------- --------- ---------
Inforum Atlanta, GA 988,000 100% 99%
101 Independence Center Charlotte, NC 526,000 100% 99%
101 Second Street San Francisco, CA 387,000 100% (b) 92%
55 Second Street San Francisco, CA 375,000 100% (b) 87% (a)
AT&T Wireless Services
Headquarters Los Angeles, CA 222,000 100% 100%
The Points at Waterview Dallas, TX 200,000 100% 100%
Lakeshore Park Plaza Birmingham, AL 190,000 100% (b) 89%
3100 Windy Hill Road Atlanta, GA 188,000 100% 100%
333 John Carlyle Washington, D.C. 153,000 100% 93%
555 North Point Center East Atlanta, GA 152,000 100% 95%
615 Peachtree Street Atlanta, GA 149,000 100% 95%
333 North Point Center East Atlanta, GA 129,000 100% 100%
600 University Park Place Birmingham, AL 123,000 100% (b) 91%
3301 Windy Ridge Parkway Atlanta, GA 107,000 100% 100%
Cerritos Corporate Center -
Phase II Los Angeles, CA 104,000 100% 100% (a)
1900 Duke Street Washington, D.C. 97,000 100% 97% (a)
One Georgia Center Atlanta, GA 363,000 88.50% 98%
Bank of America Plaza Atlanta, GA 1,261,000 50% 100%
Gateway Village Charlotte, NC 1,065,000 50% 100% (a)
3200 Windy Hill Road Atlanta, GA 687,000 50% 100%
2300 Windy Ridge Parkway Atlanta, GA 635,000 50% 100%
The Pinnacle Atlanta, GA 423,000 50% 98%
1155 Perimeter Center West Atlanta, GA 362,000 50% 100% (a)
2500 Windy Ridge Parkway Atlanta, GA 314,000 50% 100%
Two Live Oak Center Atlanta, GA 278,000 50% 100%
4200 Wildwood Parkway Atlanta, GA 260,000 50% 100%
Ten Peachtree Place Atlanta, GA 259,000 50% 100%
John Marshall - II Washington, D.C. 224,000 50% 100%
Austin Research Park -
Building IV Austin, TX 184,000 50% 100% (a)
Austin Research Park -
Building III Austin, TX 174,000 50% 100% (a)
4300 Wildwood Parkway Atlanta, GA 150,000 50% 100%
4100 Wildwood Parkway Atlanta, GA 100,000 50% 100%
First Union Tower Greensboro, NC 322,000 11.50% 90%
Grandview II Birmingham, AL 149,000 11.50% 100%
200 North Point Center East Atlanta, GA 130,000 11.50% 95%
100 North Point Center East Atlanta, GA 128,000 11.50% 95%
One Ninety One Peachtree Tower Atlanta, GA 1,215,000 9.80% 97%
----------
12,773,000
==========
(a) Under construction and/or in lease-up.
(b) These projects are actually owned in ventures in which a portion of
the upside is shared with the other venturer. See "Major
Properties" - "101 Second Street," "55 Second Street" and
"Cousins/Daniel LLC" where discussed.
The weighted average leased percentage of these office buildings
(excluding all properties currently under construction and/or in lease-up and
One Ninety One Peachtree Tower, as it is less than 10% owned by the Company) was
approximately 98% as of March 15, 2001 and the leases expire as follows:
2010
&
2001 2002 2003 2004 2005 2006 2007 2008 2009 Thereafter Total
---- ---- ---- ---- ---- ---- ---- ---- ---- ---------- -----
OFFICE
- ------
Consolidated:
- -------------
Square Feet
Expiring (d) 181,596 43,284 252,578 239,738 373,412 323,515 139,217 291,121 814,349 738,887 3,397,697(b)
% of Leased Space 5% 1% 7% 7% 11% 10% 4% 9% 24% 22% 100%
Annual Base
Rent (a) 2,992,480 622,175 3,168,316 3,936,756 7,353,306 4,938,730 2,968,888 6,292,968 15,897,726 19,167,139 67,338,484
Annual Base
Rent/Sq.
Ft. (a) 16.48 14.37 12.54 16.42 19.69 15.27 21.33 21.62 19.52 25.94 19.82
Joint Venture:
- --------------
Square Feet
Expiring (d) 551,464 530,284 408,423 434,237 674,426 540,391 684,114 45,005 353,175 1,392,411 5,613,930(c)
% of Leased Space 10% 9% 7% 8% 12% 10% 12% 1% 6% 25% 100%
Annual Base
Rent (a) 7,986,474 9,762,968 7,171,870 8,068,152 12,369,978 9,722,610 16,791,309 888,817 8,050,731 33,532,817 114,345,726
Annual Base
Rent/Sq.
Ft. (a) 14.48 18.41 17.56 18.58 18.34 17.99 24.54 19.75 22.80 24.08 20.37
Total (including only Company's % share of Joint Venture Properties):
- ---------------------------------------------------------------------
Square Feet
Expiring (d) 411,278 292,658 469,176 514,014 675,016 581,929 465,614 298,771 961,680 1,407,675 6,077,811
% of Leased Space 7% 5% 8% 8% 11% 9% 8% 5% 16% 23% 100%
Annual Base
Rent (a) 6,087,272 5,171,282 6,953,603 8,919,341 12,973,745 9,613,705 11,100,869 6,448,431 19,411,828 35,387,371 122,067,447
Annual Base
Rent/Sq.
Ft. (a) 14.80 17.67 14.82 17.35 19.22 16.52 23.84 21.58 20.19 25.14 20.08
(a) Annual base rent excludes the operating expense reimbursement portion of the
rent payable. If the lease does not provide for pass through of such
operating expense reimbursements, an estimate of operating expenses is
deducted from the rental rate shown. The base rental rate shown is the
estimated rate in the year of expiration. Amounts disclosed are in dollars.
(b) Rentable square feet leased as of March 15, 2001 out of approximately
3,514,000 total rentable square feet.
(c) Rentable square feet leased as of March 15, 2001 out of approximately
5,683,000 total rentable square feet.
(d) Where a tenant has the option to cancel its lease without penalty, the lease
expiration date used in the table above reflects the cancellation option
date rather than the lease expiration date.
The weighted average remaining lease term of these twenty-nine office
buildings was approximately 7 years as of March 15, 2001. Most of the Company's
leases in these buildings provide for pass through of operating expenses and
base rents which escalate over time.
Medical Office. As of March 15, 2001, the Company's medical office
---------------
portfolio included the following six medical office properties:
Company's Percent
Economic Leased
Metropolitan Rentable Ownership (Fully
Property Description Area Square Feet Interest Executed)
-------------------- ------------- ----------- --------- ---------
Northside/Alpharetta II Atlanta, GA 198,000 100% 74%
Meridian Mark Plaza Atlanta, GA 159,000 100% 99%
Northside/Alpharetta I Atlanta, GA 103,000 100% 100%
AtheroGenics Atlanta, GA 50,000 100% 100%
Crawford Long Medical
Office Building Atlanta, GA 366,000 50% 51% (a)
Presbyterian Medical Plaza
at University Charlotte, NC 69,000 11.50% 100%
-------
945,000
=======
(a) Under construction and in lease-up.
The weighted average leased percentage of these medical office
buildings (excluding the property currently under construction and in lease-up)
was 90% as of March 15, 2001 and the leases expire as follows:
2010
&
2001 2002 2003 2004 2005 2006 2007 2008 2009 Thereafter Total
---- ---- ---- ---- ---- ---- ---- ---- ---- ---------- -----
MEDICAL OFFICE
- --------------
Consolidated:
- -------------
Square Feet
Expiring 4,970 4,290 35,388 48,066 23,723 4,884 20,012 40,652 124,823 147,088 453,896(b)
% of Leased Space 1% 1% 8% 11% 5% 1% 4% 9% 28% 32% 100%
Annual Base
Rent (a) 86,230 72,415 676,258 893,333 409,956 90,102 417,130 915,237 2,547,438 3,606,703 9,714,802
Annual Base
Rent/Sq.
Ft. (a) 17.35 16.88 19.11 18.59 17.28 18.45 20.84 22.51 20.41 24.52 21.40
Joint Venture:
- --------------
Square Feet
Expiring 0 1,397 0 0 3,445 0 23,359 0 0 40,503 68,704(c)
% of Leased Space 0% 2% 0% 0% 5% 0% 34% 0% 0% 59% 100%
Annual Base
Rent (a) 0 21,109 0 0 56,498 0 390,329 0 0 772,392 1,240,328
Annual Base
Rent/Sq.
Ft. (a) 0 15.11 0 0 16.40 0 16.71 0 0 19.07 18.05
Total (including only Company's % share of Joint Venture Properties):
- ---------------------------------------------------------------------
Square Feet
Expiring 4,970 4,451 35,388 48,066 24,119 4,884 22,698 40,652 124,823 151,780 461,831
% of Leased Space 1% 1% 8% 10% 5% 1% 5% 9% 27% 33% 100%
Annual Base
Rent (a) 86,230 74,843 676,258 893,333 416,453 90,102 462,018 915,237 2,547,438 3,695,528 9,857,440
Annual Base
Rent/Sq.
Ft. (a) 17.35 16.81 19.11 18.59 17.27 18.45 20.36 22.51 20.41 24.35 21.34
(a) Annual base rent excludes the operating expense reimbursement portion of the
rent payable. If the lease does not provide for pass through of such
operating expense reimbursements, an estimate of operating expenses is
deducted from the rental rate shown. The base rental rate shown is the
estimated rate in the year of expiration. Amounts disclosed are in dollars.
(b) Rentable square feet leased as of March 15, 2001 out of approximately
510,000 total rentable square feet.
(c) Rentable square feet leased as of March 15, 2001 out of approximately 69,000
total rentable square feet.
The weighted average remaining lease term of these five medical office
buildings was approximately 9 years as of March 15, 2001. The Company's leases
in these medical office buildings provide for pass through of operating expenses
and base rents which escalate over time.
Retail. As of March 15, 2001, the Company's retail portfolio included
-------
the following twelve properties:
Company's Percent
Rentable Economic Leased
Metropolitan Square Feet Ownership (Fully
Property Description Area (Company Owned) Interest Executed)
-------------------------- ------------------------ --------------- -------- ---------
Presidential MarketCenter Atlanta, GA 374,000 100% 97%
The Avenue of the Peninsula Rolling Hills Estates, CA 369,000 100% 83%
The Avenue East Cobb Atlanta, GA 225,000 100% 100%
Perimeter Expo Atlanta, GA 176,000 100% 100%
Salem Road Station Atlanta, GA 67,000 100% 81% (a)
Mira Mesa MarketCenter San Diego, CA 447,000 88.50% 100%
The Avenue Peachtree City Atlanta, GA 167,000 88.50% 56% (a)
The Shops at World Golf Village St. Augustine, FL 80,000 50% 78%
Greenbrier MarketCenter Chesapeake, VA 493,000 11.50% 99%
North Point MarketCenter Atlanta, GA 401,000 11.50% 100%
Los Altos MarketCenter Long Beach, CA 157,000 11.50% 100%
Mansell Crossing Phase II Atlanta, GA 103,000 11.50% 91%
---------
3,059,000
=========
(a) Under construction and/or in lease-up.
The weighted average leased percentage of these retail properties
(excluding all properties currently under construction and/or in lease-up) was
approximately 95% as of March 15, 2001, and the leases expire as follows:
2010
&
2001 2002 2003 2004 2005 2006 2007 2008 2009 Thereafter Total
---- ---- ---- ---- ---- ---- ---- ---- ---- ---------- -----
RETAIL
- ------
Consolidated:
- -------------
Square Feet
Expiring 19,678 24,367 4,749 90,084 116,815 79,369 10,414 40,327 28,259 644,462 1,058,524(b)
% of Leased Space 2% 2% 0% 9% 11% 7% 1% 4% 3% 61% 100%
Annual Base
Rent (a) 148,916 435,734 118,766 1,673,370 2,918,856 2,069,214 289,075 501,518 710,634 12,663,004 21,529,087
Annual Base
Rent/Sq.
Ft. (a) 7.57 17.88 25.01 18.58 24.99 26.07 27.76 12.44 25.15 19.65 20.34
Joint Venture:
- --------------
Square Feet
Expiring 44,243 52,398 10,411 26,840 86,176 98,000 25,023 4,719 59,033 1,242,080 1,648,923(c)
% of Leased Space 3% 3% 1% 2% 5% 6% 2% 0% 3% 75% 100%
Annual Base
Rent (a) 618,218 816,070 192,745 582,098 1,558,165 1,103,770 675,322 75,504 642,363 17,125,005 23,389,260
Annual Base
Rent/Sq.
Ft. (a) 13.97 15.57 18.51 21.69 18.08 11.26 26.99 16.00 10.88 13.79 14.18
Total (including only Company's % share of Joint Venture Properties):
- ---------------------------------------------------------------------
Square Feet
Expiring 24,766 30,393 5,946 94,354 159,663 92,949 18,274 40,870 35,596 1,112,733 1,615,544
% of Leased Space 1% 2% 0% 6% 10% 6% 1% 3% 2% 69% 100%
Annual Base
Rent (a) 220,011 529,582 140,932 1,769,899 3,864,027 2,297,533 509,219 510,201 800,096 19,843,335 30,484,835
Annual Base
Rent /Sq.
Ft.(a) 8.88 17.42 23.70 18.76 24.20 24.72 27.87 12.48 22.48 17.83 18.87
(a)Annual base rent excludes the operating expense reimbursement portion of the
rent payable and any percentage rents due. If the lease does not provide for
pass through of such operating expense reimbursements, an estimate of
operating expenses is deducted from the rental rate shown. The base rental
rate shown is the estimated rate in the year of expiration. Amounts disclosed
are in dollars.
(b)Gross leasable area leased as of March 15, 2001 out of approximately
1,144,000 total gross leasable area.
(c)Gross leasable area leased as of March 15, 2001 out of approximately
1,681,000 total gross leasable area.
The weighted average remaining lease term of these ten retail
properties was approximately 11 years as of March 15, 2001. Most of the major
tenant leases in these retail properties provide for pass through of operating
expenses and base rents which escalate over time.
Other. The Company's other real estate holdings include equity
interests in approximately 377 acres of strategically located land held for
investment and future development at North Point and Wildwood Office Park, the
option to acquire the fee simple interest in approximately 9,600 acres of land
through its Temco Associates joint venture, and two mortgage notes for an
aggregate of approximately $24 million which are secured by a 250,000 square
foot office building in Washington, D.C. The terms of these two notes have some
of the characteristics of an equity investment and should provide a comparable
return on investment (see Note 3).
The Company's joint venture partners include either the company as
named or an affiliate of the company named and are as follows: IBM, The
Coca-Cola Company ("Coca-Cola"), Bank of America Corporation ("Bank of
America"), The Prudential Insurance Company of America ("Prudential"),
Temple-Inland Inc., Equity Office Properties Trust, CommonWealth Pacific, LLC
("CommonWealth") and CarrAmerica Realty Corporation.
Refer to Item 2 hereof for a more detailed description of the Company's
real estate properties.
Significant Changes in 2000
Significant changes in the Company's business and properties during the
year ended December 31, 2000 were as follows:
Office Division. In January 2000, 1155 Perimeter Center West, an
approximately 362,000 rentable square foot office building in Atlanta, Georgia,
owned by 285 Venture, LLC (see Note 5), became partially operational for
financial reporting purposes. Also in January 2000, Crawford Long - CPI, LLC
(see Note 5) commenced construction of the Crawford Long medical office
building, an approximately 366,000 rentable square foot medical office building
in Atlanta, Georgia. In February 2000, 555 North Point Center East, an
approximately 152,000 rentable square foot office building in suburban Atlanta,
Georgia, became partially operational for financial reporting purposes. In April
2000, 101 Second Street, an approximately 387,000 rentable square foot office
building in San Francisco, California, became partially operational for
financial reporting purposes.
In June 2000, 600 University Park Place, an approximately 123,000
rentable square foot office building in Birmingham, Alabama, became partially
operational for financial reporting purposes. Also in June 2000, CPI/FSP I, L.P.
(see Note 5) commenced construction of Austin Research Park - Buildings III and
IV, two approximately 174,000 and 184,000 rentable square foot office buildings,
respectively, in Austin, Texas. CPI/FSP I, L.P. also owns an additional parcel
of land upon which a third building of approximately 184,000 rentable square
feet could be developed. In October 2000, 1900 Duke Street, an approximately
97,000 rentable square foot office building in suburban Washington, D.C., became
partially operational for financial reporting purposes. In November 2000,
Gateway Village, an approximately 1.1 million rentable square foot office
building complex in Charlotte, North Carolina (see Note 5), became partially
operational for financial reporting purposes.
In December 2000, CP Venture Three LLC acquired One Georgia Center, an
approximately 363,000 rentable square foot office building in midtown Atlanta,
Georgia. The purchase price of the building was approximately $35.8 million,
which includes an additional parcel of land upon which a second building of
approximately 288,000 rentable square feet could be developed. Also in December
2000, the Company purchased The Points at Waterview, an approximately 200,000
rentable square foot office building in suburban Dallas, Texas. The purchase
price was approximately $25.4 million which includes an adjacent parcel of land
upon which a second building of approximately 60,000 rentable square feet could
be developed.
Retail Division. In March 2000, the Company sold Laguna Niguel
Promenade, an approximately 154,000 square foot retail center in Laguna Niguel,
California, for $26.7 million which was approximately $6.4 million over the cost
of the center. Including depreciation recapture of approximately $.8 million,
the net gain on the sale was approximately $7.2 million.
In April 2000, Mira Mesa MarketCenter, an approximately 447,000 square
foot retail center in suburban San Diego, California, became partially
operational for financial reporting purposes. In May 2000, The Avenue of the
Peninsula, a 369,000 square foot retail center in Rolling Hills Estates,
California, became partially operational for financial reporting purposes. In
October 2000, Salem Road Station, an approximately 67,000 square foot
neighborhood retail center in suburban Atlanta, Georgia, became partially
operational for financial reporting purposes.
Land Division. The Company is currently developing or has developed
seven residential communities in suburban Atlanta, Georgia, including four in
which development commenced in 1994, one in 1995, one in 1996 and one in 2000.
These developments currently include land on which approximately 1,879 lots are
being or were developed, of which 217, 292 and 344 lots were sold in 2000, 1999
and 1998, respectively. As of December 31, 2000, all of the lots in four of the
seven residential communities had been sold.
In November 1998, Temco Associates began development of the Bentwater
residential community in suburban Atlanta, Georgia, which will consist of
approximately 1,735 lots on approximately 1,290 acres (see Note 5). Temco
Associates sold 219 and 106 lots within Bentwater in 2000 and 1999,
respectively.
Financings. In April 2000, the Company completed the $90 million
financing of 101 Second Street. This non-recourse mortgage note payable has an
interest rate of 8.33% and a maturity of April 27, 2010. In July 2000, the
Company completed the $39 million financing of The Avenue East Cobb. This
non-recourse mortgage note payable has an interest rate of 8.39% and a maturity
of August 1, 2010. In August 2000, the Company completed the $25.5 million
financing of Meridian Mark Plaza. This non-recourse mortgage note payable has an
interest rate of 8.27% and a maturity of October 1, 2010.
In October 2000, the Company repaid in full upon its maturity the note
payable to First Union National Bank that was secured by the Company's interest
in the 650 Massachusetts Avenue mortgage notes (see Note 3).
In December 2000, the Company's credit facility was temporarily
increased from $150 million to $225 million, which temporary increase expires
June 30, 2001 (see Note 4).
Environmental Matters
Under various federal, state and local laws, ordinances and
regulations, an owner or operator of real estate is generally liable for the
costs of removal or remediation of certain hazardous or toxic substances on or
in such property. Such laws often impose liability without regard to whether the
owner knew of, or was responsible for, the presence of such hazardous or toxic
substances. The presence of such substances, or the failure to remediate such
substances properly, may subject the owner to substantial liability and may
adversely affect the owner's ability to develop the property or to borrow using
such real estate as collateral. The Company is not aware of any environmental
liability that the Company's management believes would have a material adverse
effect on the Company's business, assets or results of operations.
Certain environmental laws impose liability on a previous owner of
property to the extent that hazardous or toxic substances were present during
the prior ownership period. A transfer of the property does not relieve an owner
of such liability. Thus, although the Company is not aware of any such
situation, the Company may be liable in respect of properties previously sold.
In connection with the development or acquisition of certain
properties, the Company obtained Phase One environmental audits (which generally
involve inspection without soil sampling or ground water analysis) from
independent environmental consultants. The remaining properties (including most
of the Company's land held for investment) have not been so examined. No
assurance can be given that no environmental liabilities exist, that the reports
reviewed all environmental liabilities, or that no prior owner created any
material environmental condition not known to the Company.
The Company believes that it and its properties are in compliance in
all material respects with all federal, state and local laws, ordinances and
regulations regarding hazardous or toxic substances.
Competition
Our properties compete for tenants with similar properties located in
our markets primarily on the basis of location, rent charged, services provided
and the design and condition of the facilities. We also compete with other
REITs, financial institutions, pension funds, partnerships, individual investors
and others when attempting to acquire and develop properties.
Forward-Looking Statements
This Annual Report on Form 10-K includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and are subject
to uncertainties and risks. Although the Company believes that its plans,
intentions and expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such plans, intentions or expectations
will be achieved. Important factors that could cause actual results to differ
materially from the Company's forward-looking statements include, but are not
limited to, general and local economic conditions, local real estate conditions,
the activity of others developing competitive projects, the cyclical nature of
the real estate industry, interest rates, the Company's ability to obtain
favorable financing or zoning, the environmental impact and other governmental
regulations. The risk factors are described in more detail in the Company's
Current Report on Form 8-K, dated March 9, 2001, filed with the Securities and
Exchange Commission.
Subsequent Events
On February 21, 2001, the Company sold Colonial Plaza MarketCenter, an
approximately 480,000 square foot retail center in Orlando, Florida for $54
million, which was approximately $10.8 million over the cost of the center.
Including depreciation recapture of approximately $6.2 million, the net gain on
the sale was approximately $17 million.
Executive Offices; Employees
The Registrant's executive offices are located at 2500 Windy Ridge
Parkway, Suite 1600, Atlanta, Georgia 30339-5683. At December 31, 2000, the
Company employed 396 people.
Item 2. Properties
- ----------------------
Table of Major Properties
The following tables set forth certain information relating to major
office, medical office and retail properties, stand alone retail lease sites,
and land held for investment and future development in which the Company has a
10% or greater ownership interest. All information presented is as of December
31, 2000, except leasing information which is as of March 15, 2001. Dollars are
stated in thousands.
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Office
- ------
Inforum
Atlanta, GA
30303-1032 1999 N/A 100% 988,000 99% 87%
4 Acres (2)
101 Independence Center
Charlotte, NC
28246-1000 1996 N/A 100% 526,000 99% 98%
2 Acres
101 Second Street
San Francisco, CA
94105-3601 2000 Myers Second 100%(6) 387,000 92% 80%(7)
Street Company 1 Acre
LLC
55 Second Street
San Francisco, CA
94105-3601 (8) Myers Bay 100%(6) 375,00 87%(8) (8)
Area Company LLC 1 Acre
AT&T Wireless Services
Headquarters
Suburban Los Angeles, CA
90703-8573 1999 N/A(6) 100%(6) 222,000 100% 100%
6 Acres (9)
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Office
- ------
Inforum
Atlanta, GA
30303-1032 BellSouth Corporation (3)(2009) 277,744 $ 86,083 $ 0 N/A
Georgia Lottery Corp. (2003/2013) 127,827 $ 75,834
Lockwood Greene Engineers, Inc. 125,916
(2007/2012)
Co Space Services, LLC 110,797
(2020/2025)
Turner Broadcasting (2006/2016)(4) 57,827
Sapient Corporation (2009/2019) 57,689
101 Independence Center
Charlotte, NC
28246-1000 Bank of America (3) 359,327 $ 76,964 $ 46,727 12/1/07
(2008/2028)(5) $ 64,709 8.22%
Robinson Bradshaw & Hinson, 82,218
P.A. (2004/2009)
Ernst & Young LLP (2004) 24,125
101 Second Street
San Francisco, CA
94105-3601 Arthur Andersen LLP 147,986 $ 97,577 $ 89,597 4/27/10
(2009/2014) $ 93,753 8.33%
Thelen, Reid & Priest 128,299
(2012/2022)
55 Second Street
San Francisco, CA
94105-3601 Digital Island, Inc. (2014/2019)(8) 158,025(8) $ 44,980 $ 0 N/A
Paul Hastings (2017/2027)(8) 68,100(8) (8)
Fritz Companies (2012/2017)(8) 57,117(8)
Preston Gates (2010/2015)(8) 43,469(8)
AT&T Wireless Services
Headquarters
Suburban Los Angeles, CA AT&T Wireless Services 222,000 $ 52,645 $ 0 N/A
(2014/2029) $ 49,639
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Office (Continued)
- ------------------
Cerritos Corporate Center -
Phase II
Suburban Los Angeles, CA
90703-8573 (8) N/A 100% 104,000 100% (8)
3 Acres (9)
The Points at Waterview
Suburban Dallas, Texas
75080-1472 2000 N/A 100% 200,000 100% (10)
15 Acres (10)
Lakeshore Park Plaza
Birmingham, AL
35209-6719 1998 Daniel Realty 100%(6) 190,000 89% 91%
Company 12 Acres
600 University Park Place
Birmingham, AL
35209-6774 2000 Daniel Realty 100%(6) 123,000 91% 49%(11)
Company 10 Acres
333 John Carlyle
Suburban Washington, D.C.
22314-5745 1999 N/A 100% 153,000 93% 89%
1 Acre
1900 Duke Street
Suburban Washington, D.C.
22314-5745 2000 N/A 100% 97,000 97% 22%(12)
1 Acre
333 North Point Center East
Suburban Atlanta, GA
30022-8274 1998 N/A 100% 129,000 100% 98%
9 Acres
555 North Point Center East
Suburban Atlanta, GA
30022-8274 2000 N/A 100% 152,000 95% 72%(13)
10 Acres
615 Peachtree Street
Atlanta, GA
30308-2312 1996 N/A 100% 149,000 95% 82%
2 Acres
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Office (Continued)
- ------------------
Cerritos Corporate Center -
Phase II
Suburban Los Angeles, CA
90703-8573 AT&T Wireless Services 104,000 $ 7,439 $ 0 N/A
(2011/2021)(8) (8)
The Points at Waterview
Suburban Dallas, Texas
75080-1472 STB Systems, Inc. (2001) 89,050 $ 25,468 $ 0 N/A
Cisco Systems, Inc. (2005/2010) 64,897 (10)
Lakeshore Park Plaza
Birmingham, AL
35209-6719 Infinity Insurance (2005/2015) 95,530 $ 16,530 $ 10,498 11/1/08
TCI Southeast (2001) 20,625 $ 15,405 6.78%
600 University Park Place
Birmingham, AL
35209-6774 Southern Company, Inc. (3) 41,961 $ 19,456 $ 0 N/A
(2005/2011) $ 18,739
333 John Carlyle
Suburban Washington, D.C.
22314-5745 A.T. Kearney (2009/2019) 94,115 $ 29,072 $ 0 N/A
$ 27,269
1900 Duke Street
Suburban Washington, D.C.
22314-5745 American Society of Clinical 36,247 $ 26,247 $ 0 N/A
Oncology (2010/2015) $ 20,163
Municipal Securities Rulemaking 47,556
Board (2016/2026)
333 North Point Center East
Suburban Atlanta, GA
30022-8274 Alltel Telecom Information 48,559 $ 13,309 $ 0 N/A
Services, Inc. (2003) $ 11,066
J.C. Bradford (2005/2010) 22,222
555 North Point Center East
Suburban Atlanta, GA
30022-8274 Regus Business Centre 89,688 $ 16,574 $ 0 N/A
(2011/2016)(14) $ 15,712
615 Peachtree Street
Atlanta, GA
30308-2312 Wachovia (3)(2004/2007) 50,073 $ 13,243 $ 0 N/A
$ 10,718
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Office (Continued)
- ------------------
One Georgia Center
Atlanta, GA
30308-3619 2000 Prudential 88.50%(6) 363,000 98% (15)
3 Acres (15)
Wildwood Office Park:
Atlanta, GA
2300 Windy
Ridge Parkway
30339-5671 1987 IBM 50% 635,000 100% 99%
12 Acres
2500 Windy
Ridge Parkway
30339-5683 1985 IBM 50% 314,000 100% 98%
8 Acres
3200 Windy
Hill Road
30339-5609 1991 IBM 50% 687,000 100% 100%
15 Acres
4100 and 4300
Wildwood Parkway
30339-8400 1996 IBM 50% 250,000 100% 100%
13 Acres
4200 Wildwood Parkway
30339-8402 1997 IBM 50% 260,000 100% 100%
8 Acres
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Office (Continued)
- ------------------
One Georgia Center
Atlanta, GA
30308-3619 Norfolk & Southern (2004/2014) 89,041 $ 36,346 $ 0 N/A
SouthTrust Bank (2004/2019) 80,895 $ 36,197
Wildwood Office Park:
Atlanta, GA
2300 Windy
Ridge Parkway
30339-5671 IBM (2002/2012) 99,233 $ 77,645 $ 63,158 12/1/05
Profit Recovery Group 72,191 $ 48,692 7.56%
(2005/2010)(16)
Manhattan Associates, LLC 63,296
(2002/2007)
Financial Services Corporation 62,928
(2006/2011)(16)
Computer Associates 62,445
(2005/2010)
Life Office Management Associates 56,652
(2005/2010)
Docucomp (2002/2007) 55,396
Chevron USA (2005) 51,415
2500 Windy
Ridge Parkway
30339-5683 Coca-Cola Enterprises Inc. 171,037 $ 29,876 $ 22,578 12/15/05
(2003/2008) $ 17,508 7.45%
Cousins Properties Incorporated 43,888
(2003)
3200 Windy
Hill Road
30339-5609 IBM (2006/2011) 418,333 $ 85,615 $ 67,034 1/1/07
PriceWaterhouseCoopers 69,108 $ 58,906 8.23%
(2009/2014)
W.H. Smith Inc. 41,858
(2002/2007)
4100 and 4300
Wildwood Parkway
30339-8400 Georgia-Pacific 250,000 $ 29,914 $ 28,272 4/1/12
Corporation (2012/2017) $ 25,532 7.65%
(17)(18)
4200 Wildwood Parkway
30339-8402 General Electric (3)(2014/2024) 260,000 $ 36,989 $ 42,787 3/31/14
$ 34,203 6.78%
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Office (Continued)
- ------------------
3301 Windy Ridge
Parkway
30339-5685 1984 N/A 100% 107,000 100% 100%
10 Acres
3100 Windy Hill
Road
30339-5605 1983 N/A 100%(19) 188,000 100% 100%
13 Acres
Bank of America Plaza
Atlanta, GA
30308-2214 1992 Bank of America (3) 50% 1,261,000 100% 100%
4 Acres
Gateway Village
Charlotte, NC
28202-1125 (8) Bank of America (3) 50% 1,065,000 100% 13%(22)
8 Acres
The Pinnacle
Atlanta, GA
30326-1234 1999 LORET 50% 423,000 98% 92%
Holdings, L.L.L.P. 4 Acres
Two Live Oak Center
Atlanta, GA
30326-1234 1997 LORET 50% 278,000 100% 99%
Holdings, L.L.L.P. 2 Acres
1155 Perimeter Center West
Atlanta, GA
30338-5416 (8) J. P. Morgan (3) 50% 362,000 100% 34%(23)
6 Acres
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Office (Continued)
- ------------------
3301 Windy Ridge
Parkway
30339-5685 Indus International, Inc. 107,000 $ 10,954 $ 0 N/A
(2012/2017) $ 5,853
3100 Windy Hill
Road
30339-5605 IBM (2006) 188,000 $ 17,005 (19) $ 0 N/A
$ 14,284 (19)
Bank of America Plaza
Atlanta, GA
30308-2214 Bank of America (3) 572,742 $223,686 $ 0 (21) N/A(21)
(2012/2042) $164,157
Troutman Sanders 224,181
(2007/2017)
Ernst & Young LLP 211,211
(2007/2017)(20)
Paul Hastings (2012/2017)(20) 92,224
Hunton & Williams 91,103
(2004/2009)
Gateway Village
Charlotte, NC
28202-1125 Bank of America (2015/2035) 1,065,000 $173,281 $140,618 1/2/02
$172,705 LIBOR
(as defined)
+.50%
The Pinnacle
Atlanta, GA
30326-1234 Merrill Lynch (2010/2011) 72,866 $ 91,759 $ 69,304 12/31/09
A.T. Kearney (2009/2019) 47,866 $ 83,907 7.11%
PaineWebber (2013/2018)(17) 47,631
Two Live Oak Center
Atlanta, GA
30326-1234 SYNAVANT Inc. 75,484 $ 48,844 $ 29,194 12/31/09
(2007/2017) $ 40,480 7.90%
Chubb & Son, Inc. (3) 48,520
(2007/2017)
1155 Perimeter Center West
Atlanta, GA
30338-5416 Mirant Corporation (2015) 360,395 $ 57,498 $ 0 N/A
$ 56,772
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Office (Continued)
- ------------------
Ten Peachtree Place
Atlanta, GA
30309-3814 1991 Coca-Cola (3) 50%(6) 259,000 100% 100%
5 Acres
John Marshall-II
Suburban Washington, D.C.
22102-3802 1996 CarrAmerica Realty 50% 224,000 100% 100%
Corporation (3) 3 Acres
Austin Research Park -
Building III
Austin, TX
78759-2314 (8) CommonWealth 50% 174,000 100% (8)
Pacific, LLC 4 Acres
and CalPERS
Austin Research Park -
Building IV
Austin, TX
78759-2314 (8) CommonWealth 50% 184,000 100% (8)
Pacific, LLC 7 Acres
and CalPERS
First Union Tower
Greensboro, NC
27401-2167 1990 Prudential 11.50%(6) 322,000 90% 89%
1 Acre
Grandview II
Birmingham, AL
35243-1930 1998 Prudential 11.50%(6) 149,000 100% 100%
8 Acres
100 North Point Center East
Suburban Atlanta, GA
30022-4885 1995 Prudential 11.50%(6) 128,000 95% 100%
7 Acres
200 North Point Center East
Suburban Atlanta, GA
30022-4885 1996 Prudential 11.50%(6) 130,000 95% 99%
9 Acres
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Office (Continued)
- ------------------
Ten Peachtree Place
Atlanta, GA
30309-3814 Coca-Cola (3) (2001) 259,000 $ 22,902 $ 16,393 11/30/01 (24)
$ 18,058 8.00%
John Marshall-II
Suburban Washington, D.C.
22102-3802 Booz-Allen & Hamilton 224,000 $ 29,781 $ 21,426 4/1/13
(2011/2016) $ 24,071 7.00%
Austin Research Park -
Building III
Austin, TX
78759-2314 Charles Schwab & Co., Inc. 174,000 $ 12,328 $ 0 N/A
(2011/2031) (8) (8)
Austin Research Park -
Building IV
Austin, TX
78759-2314 Charles Schwab & Co., Inc. 184,000 $ 11,118 $ 0 N/A
(2012/2032) (8) (8)
First Union Tower
Greensboro, NC
27401-2167 Smith Helms Mullis & 70,360 $ 53,663 $ 0 N/A
Moore (2010/2015) $ 41,945
Fist Union Bank (3) 62,622
(2009/2019)
Grandview II
Birmingham, AL
35243-1930 Protective Life (2005/2011) (25) 65,164 $ 23,094 $ 0 N/A
Daniel Realty Company (2008) 23,440 $ 19,956
100 North Point Center East
Suburban Atlanta, GA
30022-4885 Schweitzer-Mauduit 32,696 $ 24,327 $ 11,888 (26) 8/1/07
International, Inc. (2007/2012) $ 18,572 7.86%
Conseco Finance Inc. 21,914
(2006/2011)(17)
200 North Point Center East
Suburban Atlanta, GA
30022-4885 Alltel Telecom Information 48,168 $ 21,735 $ 11,888 (26) 8/1/07
Services, Inc. (2001) $ 16,947 7.86%
Motorola, Inc. (2001/2011) 22,897
APAC Teleservices, Inc. 22,409
(2004/2009)
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Medical Office
- --------------
Northside/Alpharetta I
Suburban Atlanta, GA
30005-3707 1998 N/A 100% 103,000 100% 100%
1 Acre (27)
Suburban Atlanta, GA
30005-3707 1999 N/A 100% 198,000 74% 60%
2 Acres (27)
Meridian Mark Plaza
Atlanta, GA
30342-1613 1999 N/A 100% 159,000 99% 90%
3 Acres
AtheroGenics
Suburban Atlanta, GA
30004-2148 1999 N/A 100% 50,000 100% 100%
4 Acres
Crawford Long Medical
Office Building
Atlanta, GA
30308-9999 (8) Emory University 50% 366,000 51%(8) (8)
(29)
Presbyterian Medical Plaza
at University
Charlotte, NC
28233-3549 1997 Prudential 11.50%(6) 69,000 100% 100%
1 Acre (30)
Retail Centers
- --------------
Presidential MarketCenter
Suburban
Atlanta, GA
30278-2149 1994, N/A 100% 490,000 98% 87%
1996 66 acres overall of
and 2000 of which 97% Company
374,000 of Company owned
and 49 acres owned
are owned
by the
Company
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Medical Office
- --------------
Northside/Alpharetta I
Suburban Atlanta, GA
30005-3707 Northside Hospital (3)(2013) 37,387 $ 15,677 $ 10,247 1/1/06
$ 14,082 7.70%
Northside/Alpharetta II
Suburban Atlanta, GA
30005-3707 Northside Hospital (3)(2019)(28) 64,588 $ 17,809 $ 0 N/A
$ 17,061
Meridian Mark Plaza
Atlanta, GA
30342-1613 Northside Hospital (3) 39,071 $ 24,804 $ 25,441 10/01/10
(2013/2023) $ 24,119 8.27%
Scottish Rite Hospital for 22,035
Crippled Children, Inc.
(2003/2008)
AtheroGenics
Suburban Atlanta, GA
30004-2148 AtheroGenics (2019/2029) 50,000 $ 7,355 $ 0 N/A
$ 6,544
Crawford Long Medical
Office Building
Atlanta, GA
30308-9999 Emory University 118,005(8) $ 7,594 $ 0 N/A
(2017/2047)(8) (8)
Presbyterian Medical Plaza
at University
Charlotte, NC
28233-3549 Novant Health, Inc. 63,862 $ 8,600 $ 0 N/A
(2012/2027)(31) $ 7,752
Retail Centers
- --------------
Presidential MarketCenter
Suburban
Atlanta, GA
30278-2149 Target (32) N/A $ 28,309 $ 0 N/A
Publix Super Market 56,146 $ 24,435
(2019/2044)
Carmike Cinemas (3)(2023/2033) 44,565
Bed, Bath & Beyond (2008/2024) 35,127
T.J. Maxx (2004/2014) 32,000
Office Depot, Inc. (2011/2026) 31,628
Ross (2012/2032) 30,464
Marshalls (2010/2025) 30,000
Gap (2006/2016) 12,000
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Retail Centers (Continued)
- --------------------------
The Avenue of the Peninsula
Rolling Hills Estates, CA
90274-3664 2000 N/A 100% 369,000 83% 59%(33)
14 Acres
Perimeter Expo
Atlanta, GA
30338-1519 1993 N/A 100% 291,000 100% 100%
19 acres overall of
of which 100% of Company
176,000 and Company owned
10 acres are owned
owned by
the Company
The Avenue East Cobb
Suburban Atlanta, GA
30062-8197 1999 N/A 100% 225,000 100% 91%
30 Acres
Salem Road Station
Suburban Atlanta, GA
30016-1863 2000 N/A 100% 67,000 81%(8) 21%(34)
13 Acres
Mira Mesa MarketCenter
Suburban San Diego, CA
92126-2960 2000 Prudential 88.50%(6) 447,000 100% 56%(35)
40 Acres
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Retail Centers (Continued)
- --------------------------
The Avenue of the Peninsula
Rolling Hills Estates, CA
90274-3664 Regal Cinema (2015/2030) 55,673 $ 84,017 $ 0 N/A
Saks & Company (2019/2055) 42,404 $ 82,069
Ice Chalet (2001) 14,068
Restoration Hardware (2010/2020) 11,000
Banana Republic (3)(2005/2015) 9,705
Gap (2005/2015) 9,000
Perimeter Expo
Atlanta, GA
30338-1519 The Home Depot Expo (32) N/A $ 19,816 $ 20,361 8/15/05
Marshalls (2014/2029) 36,598 $ 16,907 8.04%
Best Buy (2014/2029) 36,000
Linens `N Things (2014/2024) 30,351
Office Max (2013/2033) 23,500
The Sport Shoe (2004/2014) 14,348
Gap's Old Navy Store 13,939
(2002/2012)
The Avenue East Cobb
Suburban Atlanta, GA
30062-8197 Borders, Inc. (2015/2030) 24,882 $ 39,675 $ 38,902 8/1/10
Bed, Bath & Beyond (2010/2025) 21,007 $ 36,827 8.39%
Gap (2005/2015) 19,434
Talbot's (2010/2020) 12,905
Pottery Barn (3)(2006/2012) 10,000
Banana Republic (3)(2005/2015) 8,009
Salem Road Station
Suburban Atlanta, GA
30016-1863 Publix Super Market 44,270 $ 6,327 $ 0 N/A
(2020/2040) $ 6,285
Mira Mesa MarketCenter
Suburban San Diego, CA
92126-2960 Home Depot (2020/2045) 105,764 $ 46,821 $ 0 N/A
Edwards Theaters (2020/2035) 94,041 $ 46,116
Albertsons (2020/2060) 55,489
Ross (2010/2025) 30,187
Barnes & Noble Superstores, Inc. 26,566
(2015/2030)
Gap's Old Navy Store (2005/2015) 22,529
Long's Drugs (2021/2041) 21,018
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Retail Centers (Continued)
- --------------------------
The Avenue Peachtree City
Suburban Atlanta, GA
30269-3120 (8) Prudential 88.50%(6) 167,000 56%(8) (8)
18 Acres
The Shops at World Golf Village
St. Augustine, FL
32092-2724 1999 W.C. Bradley Co. 50% 80,000 78% 52%
3 Acres
North Point MarketCenter
Suburban Atlanta, GA
30202-4889 1994/1995 Prudential 11.50%(6) 517,000 100% 99%
60 Acres (36)
of which
401,000 and
49 acres are
owned by
CP Venture
Two LLC
Greenbrier MarketCenter
Chesapeake, VA
23327-2840 1996 Prudential 11.50%(6) 493,000 99% 100%
44 Acres
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Retail Centers (Continued)
- --------------------------
The Avenue Peachtree City
Suburban Atlanta, GA
30269-3120 Harry's in a Hurry (2016/2031)(8) 13,656(8) $ 15,002 $ 0 N/A
Gap (2012/2022)(8) 10,800(8) (8)
The Shops at World Golf Village
St. Augustine, FL
32092-2724 Bradley Specialty Retailing, 31,044 $ 22,529 $ 0 N/A
Inc. (2013/2023) $ 21,018
North Point MarketCenter
Suburban Atlanta, GA
30202-4889 Target (32) N/A $ 56,850 $ 27,611 7/15/05
Babies "R" Us (2011/2031) 50,275 $ 51,793 8.50%
Media Play (2010/2025) 48,884
Marshalls (2010/2025) 40,000
Rhodes (2011/2021) 40,000
Linens `N Things (2005/2025) 35,000
United Artists (2014/2034) 34,733
Circuit City (2015/2030) 33,420
PETsMART (2009/2029) 25,465
Gap's Old Navy Store 20,000
(2006/2011)
Greenbrier MarketCenter
Chesapeake, VA
23327-2840 Target (2016/2046) 117,220 $ 51,210 $ 0 N/A
Harris Teeter, Inc. (2016/2036) 51,806 $ 47,157
Best Buy (2015/2030) 45,106
Bed, Bath & Beyond 40,484
(2012/2027)
Babies "R" Us (2006/2021) 40,000
Stein Mart, Inc. (2006/2026) 36,000
Barnes & Noble Superstores, 29,974
Inc. (2011/2026)
PETsMART (2011/2031) 26,040
Office Max (2011/2026) 23,484
Gap's Old Navy Store 14,000
(2002/2012)
Percentage
Description, Year Rentable Leased Average
Location Development Company's Square Feet as of 2000
and Completed Venture Ownership and Acres March 15, Economic
Zip Code or Acquired Partner Interest as Noted 2001 Occupancy
- ----------- ----------- ------- --------- ----------- ---------- ---------
Retail Centers (Continued)
- --------------------------
Los Altos MarketCenter
Long Beach, CA
90815-3126 1996 Prudential 11.50%(6) 258,000 100% 100%
19 Acres of
which 157,000
and 17 Acres
are owned by
CP Venture
Two LLC
Mansell Crossing Phase II
Suburban Atlanta, GA
30202-4822 1996 Prudential 11.50%(6) 103,000 91% 100%
13 Acres
Stand Alone Retail Sites Adjacent to Company's Office and Retail Projects
- -------------------------------------------------------------------------
Wildwood Office Park
Suburban Atlanta, GA
30339-5671 1985-1993 IBM 50% 14 Acres 100% 100%
North Point
Suburban Atlanta, GA
30202-4885 1993 N/A 100% 24 Acres 100% 100%
Adjusted
Cost and
Adjusted
Cost Less Debt
Description, Major Depreciation Maturity
Location Major Tenants (lease Tenants' and and
and expiration/options Rentable Amortization Debt Interest
Zip Code expiration) Sq. Feet (1) Balance Rate
- ------------ -------------------- -------- ------------- ------- --------
Retail Centers (Continued)
- --------------------------
Los Altos MarketCenter
Long Beach, CA
90815-3126 Sears (32) N/A $ 32,807 $ 0 N/A
Circuit City (3)(2017/2037) 38,541 $ 30,492
Borders, Inc. (2017/2037) 30,000
Bristol Farms (3)(2012/2032) 28,200
CompUSA, Inc. (2011/2021) 25,620
Sav-on Drugs (3)(2016/2026) 16,914
Mansell Crossing Phase II
Suburban Atlanta, GA
30202-4822 Bed Bath & Beyond 40,787 $ 12,450 $ 0 N/A
(2012/2027) $ 11,597
Goody's Family Clothing, 32,144
Inc. (2009/2027)
Rooms To Go (2016/2036) 21,000
Stand Alone Retail Sites Adjacent to Company's Office and Retail Projects
- -------------------------------------------------------------------------
Wildwood Office Park
Suburban Atlanta, GA
30339-5671 N/A N/A $ 8,629 $ 0 N/A
$ 6,894
North Point
Suburban Atlanta, GA
30202-4885 N/A N/A $ 3,692 $ 0 N/A
$ 3,550
(1) Cost as shown in the accompanying table includes deferred leasing and
financing costs and other related assets. For each of the following
projects: 2300 and 2500 Windy Ridge Parkway, 3200 Windy Hill Road, 4100
and 4300 Wildwood Parkway, 4200 Wildwood Parkway and Wildwood Stand Alone
Retail Lease Sites, the cost shown is what the cost would be if Wildwood
Associates' land cost were adjusted downward to the Company's lower basis
in the land it contributed to Wildwood Associates.
(2) Approximately .18 acres of the total 4 acres of land at Inforum is under a
ground lease expiring 2068.
(3) Actual tenant or venture partner is affiliate of entity shown.
(4) Turner Broadcasting has the right to terminate their lease in 2002 upon
payment of significant cancellation penalties.
(5) 103,656 square feet of this lease of 101 Independence Center expires in
2010. Additionally, the tenant has the right to terminate increments of
space each year beginning in 2005 with 18 months' notice.
(6) See "Major Properties" - "101 Second Street," " 55 Second Street,"
"Cousins/Cerritos I, LLC" (AT&T Wireless Services Headquarters),
"Cousins/Daniel, LLC," "CP Venture Two LLC and CP Venture Three LLC," "Ten
Peachtree Place" and "CP Venture Two LLC" where these ventures'
preferences and/or terms are discussed.
(7) 101 Second Street became partially operational in April 2000. Thus,
economic occupancy does not include a full year of operations.
(8) Project was under construction and/or lease-up as of December 31, 2000. In
certain situations, lease expiration dates are based upon estimated
commencement dates and square footage is estimated.
(9) AT&T Wireless Services Headquarters and Cerritos Corporate Center - Phase
II are located on a total of 9 acres which are subject to a ground lease
expiring in 2034, with an option to renew through 2087.
(10) The Points at Waterview was purchased on December 28, 2000. Therefore,
economic occupancy was not calculated and no depreciation and amortization
was recorded in 2000. Additionally, acreage includes a pad of land upon
which an approximately 60,000 rentable square foot building could be
developed.
(11) 600 University Park Place became partially operational in June 2000. Thus,
economic occupancy does not include a full year of operations.
(12) 1900 Duke Street became partially operational in October 2000. Thus,
economic occupancy does not include a full year of operations.
(13) 555 North Point Center East became partially operational in February 2000.
Thus, economic occupancy does not include a full year of operations.
(14) 44,844 square feet of this lease of 555 North Point Center East expires in
2009, with an option to extend the lease to 2014.
(15) One Georgia Center was purchased on December 1, 2000. Therefore, economic
occupancy was not calculated for 2000. Additionally, acreage includes a
pad of land upon which an approximately 288,000 rentable square foot
building could be developed.
(16) 9,615 square feet of the Profit Recovery Group lease of 2300 Windy Ridge
Parkway expires in 2002 and 1,556 square feet of the Financial Services
Corporation lease of 2300 Windy Ridge Parkway expires in 2001.
(17) Georgia-Pacific Corporation, PaineWebber and Conseco Finance Inc. have the
right to terminate their leases in 2007, 2008 and 2002, respectively, upon
payment of significant cancellation penalties.
(18) Georgia-Pacific Corporation has the option to purchase the building on its
lease expiration date for a price of $33,750,000.
(19) See "Major Properties" - "Wildwood Office Park" where the accounting for
the 3100 Windy Hill Road Building is discussed.
(20) Ernst & Young LLP has a cancellation right on 23,036 square feet of this
lease of Bank of America Plaza in 2003, if notice is received in 2002, and
Paul Hastings has a cancellation right on 12,812 square feet and 20,574
square feet in 2005 and 2006, respectively.
(21) See "Major Properties" - "Bank of America Plaza" where debt on Bank of
America Plaza is discussed.
(22) Gateway Village became partially operational in November 2000. Thus,
economic occupancy does not include a full year of operations.
(23) 1155 Perimeter Center West became partially operational in January 2000.
Thus, economic occupancy does not include a full year of a fully
operational property.
(24) Maturity of the Ten Peachtree Place mortgage debt is extendible to
December 31, 2008. Rate becomes floating after November 30, 2001.
(25) Protective Life has the right to cancel 13,052 square feet of this lease
of Grandview II in 2003.
(26) 100 North Point Center East and 200 North Point Center East were
financed together with one non-recourse mortgage note payable. For
purposes of this schedule the total debt has been allocated 50% to each
building.
(27) Northside/Alpharetta I and II are located on 1 acre and 2 acres subject to
ground leases, which expire in 2058 and 2060, respectively.
(28) 17,444 square feet of this lease of Northside/Alpharetta II expires in
2009.
(29) The Crawford Long Medical Office Building is being developed on top of a
building within the Crawford Long Hospital campus. The Company has
received a fee simple interest in the air rights above this building in
order to develop the medical office building.
(30) Presbyterian Medical Plaza at University is located on 1 acre which is
subject to a ground lease expiring in 2057.
(31) Novant Health, Inc. has the option to renew 23,359 rentable square feet
through 2027 of this lease of Presbyterian Medical Plaza at University,
with the option to renew the balance through 2022.
(32) This anchor tenant owns its own space.
(33) The Avenue of the Peninsula became partially operational in May 2000.
Thus, economic occupancy does not include a full year of operations.
(34) Salem Road Station became partially operational in October 2000. Thus,
economic occupancy does not include a full year of operations.
(35) Mira Misa MarketCenter became partially operational in May 2000. Thus,
economic occupancy does not include a full year of operations.
(36) North Point MarketCenter includes approximately 4 outparcels which are
ground leased to freestanding users.
Land Held for Investment and Future Development (excluding Retail Outparcels)
Developable Company's Adjusted
Land Area Joint Venture Ownership Cost Debt
Description, Location and Zoned Use Year Acquired (Acres)(1) Partner Interest ($ in thousands) Balances
- ----------------------------------- ------------- ----------- ------------- --------- ---------------- --------
Wildwood Office Park
Suburban Atlanta, Georgia
Office and Commercial 1971-1989 130 N/A 100% $ 6,327 $ 0
Office and Commercial 1971-1982 34 IBM 50% $10,061(2) $ 0
North Point Land
(Georgia Highway 400 & Haynes Bridge Road) (3)
Suburban Atlanta, Georgia
Office and Commercial - East 1970-1985 13 N/A 100% $ 917 $ 0
Office and Commercial - West 1970-1985 217 N/A 100% $ 7,678 $ 0
Temco Associates
(Paulding County)
Suburban Atlanta, Georgia 1991 (5) Temple-Inland 50% $13,001(5) $ 0
Inc. (4)
(1) Based upon management's estimates.
(2) For the portion of the Wildwood Office Park land owned by a joint venture,
the cost shown is what the cost would be if the venture's land cost were
adjusted downward to the Company's lower basis in the land it contributed
to the venture. The adjusted cost excludes building predevelopment costs,
net, of $1,079,000.
(3) The North Point property is located both east and west of Georgia Highway
400. Development had been mainly concentrated on the land located east of
Georgia Highway 400, until July 1998 when the Company commenced
construction of the first building, AtheroGenics, on the west side. The
land located east of Georgia Highway 400 surrounds North Point Mall, a 1.3
million square foot regional mall on a 100 acre site which the Company sold
in 1988.
(4) Joint venture partner is an affiliate of the entity shown.
(5) Temco Associates has an option through March 2006, with no carrying costs,
to acquire the fee simple interest in approximately 9,600 acres in Paulding
County, Georgia (northwest of Atlanta, Georgia). The partnership also has
an option to acquire interests in a timber rights only lease covering
approximately 22,000 acres. This option also expires in March 2006, with
the underlying lease expiring in 2025. The options may be exercised in
whole or in part over the option period and the option price on the fee
simple land is $985 per acre on January 1, 2001, escalating at 6% on
January 1 of each succeeding year during the term of the option. During
2000, 1999 and 1998, approximately 734, 640 and 328 acres, respectively, of
the option related to the fee simple interest was exercised. In 2000,
approximately 461 acres were simultaneously sold for gross profits of
$1,546,000 and approximately 264 acres were acquired for the development of
the Bentwater residential community. Approximately 1,735 lots will be
developed within Bentwater on an approximate total of 1,290 acres, the
remainder of which will be acquired as needed through exercises of the
option related to the fee simple interest. The remaining 9 acres were being
held for sale or future development. In 1999, approximately 466 acres were
simultaneously sold for gross profits of $2,458,000 and approximately 174
acres were acquired for development of Bentwater. In 1998, approximately 83
acres were simultaneously sold for gross profits of approximately $192,000.
The Cobb County YMCA had a three year option to purchase approximately 38
acres out of the total acres of the options exercised in 1998, which they
exercised in December 1999. The remaining 207 acres were deeded in early
1999 to a golf course developer who developed the golf course within
Bentwater. Temco Associates sold 219 and 106 lots within Bentwater in 2000
and 1999, respectively.
Major Properties
- ----------------
General
- -------
This section describes the major operating properties in which the
Company has an interest either directly or indirectly through joint venture
arrangements. A "negative investment" in a joint venture results from
distributions of capital to the Company, if any, exceeding the sum of (i) the
Company's contributions of capital and (ii) reported earnings (losses) of the
joint venture allocated to the Company. "Investment" in a joint venture means
the book value of the Company's investment in the joint venture.
Wildwood Office Park
- --------------------
Wildwood Office Park is a 285 acre Class A commercial development in
Atlanta, Georgia, master planned by I.M. Pei, which includes 8 office buildings
containing 2,441,000 rentable square feet. The property is zoned for office,
institutional, commercial and residential use. Approximately 105 acres in the
park are owned by, or committed to be contributed to, Wildwood Associates (see
below), including approximately 34 acres of land held for future development.
The Company owns 100% of the 130 acre balance of the land available for future
development.
Located in Atlanta's northwest commercial district, just north of the
Interstate 285/Interstate 75 intersection, Wildwood features convenient access
to all of Atlanta's major office, commercial and residential districts. The
Wildwood complex overlooks the Chattahoochee River and borders 1,200 acres of
national forest, thus providing an urban office facility in a forest setting.
Wildwood Associates. Wildwood Associates is a joint venture formed in
1985 between the Company and IBM. The Company and IBM each have a 50% interest
in Wildwood Associates. At December 31, 2000, the Company's investment in
Wildwood Associates and a related partnership, which included the cost of the
land the Company is committed to contribute to Wildwood Associates, was a
negative investment of approximately $39,081,000.
Wildwood Associates owns the 3200 Windy Hill Road Building (687,000
rentable square feet), the 2300 Windy Ridge Parkway Building (635,000 rentable
square feet), the 2500 Windy Ridge Parkway Building (314,000 rentable square
feet), the 4100 and 4300 Wildwood Parkway Buildings (250,000 rentable square
feet in total) and the 4200 Wildwood Parkway Building (260,000 rentable square
feet). As of March 15, 2001, these buildings were all 100% leased. Wildwood
Associates also owns 14 acres leased to two banking facilities and five
restaurants.
Other Buildings in Wildwood Office Park. Wildwood Office Park also
contains the 3301 Windy Ridge Parkway Building, a 107,000 rentable square foot
office building located on approximately 10 acres which is wholly owned by the
Company. The 3301 Windy Ridge Parkway Building was 100% leased as of March 15,
2001.
In addition, the 3100 Windy Hill Road Building, a 188,000 rentable
square foot corporate training facility occupies a 13-acre parcel of land which
is wholly owned by the Company. The training facility improvements were sold in
1983 to a limited partnership of private investors, at which time the Company
received a leasehold mortgage note. The training facility land was
simultaneously leased to the partnership for thirty years, along with certain
equipment for varying periods. The training facility had been leased by the
partnership to IBM through November 30, 1998.
Effective January 1, 1997, the IBM lease was extended eight years
beyond its previous expiration, to November 30, 2006. Based on the economics of
the lease, the Company will receive substantially all of the economic risks and
rewards from the property through the term of the IBM lease. In addition, the
Company will receive substantially all of the future economic risks and rewards
from the property beyond the IBM lease because of the short term remaining on
the land lease (7 years) and the large mortgage note balance ($25.9 million)
that would have to be paid off, with interest, in that 7 year period before the
limited partnership would receive any significant benefit. Therefore, effective
January 1, 1997, the $17,005,000 balance of the mortgage note and land was
reclassified to Operating Properties, and revenues and expenses (including
depreciation) from that point forward have been recorded as if the building were
owned by the Company.
North Point
- -----------
North Point is a mixed-use commercial development located in north
central suburban Atlanta, Georgia, off of Georgia Highway 400, a six lane state
highway that runs from downtown Atlanta to the northern Atlanta suburbs. The
Company owns either directly or through a venture arrangement approximately 134
and 221 acres located on the east and west sides of Georgia Highway 400,
respectively. Development had been mainly concentrated on the land located east
of Georgia Highway 400 until July 1998 when the Company commenced construction
of the first building, AtheroGenics, on the west side. Planning and
infrastructure work has also begun for additional development on the west side
property. The east side land surrounds North Point Mall, a 1.3 million square
foot regional mall on a 100-acre site which the Company sold in 1988. The
following describes the various components of North Point.
North Point MarketCenter and Mansell Crossing Phase II. North Point
MarketCenter, which is 100% leased as of March 15, 2001, is a 517,000 square
foot retail power center (of which 401,000 square feet are owned in a venture)
located adjacent to North Point Mall. Mansell Crossing Phase II, which was 91%
leased as of March 15, 2001, is an approximately 103,000 square foot expansion
of an existing retail power center, previously developed by the Company for a
third party. These two centers are located on 49 and 13 acres of land,
respectively, at North Point. Both of these properties were contributed to the
Prudential venture in November 1998 (see Note 5).
North Point Center East. The Company owns either directly or indirectly
through a venture arrangement four Class A office buildings located adjacent to
North Point Mall and the retail properties discussed above. 100 North Point
Center East, 200 North Point Center East, 333 North Point Center East and 555
North Point Center East which were completed in 1995, 1996, 1998 and 2000,
respectively, are 128,000, 130,000, 129,000 and 152,000 rentable square feet,
respectively. 555 North Point Center East became partially operational for
financial reporting purposes in February 2000. These four office buildings are
located on 35 acres of land at North Point. 100 and 200 North Point Center East
were contributed to the Prudential venture in November 1998 (see Note 5). 100,
200 and 555 North Point Center East were all 95% leased as of March 15, 2001 and
333 North Point Center East was 100% leased as of March 15, 2001.
AtheroGenics. The Company owns directly AtheroGenics, an approximately
50,000 rentable square foot office and laboratory building located on a 4-acre
site on the west side of Georgia Highway 400. AtheroGenics is 100% leased as of
March 15, 2001.
Other North Point Property. Approximately 24 acres of the North Point
land are ground leased in 1 to 5 acre sites to freestanding users. These 24
acres were 100% leased as of March 15, 2001.
The remaining approximately 230 developable acres at North Point are
100% owned by the Company. Approximately 13 acres of this land are located on
the east side of Georgia Highway 400 and are zoned for office use. Approximately
217 acres of the land are located on the west side of Georgia Highway 400 and
are zoned for office, institutional and light industrial use.
Other Operational Office Properties
- -----------------------------------
Bank of America Plaza. Bank of America Plaza is a Class A, 55-story,
approximately 1.3 million rentable square foot office tower designed by Kevin
Roche and is located on approximately 4 acres of land between the midtown and
downtown districts of Atlanta, Georgia. The building, which was completed in
1992, was 100% leased as of March 15, 2001. An affiliate of Bank of America
leases approximately 46% of the rentable square feet. Bank of America Plaza was
developed by CSC Associates, L.P. ("CSC"), a joint venture formed by the Company
and a wholly owned subsidiary of Bank of America, each as 50% partners.
CSC's net income or loss and cash distributions are allocated to the
partners based on their percentage interests (50% each). At December 31, 2000,
the Company's investment in CSC was approximately $90,959,000.
Cousins LORET Venture, L.L.C.("Cousins LORET"). Effective July 31,
1997, Cousins LORET was formed between the Company and LORET Holdings, L.L.L.P.
("LORET"), each as 50% members. LORET contributed Two Live Oak Center, a 278,000
rentable square foot office building located in Atlanta, Georgia, which was
renovated in 1997, and was 100% leased as of March 15, 2001. Two Live Oak Center
was contributed subject to a 7.90% $30 million non-recourse ten year mortgage
note payable. LORET also contributed an adjacent 4-acre site on which
construction of The Pinnacle, a 423,000 rentable square foot Class A office
building, commenced in August 1997 and was completed in November 1998. The
Pinnacle became partially operational for financial reporting purposes in March
1999 and as of March 15, 2001 was 98% leased. In May 1998, Cousins LORET
completed the $70 million non-recourse financing of The Pinnacle at an interest
rate of 7.11% and a term of twelve years. This financing was completely funded
on December 30, 1998. The Company contributed $25 million of cash to Cousins
LORET to match the value of LORET's agreed-upon equity. At December 31, 2000,
the Company had an investment in Cousins LORET of approximately $12,932,000.
Ten Peachtree Place. Ten Peachtree Place is a 20-story, 259,000
rentable square foot Class A office building located in midtown Atlanta,
Georgia. Completed in 1991, this structure was designed by Michael Graves and is
currently 100% leased to Coca-Cola. Approximately four acres of adjacent land,
currently used for surface parking, are available for future development.
Ten Peachtree Place is owned by Ten Peachtree Place Associates, a
general partnership between the Company (50%) and a wholly owned subsidiary of
Coca-Cola (50%). The partnership acquired the property in 1991 for a nominal
cash investment, subject to a ten-year purchase money note. This 8% purchase
money note had an outstanding balance of $16,393,000 at December 31, 2000. If
the purchase money note is paid in accordance with its terms, it will amortize
to approximately $15.3 million ($59 per rentable square foot) over the ten-year
term of the Coca-Cola lease, at which time Coca-Cola is entitled to receive the
preferred return described below, and the property may be sold, released, or
returned to the lender under the purchase money note for $1.00 without penalty
or any further liability to the Company for the indebtedness. At December 31,
2000, the Company had an investment in Ten Peachtree Place Associates of
approximately $255,000.
The Company anticipates that Ten Peachtree Place Associates will
generate approximately $400,000 per year of cash flows from operating activities
net of note principal amortization during the ten-year lease. The partnership
agreement generally provides that each of the partners is entitled to receive
50% of cash flows from operating activities net of note principal amortization
(excluding any sale proceeds) for ten years, after which time the Company is
entitled to 15% of cash flows (including any sale proceeds) and its partner is
entitled to receive 85% of cash flows (including any sale proceeds), until the
two partners have received a combined distribution of $15.3 million, after which
time each partner is entitled to receive 50% of cash flows (including any sale
proceeds).
CC-JM II Associates. This joint venture was formed in 1994 between the
Company and an affiliate of CarrAmerica Realty Corporation, each as 50% general
partners, to develop and own John Marshall-II, a 224,000 square foot Class A
office building in suburban Washington, D.C. The building is 100% leased until
2011 to Booz-Allen & Hamilton, an international consulting firm, as a part of
its corporate headquarters campus. At December 31, 2000, the Company had an
investment in CC-JM II Associates of approximately $2,129,000.
Cousins/Daniel, LLC. Cousins/Daniel, LLC ("Cousins/Daniel") was formed
in 1997 between Cousins, Inc. (a wholly owned subsidiary of Cousins) and Daniel
Realty Company ("Daniel"). The purpose of this venture is to develop certain
projects proposed by Daniel and selected by the Company. Daniel's economic
rights are limited to development fees, leasing fees, management fees and
certain incentive interests. These incentive interests include a residual
interest in the cash flow and a residual interest in capital proceeds. All
projects undertaken within the venture are pooled for purposes of calculating
the aforementioned residuals. This venture is treated as a consolidated entity
in the Company's financial statements.
In June 1998, Cousins/Daniel acquired Lakeshore Park Plaza, an
approximately 190,000 rentable square foot office building and also purchased
the land for and commenced construction of, 600 University Park Place, an
approximately 123,000 rentable square foot Class A office building which became
partially operational for financial reporting purposes in June 2000. Both of
these office buildings are located in Birmingham, Alabama, and are 89% and 91%
leased, respectively, as of March 15, 2001.
Cousins/Cerritos I, LLC. On November 18, 1998, the Company entered into
Commonwealth/Cousins I, LLC (the "Venture") with CommonWealth for the purposes
of developing AT&T Wireless Services Headquarters, a 222,000 rentable square
foot Class A office building in suburban Los Angeles, California, which was 100%
leased as of March 15, 2001.
CommonWealth transferred all rights in the project and in exchange
received an initial credit to its capital account of $4,980,039, which is equal
to a 49.9% interest in the Venture. The Company contributed $5,000,000 as its
capital contribution for a 50.1% interest in the Venture. The Venture is treated
as a consolidated entity in the Company's financial statements. The Venture
entered into a put and call agreement which CommonWealth exercised in January
2001 to sell its entire interest for approximately $7.5 million. Upon completion
of the buyout, the Venture's name was changed to Cousins/Cerritos I, LLC, which
is 100% owned by the Company.
CP Venture Two LLC. On November 12, 1998, the Company entered into a
venture agreement with Prudential. On such date the Company contributed its
interest in nine properties to the venture and Prudential contributed cash (see
Note 5). The nine properties contributed included four office properties, 100
and 200 North Point Center East as discussed above, First Union Tower and
Grandview II and one medical office property, Presbyterian Medical Plaza at
University. First Union Tower is a Class A office building containing
approximately 322,000 rentable square feet, located on one acre of land in
downtown Greensboro, North Carolina. First Union Tower was 90% leased as of
March 15, 2001. Grandview II is an approximately 149,000 rentable square foot
Class A office building in Birmingham, Alabama, which was owned by
Cousins/Daniel, LLC prior to being contributed. Grandview II was approximately
100% leased as of March 15, 2001. Presbytrian Medical Plaza at University, an
approximately 69,000 rentable square foot medical office building in Charlotte,
North Carolina, was approximately 100% leased as of March 15, 2001. See the
Other Retail Properties section where retail properties contributed to the
Prudential venture are discussed. In December 2000, CP Venture Three LLC
acquired One Georgia Center, an approximately 363,000 rentable square foot
office building in midtown Atlanta, Georgia. The purchase price of the building
was approximately $35.8 million.
101 Second Street. Cousins/Myers Second Street Partners, L.L.C., a
venture formed in 1997 between the Company and Myers Second Street Company LLC
("Myers"), purchased approximately 1 acre of undeveloped land in downtown San
Francisco, California upon which 101 Second Street, an approximately 387,000
rentable square foot Class A office building was developed. 101 Second Street
was 92% leased as of March 15, 2001. Myers' economic rights are limited to
development fees and certain incentive interests, which include a residual
interest in the cash flow and capital proceeds. This venture is treated as a
consolidated entity in the Company's financial statements.
333 John Carlyle. In January 1998, the Company purchased the land for
and commenced construction of 333 John Carlyle, an approximately 153,000
rentable square foot Class A office building in suburban Washington, D.C. 333
John Carlyle became partially operational for financial reporting purposes in
May 1999 and was 93% leased as of March 15, 2001.
1900 Duke Street. In January 1999, the Company purchased the land for
and commenced construction of 1900 Duke Street, an approximately 97,000 rentable
square foot Class A office building in suburban Washington, D.C. which is 97%
leased as of March 15, 2001.
Inforum. In June 1999, the Company acquired Inforum, a 988,000 rentable
square foot office building in downtown Atlanta, Georgia, for $71 million by
completing a tax-deferred exchange with the proceeds ($69 million) from the sale
of the Company's 50% interest in Haywood Mall. Inforum was 99% leased as of
March 15, 2001.
101 Independence Center. In December 1996, the Company acquired 101
Independence Center, a 526,000 rentable square foot Class A office building
(including an underground parking garage and an adjacent parking deck) located
at the intersection of Trade and Tryon Streets in the central business district
of Charlotte, North Carolina. 101 Independence Center was 99% leased as of March
15, 2001.
615 Peachtree Street. In August 1996, the Company acquired 615
Peachtree Street, a 149,000 rentable square foot 12-story downtown Atlanta
office building, located across from Bank of America Plaza. 615 Peachtree Street
was 95% leased as of March 15, 2001.
The Points at Waterview. In December 2000, the Company purchased The
Points at Waterview, an approximately 200,000 rentable square foot office
building in suburban Dallas, Texas. The purchase price was approximately $25.4
million which includes an adjacent parcel of land on which a second building of
approximately 60,000 rentable square feet can be developed.
One Ninety One Peachtree Tower. One Ninety One Peachtree Tower is a
50-story, Class A office tower located in downtown Atlanta, Georgia that was
completed in December 1990. One Ninety One Peachtree Tower, which contains 1.2
million rentable square feet, was designed by John Burgee Architects, with
Phillip Johnson as design consultant.
One Ninety One Peachtree Tower was developed on approximately 2 acres
of land, of which approximately 1.5 acres is owned and approximately one-half
acre under the parking facility is leased for a 99-year term expiring in 2087
with a 99-year renewal option. One Ninety One Peachtree Tower was approximately
97% leased at March 15, 2001.
C-H Associates, Ltd. ("C-H Associates"), a partnership formed in 1988
between CREC (49%), Hines Peachtree Associates Limited Partnership (49%) and
Peachtree Palace Hotel, Ltd. (2%), owns a 20% interest in the partnership that
owns One Ninety One Peachtree Tower. C-H Associates' 20% ownership of One Ninety
One Peachtree Tower results in an effective 9.8% ownership interest by CREC,
subject to a preference in favor of the majority partner, in the One Ninety One
Peachtree Tower project. The balance of the One Ninety One Peachtree Tower
project was owned by DIHC Peachtree Associates, which was an affiliate of Dutch
Institutional Holding Company, but was acquired by Cornerstone Properties, Inc.
in October 1997. In June 2000, Equity Office Properties Trust acquired
Cornerstone Properties, Inc.
Through C-H Associates, CREC received 50% of the development fees from
the One Ninety One Peachtree Tower project. In addition, CREC owns a 50%
interest in two general partnerships which receive fees from leasing and
managing the One Ninety One Peachtree Tower project.
The One Ninety One Peachtree Tower project was funded substantially by
debt until March 1993, at which time the predecessor owner contributed equity in
the amount of $145,000,000 which repaid approximately one-half of the debt.
Subsequent to the equity contribution, C-H Associates had been entitled to a
priority distribution of $250,000 per year (of which CREC was entitled to
receive $112,500) for seven years beginning in 1993 and ending in 2000. The
equity contributed is entitled to a preferred return at a rate increasing over
the first 14 years from 5.5% to 11.5% (payable after CREC's priority return); at
December 31, 2000, the cumulative undistributed preferred return was
$13,485,701. After the owner, currently Equity Office Properties Trust, recovers
its preferred return, the partners share in any operating cash flow
distributions in accordance with their percentage interests. The project is
subject to long-term debt of approximately $142,350,000 at December 31, 2000. At
December 31, 2000, the Company had a negative investment of approximately
$91,000 in the One Ninety One Peachtree Tower project.
Operational Medical Office Properties
- -------------------------------------
Medical Office Properties. In June 1998, the Company acquired
Northside/Alpharetta I, an approximately 106,000 rentable square foot medical
office building in suburban Atlanta, Georgia. Northside/Alpharetta I was 100%
leased as of March 15, 2001. Northside/Alpharetta II, an approximately 198,000
rentable square foot medical office building in suburban Atlanta, Georgia was
73% leased as of March 15, 2001. Additionally, Meridian Mark Plaza, an
approximately 159,000 rentable square foot medical office building in Atlanta,
Georgia, was 100% leased at March 15, 2001.
Office Properties Under Development
- -----------------------------------
55 Second Street. In November 1999, the Company formed Cousins/Myers
II, LLC, a venture with Myers Bay Area Company LLC ("Myers Bay"), which
purchased approximately 1 acre of fully entitled undeveloped land in downtown
San Francisco, California and began development of 55 Second Street, an
approximately 375,000 rentable square foot Class A office building which was 87%
leased as of March 15, 2001. Myers Bay's economic rights are limited to
development fees and certain incentive interests, which include a residual
interest in the cash flow and capital proceeds. The venture is treated as a
consolidated entity in the Company's financial statements.
Charlotte Gateway Village, LLC ("Gateway"). On December 14, 1998, the
Company and a wholly owned subsidiary of Bank of America Corporation formed
Gateway for the purpose of developing and owning Gateway Village, a 1.1 million
rentable square foot Class A office building complex in downtown Charlotte,
North Carolina. Construction of Gateway Village commenced in July 1998. The
project, which is 100% leased to Bank of America Corporation with a term of 15
years, became partially operational for financial reporting purposes in November
2000. In December 1998, Gateway completed construction financing of up to $190
million for Gateway Village. The note bears an interest rate of LIBOR (adjusted
for certain reserve requirements) plus .50% and matures January 2, 2002. No
amounts were drawn on the note until 1999. This note is fully exculpated and is
supported by a lease to Bank of America Corporation with a term of 15 years.
Pursuant to the Gateway operating agreement, this construction financing will be
replaced with permanent long-term financing which will be fully amortized at the
end of the Bank of America Corporation lease. At December 31, 2000, the Company
had an investment in Gateway of approximately $21,489,000.
Gateway's net income or loss and cash distributions are allocated to
the members as follows: first to the Company so that it receives a cumulative
compounded return equal to 11.46% on its capital contributions, second to a
wholly owned subsidiary of Bank of America Corporation until it has received an
amount equal to the aggregate amount distributed to the Company and then 50% to
each member.
285 Venture, LLC. In March 1999, the Company and a commingled trust
fund advised by J.P. Morgan Investment Management Inc. (the "J.P. Morgan Fund")
formed 285 Venture, LLC, each as 50% partners, for the purpose of developing
1155 Perimeter Center West, an approximately 362,000 rentable square foot Class
A office building complex in Atlanta, Georgia. 1155 Perimeter Center West became
partially operational for financial reporting purposes in January 2000 and was
100% leased as of March 15, 2001. The J.P. Morgan Fund contributed the
approximately 6-acre site upon which 1155 Perimeter Center West was developed.
The land had an agreed-upon value of approximately $5.4 million which the
Company matched with a cash contribution. At December 31, 2000, the Company's
investment in 285 Venture, LLC was approximately $30,693,000.
CPI/FSP I, L.P. In May 2000, CPI/FSP I, L.P., a 50% limited
partnership, was formed. 50% of the venture is owned by the Company through a
general partnership, Cousins Austin GP, Inc. (1%), and a limited partnership,
Cousins Austin, Inc. (49%). The remaining 50% is owned by a general partnership,
Fifth Street Properties - Austin, LLC (1%), and a limited partnership, Fifth
Street Properties - Austin Investor, LLC (49%), which are both owned by
CommonWealth Pacific LLC and CalPERS. CPI/FSP I, L.P. is currently developing
Austin Research Park - Buildings III and IV, two approximately 174,000 and
184,000 rentable square foot office buildings, respectively, in Austin, Texas,
which are both 100% leased as of March 15, 2001. Additionally, the venture owns
an adjacent pad for future development of an approximately 184,000 rentable
square foot office building.
Cerritos Corporate Center - Phase II. In June 2000, the Company
commenced construction of Cerritos Corporate Center - Phase II, an approximately
104,000 rentable square foot office building in suburban Los Angeles,
California, adjacent to the Company's AT&T Wireless Services Headquarters office
building, which was 100% leased to AT&T Wireless Services as of March 15, 2001.
Medical Office Properties Under Development
-------------------------------------------
Crawford Long - CPI, LLC. In October 1999, the Company formed Crawford
Long - CPI, LLC with Emory University, each as 50% partners, for the purpose of
developing and owning the Crawford Long Medical Office Building, an
approximately 366,000 rentable square foot medical office building located in
midtown Atlanta, Georgia. The building is currently under development and was
49% leased as of March 15, 2001.
Other Retail Properties
- -----------------------
Operational Retail Properties. The Company owns six retail centers
which were fully operational for financial reporting purposes as of December 31,
2000. Perimeter Expo is a 291,000 square foot retail power center (of which the
Company owns 176,000 square feet) in Atlanta, Georgia which was 100% leased
(Company owned) as of March 15, 2001. Presidential MarketCenter is a 490,000
square foot retail power center (of which the Company owns 374,000 square feet)
in suburban Atlanta, Georgia which was 97% leased (Company owned) as of March
15, 2001. The Avenue East Cobb is a 225,000 square foot open-air retail
specialty center in suburban Atlanta, Georgia which was 100% leased as of March
15, 2001. The Avenue of the Peninsula is a 369,000 square foot open-air retail
specialty center in Rolling Hills Estates, California, in the greater Los
Angeles metropolitan area which was 83% leased as of March 15, 2001. The Avenue
of the Peninsula became partially operational for financial reporting purposes
in May 2000. Salem Road Station, an approximately 67,000 square foot
neighborhood retail center in suburban Atlanta, Georgia, became partially
operational for financial reporting purposes in October 2000 and was 81% leased
as of March 15, 2001. The Company also owned Colonial Plaza MarketCenter, which
was fully operational as of December 31, 2000, but was subsequently sold (see
"Retail Properties Sold" below).
CP Venture Two LLC and CP Venture Three LLC. In November 1998, the
Company contributed both Greenbrier MarketCenter and Los Altos MarketCenter in
addition to North Point MarketCenter and Mansell Crossing II (see North Point
discussion) to the aforementioned Prudential venture (see Note 5). Greenbrier
MarketCenter is a 493,000 square foot retail power center which is located in
Chesapeake, Virginia and was 99% leased as of March 15, 2001. Los Altos
MarketCenter is a 258,000 square foot retail power center (of which the
Prudential venture owns 157,000 square feet) which is located in Long Beach,
California and was 100% leased as of March 15, 2001.
Mira Mesa MarketCenter, an approximately 447,000 square foot retail
power center in suburban San Diego, California, became partially operational for
financial reporting purposes in April 2000 and was 100% leased as of March 15,
2001. Mira Mesa MarketCenter is owned by CP Venture Three LLC (see Note 5).
The Avenue Peachtree City, a 167,000 square foot open-air retail
specialty center in suburban Atlanta, Georgia owned by CP Venture Three LLC (see
Note 5), is currently under development and was 56% leased as of March 15, 2001.
Brad Cous Golf Venture, Ltd. Effective January 31, 1998, the Company
formed the Brad Cous Golf Venture, Ltd. with the W.C. Bradley Co., each as
50% partners, for the purpose of developing and owning The Shops at World Golf
Village, an approximately 80,000 square foot retail center located adjacent to
the PGA Hall of Fame in St. Augustine, Florida. The Shops at World Golf Village
became partially operational for financial reporting purposes in April 1999 and
was 78% leased as of March 15, 2001. At December 31, 2000, the Company had an
investment in Brad Cous Golf Venture, Ltd. of approximately $5,608,000.
Retail Properties Sold. On March 28, 2000, the Company sold Laguna
Niguel Promenade, an approximately 154,000 square foot retail center in Laguna
Niguel, California for $26.7 million, which was approximately $6.4 million over
the cost of the center. Including depreciation recapture of approximately $.8
million, the net gain on the sale was approximately $7.2 million. The net
proceeds from the sale were placed in escrow pending a tax-deferred exchange to
be identified by the Company.
On February 21, 2001, the Company sold Colonial Plaza MarketCenter, an
approximately 480,000 square foot retail center in Orlando, Florida for $54
million, which was approximately $10.8 million over the cost of the center.
Including depreciation recapture of approximately $6.2 million, the net gain on
the sale was approximately $17 million.
Residential Lots Under Development
- ----------------------------------
As of December 31, 2000, CREC and Temco Associates owned the following
parcels of land which are being developed into residential communities ($ in
thousands):
Estimated
Total Lots
Initial on Land
Year Currently Lots Remaining Carrying
Description Acquired Owned (1) Sold to Date Lots Value
----------- -------- --------- ------------ --------- --------
CREC
----
Brown's Farm
West Cobb County
Suburban Atlanta, GA 1993 213 213 0 $ 0
Apalachee River Club
Gwinnett County
Suburban Atlanta, GA 1994 186 186 0 0
Echo Mill
West Cobb County
Suburban Atlanta, GA 1994 541 441 100 784
Barrett Downs
Forsyth County
Suburban Atlanta, GA 1994 144 144 0 0
Bradshaw Farm
Cherokee County
Suburban Atlanta, GA 1994 533 533 0 0
Alcovy Woods
Gwinnett County
Suburban Atlanta, GA 1996 162 115 47 1,305
River's Call
East Cobb County
Suburban Atlanta, GA 1971-1989 100 8 92 912
----- ----- ----- -------
Total 1,879 1,640 239 $ 3,001
===== ===== ===== =======
Temco Associates
----------------
Bentwater
Paulding County
Suburban Atlanta, GA 1998 1,735(2) 325 1,410 $13,001
======== ===== ===== =======
(1) Includes lots sold to date.
(2) See discussion of Temco Associates below.
Land Held for Investment and Future Development
- -----------------------------------------------
In addition to the various land parcels located adjacent to operating
properties or projects under construction discussed above, the Company owns or
controls the following significant land holdings either directly or indirectly
through venture arrangements. The Company intends to convert these land holdings
to income-producing usage or to sell portions of land holdings as opportunities
arise over time.
Temco Associates. Temco Associates was formed in March 1991 as a
partnership between CREC (50%) and a subsidiary of Temple-Inland Inc. (50%).
Temco Associates has an option through March 2006, with no carrying costs, to
acquire the fee simple interest in approximately 9,600 acres in Paulding County,
Georgia (northwest of Atlanta, Georgia). The partnership also has an option to
acquire interests in a timber rights only lease covering approximately 22,000
acres. This option also expires in March 2006, with the underlying lease
expiring in 2025. The options may be exercised in whole or in part over the
option period and the option price on the fee simple land is $985 per acre on
January 1, 2001, escalating at 6% on January 1 of each succeeding year during
the term of the option. During 2000, 1999 and 1998, approximately 734, 640 and
328 acres, respectively, of the option related to the fee simple interest was
exercised. In 2000, approximately 461 acres were simultaneously sold for gross
profits of $1,546,000 and approximately 264 acres were acquired for the
development of the Bentwater residential community. Approximately 1,735 lots
will be developed within Bentwater on an approximate total of 1,290 acres, the
remainder of which will be acquired as needed through exercises of the option
related to the fee simple interest. The remaining 9 acres were being held for
sale or future development. In 1999, approximately 466 acres were simultaneously
sold for gross profits of $2,458,000 and approximately 174 acres were acquired
for development of Bentwater. In 1998, approximately 83 acres were
simultaneously sold for gross profits of approximately $192,000. The Cobb County
YMCA had a three year option to purchase approximately 38 acres out of the total
acres of the options exercised in 1998, which they exercised in December 1999.
The remaining 207 acres were deeded in early 1999 to a golf course developer who
developed the golf course within Bentwater. Temco Associates sold 219 and 106
lots within Bentwater in 2000 and 1999, respectively.
Other Investments
- -----------------
Air Rights Near the CNN Center. The Company owns a leasehold interest
in the air rights over the approximately 365,000 square foot CNN Center parking
facility in Atlanta, Georgia, adjoining the headquarters of Turner Broadcasting
System, Inc. and Cable News Network. The air rights are developable for
additional parking or office use. The Company's net carrying value of this
interest is $0.
Cousins Stone LP. Cousins Stone LP was formed on June 1, 1999 when CREC
II's subsidiaries acquired Faison's 50% interest in Faison-Stone. CREC II's
subsidiaries acquired an additional 25% interest in July 2000. Cousins Stone LP
is a full-service real estate company headquartered in Dallas, Texas that
specializes in third party property management, development and leasing of Class
A office properties. At December 31, 2000, the Company had an investment in
Cousins Stone LP of approximately $11,093,000. Effective February 28, 2001, CREC
II's subsidiaries acquired the remaining 25% interest in Cousins Stone LP.
Warrants to Purchase Stock in Other Companies
- ---------------------------------------------
Cypress Communications, Inc. In December 1999, the Company executed an
Amended and Restated Master Communications License Transaction Agreement (the
"Master Agreement") with Cypress Communications, Inc. ("Cypress") that provides
for Cypress and the owner of each building subject to the Master Agreement to
enter into a Communications License Agreement (an "Agreement") pursuant to which
Cypress will have the non-exclusive right to access the risers and certain areas
of certain of the Company's and its joint ventures' office and medical office
buildings. Each Agreement allows Cypress to install equipment and wiring, at
Cypress' sole cost and expense, and to offer a variety of telecommunication
services to tenants of each of the applicable buildings. Each Agreement has a
term of 5 years with an automatic renewal for another 5 years unless Cypress
elects not to renew or Cypress fails to equip the applicable building with a
server within 18 months of the execution of the Agreement.
Pursuant to each Agreement, the Company receives a percentage of the
revenue earned by Cypress from tenants and third parties who use the
telecommunication services. In addition, the Company entered into a Stock
Warrant Agreement with Cypress under which Cypress issued 248,441 warrants to
the Company, each warrant entitling the owner to purchase one share of Cypress'
common stock at an exercise price of $4.22 per share. On February 10, 2000,
Cypress completed its initial public offering of 10 million shares of common
stock. The warrants have not been exercised, and the underlying common stock has
not been registered under the Securities Act of 1933 and is not required to be
registered until 18 months after completion of the initial public offering.
Effective February 10, 2000 (the date Cypress completed its initial
public offering), the value of the warrants were recorded in both Other Assets
and Deferred Income in the Company's Consolidated Balance Sheets. The value of
the warrants of $566,000 was determined based on the difference between
management's estimate of the fair market value of the warrants less the exercise
price times the number of warrants granted. The Company early adopted SFAS No.
133 effective October 1, 2000 (see Note 1). Warrants are considered derivatives
under this statement and, therefore, the warrants were marked-to-market which
resulted in a reduction of net income of approximately $566,000 which was
recorded as a cumulative effect of change in accounting principle in the
Company's Consolidated Statements of Income.
AtheroGenics, Inc. In July 1998, the Company received 50,000 warrants
at an exercise price of $5.00 per share for the purchase of Series C Convertible
Preferred Stock of AtheroGenics, Inc, the tenant which leases 100% of
AtheroGenics and who completed an initial public offering on August 8, 2000. As
the share price at December 31, 2000 equaled the warrant price, no adjustment
was necessary pursuant to SFAS No. 133.
Supplemental Financial and Leasing Information
- ----------------------------------------------
Depreciation and amortization expense, net of minority interest's
share, include the following components for the years ended December 31, 2000
and 1999 ($ in thousands):
2000 1999
Share of Share of
Unconsolidated Unconsolidated
Consolidated Joint Ventures Total Consolidated Joint Ventures Total
------------ -------------- ----- ------------ -------------- -----
Furniture, fixtures and
equipment $ 799 $ 230 $ 1,029 $ 640 $ 101 $ 741
Deferred financing costs -- 1 1 -- 17 17
Goodwill and related business
acquisition costs 300 -- 300 300 19 319
Building (including tenant
first generation) 29,135 14,829 43,964 6,476 11,229 17,705
Tenant second generation 1,284 717 2,001 9,108 8,847 17,955
------- ------- ------- ------- ------- -------
$31,518 $15,777 $47,295 $16,524 $20,213 $36,737
======= ======= ======= ======= ======= =======
Exclusive of new developments and purchases of furniture, fixtures and
equipment, the Company had the following capital expenditures for the years
ended December 31, 2000 and 1999, including its share of unconsolidated joint
ventures ($ in thousands):
2000 1999
Office Retail Total Office Retail Total
------ ------ ----- ------ ------ -----
Second generation related costs $3,239 $637 $3,876 $1,224 $208 $1,432
Building improvements 907 27 934 220 -- 220
------ ---- ------ ------ ---- ------
Total $4,146 $664 $4,810 $1,444 $208 $1,652
====== ==== ====== ====== ==== ======
Item 3. Legal Proceedings
- ---------------------------
No material legal proceedings are presently pending by or against the
Company.
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
(a) The Company held a Special Meeting of Shareholders on December 28,
2000.
(b) Not applicable.
(c) The following proposal was adopted by the Shareholders of the
Company. A total of 31,329,373 votes were cast for the proposal,
5,549,230 votes were cast against the proposal and 117,766 votes
were abstained:
(i) The 1999 Incentive Stock Plan (the "Plan") was amended so as
to increase the number of shares of common stock available
under the Plan by 1.2 million shares.
Item X. Executive Officers of the Registrant
- ----------------------------------------------
The Executive Officers of the Registrant as of the date hereof are as
follows:
Name Age Office Held
---- --- -----------
Thomas G. Cousins 69 Chairman of the Board of Directors
and Chief Executive Officer
R. Dary Stone 47 President and Chief Operating Officer
Tom G. Charlesworth 51 Executive Vice President and Chief
Investment Officer
Kelly H. Barrett 36 Senior Vice President and Chief
Financial Officer
George J. Berry 63 Senior Vice President
Craig B. Jones 50 Senior Vice President and President
of the Office Division
John S. McColl 38 Senior Vice President - Office
Division
Joel T. Murphy 42 Senior Vice President and President
of the Retail Division
John L. Murphy 55 Senior Vice President - Office
Division
W. James Overton 54 Senior Vice President - Office
Division
Family Relationships:
- ---------------------
Lillian C. Giornelli, Mr. Cousins' daughter, is a director of the
Company. There are no other family relationships among the current Executive
Officers or Directors. Hugh L. McColl, Jr., John S. McColl's father, is a
nominee for director at the Company's Annual Meeting of Stockholders on May 1,
2001.
Term of Office:
- ---------------
The term of office for all officers expires at the annual directors'
meeting, but the Board has the power to remove any officer at any time.
Business Experience:
- --------------------
Mr. Cousins has been the Chief Executive Officer of the Company since
its inception.
Mr. Stone joined the Company in June 1999 as President of Cousins Stone
LP, a venture in which the Company had owned a 75% interest until February 28,
2001, when the Company purchased the remaining 25% interest. Prior to that he
was founder and President of the predecessor to Cousins Stone LP, Faison-Stone.
Mr. Stone was named President and Chief Operating Officer of the Company in
February 2001.
Mr. Charlesworth joined the Company in October 1992 and became Senior
Vice President, Secretary and General Counsel in November 1992 and Executive
Vice President and Chief Investment Officer in January 2001. Prior to that
he worked for certain affiliates of Thomas G. Cousins as Chief Financial Officer
and Legal Counsel.
Ms. Barrett joined the Company in October 1992 as Vice President and
Controller and became Senior Vice President - Finance of the Company in August
1997 and Chief Financial Officer in January 2001. Prior to that she was employed
by Arthur Andersen LLP as an Audit Manager.
Mr. Berry has been Senior Vice President since joining the Company in
September 1990. Prior to that he was Commissioner of the State of Georgia's
Department of Industry, Trade and Tourism from 1983 to 1990.
Mr. Jones joined the Company in October 1992 and became Senior Vice
President in November 1995 and President of the Office Division in September
1998. From 1987 until joining the Company, he was Executive Vice President of
New Market Companies, Inc. and affiliates.
Mr. McColl joined the Company in April 1996 as Vice President of the
Office Division. He was promoted in May 1997 to Senior Vice President. Prior
to that he was President of Hutchinson Capital Group, Inc. and an officer of
Quest Capital Corp.
Mr. Joel Murphy joined the Company in October 1992 and became Senior
Vice President of the Company and President of the Retail Division in November
1995. From 1988 until joining the Company, he was Senior Vice President of
New Market Companies, Inc. and affiliates.
Mr. John Murphy has been Senior Vice President since joining the
Company in December 1987.
Mr. Overton has been Senior Vice President since joining the Company
in September 1989. Prior to that he was employed by Hardin Construction Group,
Inc. from 1972 to 1989, where he served as President from 1985 to 1989.
PART II
-------
Item 5. Market for Registrant's Common Stock and Related Security Holder Matters
- --------------------------------------------------------------------------------
The information concerning the market prices for the Registrant's
common stock and related stockholder matters appearing under the caption "Market
and Dividend Information" on page 54 of the Registrant's 2000 Annual Report to
Stockholders is incorporated herein by reference.
Item 6. Selected Financial Data
- -------------------------------
The information appearing under the caption "Five Year Summary of
Selected Financial Data" on page 46 of the Registrant's 2000 Annual Report to
Stockholders is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
-------------
Management's Discussion and Analysis of Financial Condition and Results
of Operations which appears on pages 47 through 53 of the Registrant' s 2000
Annual Report to Stockholders is incorporated herein by reference.
Item 7a. Quantitative and Qualitative Disclosure about Market Risk
- ------------------------------------------------------------------
Quantitative and Qualitative Disclosures about Market Risk, which
appears on page 53 of the Registrant's 2000 Annual Report to Stockholders, is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The Consolidated Financial Statements and Notes to Consolidated
Financial Statements of the Registrant and Report of Independent Public
Accountants which appear on pages 25 through 46 of the Registrant's 2000 Annual
Report to Stockholders are incorporated herein by reference.
The information appearing under the caption "Selected Quarterly
Financial Information (Unaudited)" on page 55 of the Registrant's 2000 Annual
Report to Stockholders is incorporated herein by reference.
Other financial statements and financial statement schedules required
under Regulation S-X are filed pursuant to Item 14 of Part IV of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- --------------------------------------------------------------------------------
Financial Disclosure
--------------------
Not applicable.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
- --------------------------------------------------------------
The information concerning the Directors and Executive Officers of the
Registrant that is required by this Item 10, except that which is presented in
Item X in Part I above, is included under the captions "Directors and Executive
Officers of the Company" on pages 2 through 9 and "Section 16(A) Beneficial
Ownership Reporting Compliance" on page 27 of the Proxy Statement dated March
30, 2001 relating to the 2000 Annual Meeting of the Registrant's Stockholders,
and is incorporated herein by reference.
Item 11. Executive Compensation
- ----------------------------------
The information appearing under the caption "Executive Compensation" on
pages 9 through 12 (other than the Committee Report on Compensation) and
"Compensation of Directors" on page 16 of the Proxy Statement dated March 30,
2001 relating to the 2000 Annual Meeting of the Registrant's Stockholders is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------------------
The information concerning security ownership of certain beneficial
owners and management required by this Item 12 is included under the captions
"Directors and Executive Officers of the Company" on pages 2 through 9 and
"Principal Stockholders" on page 24 of the Proxy Statement dated March 30, 2001
relating to the 2000 Annual Meeting of the Registrant's Stockholders, and is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
- ----------------------------------------------------------
The information concerning certain transactions required by this Item
13 is included under the caption "Certain Transactions" on pages 24 through 26
of the Proxy Statement dated March 30, 2001 relating to the 2000 Annual Meeting
of the Registrant's Stockholders, and is incorporated herein by reference.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- ----------------------------------------------------------------------------
(a) 1. Financial Statements
--------------------------
A. The following Consolidated Financial Statements of the
Registrant, together with the applicable Report of
Independent Public Accountants, are contained on pages 25
through 46 of the Registrant's 2000 Annual Report to
Stockholders and are incorporated herein by reference:
Page Number
in Annual Report
----------------
Consolidated Balance Sheets - December 31,
2000 and 1999 25
Consolidated Statements of Income for the
Years Ended December 31, 2000, 1999
and 1998 26
Consolidated Statements of Stockholders'
Investment for the Years Ended
December 31, 2000, 1999 and 1998 27
Consolidated Statements of Cash Flows for
the Years Ended December 31, 2000, 1999
and 1998 28
Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998 29 through 45
Report of Independent Public Accountants 46
B. The following Financial Statements, together with the
applicable Report of Independent Auditors, of CSC
Associates, L.P., a joint venture of the Registrant meeting
the criteria for a significant subsidiary under the rules
and regulations of the Securities and Exchange Commission,
are filed as a part of this report.
Page Number
in Form l0-K
------------
Report of Independent Auditors F-1
Balance Sheets - December 31, 2000 and 1999 F-2
Statements of Operations for the Years Ended
December 31, 2000, 1999 and 1998 F-3
Statements of Partners' Capital for the Years
Ended December 31, 2000, 1999 and 1998 F-4
Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998 F-5
Notes to Financial Statements F-6 through
December 31, 2000, 1999 and 1998 F-9
2. Financial Statement Schedules
-----------------------------------
The following financial statement schedules, together with the
applicable report of independent public accountants are filed as a
part of this report.
Page Number
in Form l0-K
------------
A. Cousins Properties Incorporated and
Consolidated Entities:
Report of Independent Public
Accountants on Schedule S-7
Schedule III- Real Estate and
Accumulated Depreciation -
December 31, 2000 S-8 through
S-12
B. CSC Associates, L.P.
Schedule III- Real Estate and
Accumulated Depreciation -
December 31, 2000 F-10
NOTE: Other schedules are omitted because of the absence of conditions
under which they are required or because the required information
is given in the financial statements or notes thereto.
Item 14. Continued
- ---------------------
3. Exhibits
--------------
3(a)(i) Articles of Incorporation of Registrant, as
approved by the Stockholders on April 29, 1997,
filed as Exhibit B to the Registrant's Proxy
Statement dated April 29, 1997, and as amended by
the Stockholders on April 21, 1998 as filed in the
Registrant's Proxy Statement dated March 27, 1998,
and incorporated herein by reference.
3(b) By-laws of Registrant, as approved by the
Stockholders on April 30, 1990, and as further
amended by the Stockholders on April 29, 1993,
filed as Exhibit 4(b) to the Registrant's Form S-3
dated September 28, 1993, and incorporated herein
by reference.
4(a) Dividend Reinvestment Plan as restated as of March
27, 1995, filed in the Registrant's Form S-3 dated
March 27, 1995, and incorporated herein by
reference.
10(a)(i) Cousins Properties Incorporated 1989 Stock Option
Plan, as renamed the 1995 Stock Incentive Plan and
approved by the Stockholders on May 6, 1996, filed
as Exhibit A to the Registrant's Proxy Statement
dated May 6, 1996, and as amended by the
Stockholders on April 21, 1998, as filed in the
Registrant's Proxy Statement dated March 27, 1998,
and incorporated herein by reference.
10(a)(ii) Cousins Real Estate Corporation Stock Appreciation
Right Plan, amended and restated as of March 15,
1993, filed as Exhibit 10(a)(ii) to the
Registrant's Form 10-K for the year ended December
31, 1992, and incorporated herein by reference.
10(a)(iii) Cousins Properties Incorporated Stock Appreciation
Right Plan, dated as of March 15, 1993, filed as
Exhibit 10(a)(iii) to the Registrant's Form 10-K
for the year ended December 31, 1992, and
incorporated herein by reference.
10(a)(iv) Cousins Properties Incorporated 1999 Incentive
Stock Plan, as amended and restated, approved by
the Stockholders on December 28, 2000, filed as
Annex A to the Registrant's Proxy Statement dated
December 1, 2000, and incorporated herein by
reference.
10(b)(i) Cousins Properties Incorporated Profit Sharing Plan
as amended and restated effective as of January 1,
1996, filed as Exhibit 10(b)(i) to the Registrant's
Form 10-K for the year ended December 31, 1995, and
incorporated herein by reference.
10(b)(ii) Cousins Properties Incorporated Profit Sharing
Trust Agreement as effective as of January 1, 1991,
filed as Exhibit 10(b)(ii) to the Registrant's Form
10-K for the year ended December 31, 1991, and
incorporated herein by reference.
Item 14. Continued
- ---------------------
10(d) Cousins Properties Incorporated Stock Plan for
Outside Directors, as approved by the Stockholders
on April 29, 1997, filed as Exhibit B to the
Registrant's Proxy Statement dated April 29, 1997,
and incorporated herein by reference.
13 Annual Report to Stockholders for the year ended
December 31, 2000.
21 Subsidiaries of the Registrant.
23(a) Consent of Independent Public Accountants (Arthur
Andersen LLP).
23(b) Consent of Independent Auditors (Ernst & Young LLP).
(b) Reports on Form 8-K.
--------------------------
There were no reports filed on Form 8-K in the quarter ended
December 31, 2000. On March 9, 2001, the Company filed a Form 8-K
specifying certain risk factors relating to the Company and its
business.
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Cousins Properties Incorporated
-------------------------------
(Registrant)
Dated: March 23, 2001
BY: /s/ Kelly H. Barrett
-----------------------------------------
Kelly H. Barrett
Senior Vice President and Chief Financial
Officer
(Principal Financial and Accounting
Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Capacity Date
- --------- -------- ----
Principal Executive Officer:
Chairman of the Board, March 23, 2001
Chief Executive Officer
/s/ T.G. Cousins and Director
- ---------------------------
T. G. Cousins
Principal Financial and Accounting
Officer:
Senior Vice President and March 23, 2001
/s/ Kelly H. Barrett Chief Financial Officer
- --------------------------
Kelly H. Barrett
Additional Directors:
/s/ Richard W. Courts Director March 23, 2001
- -------------------------
Richard W. Courts, II
/s/ Boone A. Knox Director March 23, 2001
- -------------------------
Boone A. Knox
/s/ William Porter Payne Director March 23, 2001
- -------------------------
William Porter Payne
/s/ R. Dary Stone Director March 23, 2001
- -------------------------
R. Dary Stone
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
----------------------------------------------------
To Cousins Properties Incorporated:
We have audited in accordance with auditing standards generally
accepted in the United States, the financial statements included in the Cousins
Properties Incorporated annual report to stockholders incorporated by reference
in this Form l0-K, and have issued our report thereon dated February 6, 2001.
Our audit was made for the purpose of forming an opinion on those statements
taken as a whole. The schedule listed in Item 14, Part (a) 2.A. is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 6, 2001
SCHEDULE III
(Page 1 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 2000
------------------- -------------------- ------------------------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a)
- ----------- ------------ ---- ------------ ------- --------- ------------ ------------ -----
LAND HELD FOR INVESTMENT OR FUTURE DEVELOPMENT
- ----------------------------------------------
North Point Property -
Fulton Co., GA $ -- $ 10,294 $ -- $ 15,338 $(17,037) $ 8,595 $ -- $ 8,595
Salem Road Station
Outparcels -
Newton Co., GA -- 611 -- -- (315) 296 -- 296
Wildwood - Atlanta, GA -- 11,156 -- 4,847 (9,676) 6,327 -- 6,327
----------------------------------------------------------------------------------------------
-- 22,061 -- 20,185 (27,028) 15,218 -- 15,218
----------------------------------------------------------------------------------------------
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 2000
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------
LAND HELD FOR INVESTMENT OR FUTURE DEVELOPMENT
- ----------------------------------------------
North Point Property -
Fulton Co., GA $ -- -- 1970-1985 --
Salem Road Station
Outparcels -
Newton Co., GA -- -- 1999 --
Wildwood - Atlanta, GA -- -- 1971-1989 --
-------
--
-------
SCHEDULE III
(Page 2 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 2000
------------------- -------------------- ----------------------------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a)
- ----------- ------------ ---- ------------ ------- --------- ------------ ------------ -----
OPERATING PROPERTIES
- --------------------
101 Independence Center -
Charlotte, NC $ 46,727 $ 11,096 $ 62,824 $ 3,043 $ -- $ 11,155 $ 65,808 $ 76,963
101 Second Street -
San Francisco, CA 89,597 11,698 -- 78,375 7,504 11,698 85,879 97,577
333 John Carlyle -
Washington, D.C. -- 5,371 -- 22,218 1,483 5,371 23,701 29,072
333 North Point Center East -
Fulton Co., GA -- 551 -- 11,949 809 551 12,758 13,309
555 North Point Center East -
Fulton Co., GA -- 368 -- 15,035 1,171 368 16,206 16,574
600 University Park Place -
Birmingham, AL -- 1,899 -- 15,789 1,768 1,899 17,557 19,456
615 Peachtree Street -
Atlanta, GA -- 4,740 7,229 1,274 -- 4,740 8,503 13,243
AT&T Wireless Services
Headquarters -
Los Angeles, CA -- -- -- 51,302 1,343 -- 52,645 52,645
Inforum -
Atlanta, GA -- 5,226 67,370 13,487 -- 5,226 80,857 86,083
Lakeshore Park Plaza -
Birmingham, AL 10,498 3,362 12,261 907 -- 3,362 13,168 16,530
One Georgia Center -
Atlanta, GA -- 9,267 27,079 -- -- 9,267 27,079 36,346
The Points at Waterview -
Collin Co., TX -- 2,558 22,910 -- -- 2,558 22,910 25,468
Wildwood - 3100 Windy Hill
Road - Atlanta, GA -- -- 17,005 -- -- -- 17,005 17,005
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 2000
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------
OPERATING PROPERTIES
- --------------------
101 Independence Center -
Charlotte, NC $ 12,254 -- 1996 25 Years
101 Second Street -
San Francisco, CA 3,824 1998 1997 30 Years
333 John Carlyle -
Washington, D.C. 1,803 1998 1998 30 Years
333 North Point Center East -
Fulton Co., GA 2,242 1996 1996 30 Years
555 North Point Center East -
Fulton Co., GA 862 1998 1998 30 Years
600 University Park Place -
Birmingham, AL 717 1998 1998 30 Years
615 Peachtree Street -
Atlanta, GA 2,525 -- 1996 15 Years
AT&T Wireless Services
Headquarters -
Los Angeles, CA 3,005 1998 1998 30 Years
Inforum -
Atlanta, GA 10,249 -- 1999 25 Years
Lakeshore Park Plaza -
Birmingham, AL 1,125 -- 1998 30 Years
One Georgia Center -
Atlanta, GA 149 -- 2000 30 Years
The Points at Waterview -
Collin Co., TX -- -- 2000 25 Years
Wildwood - 3100 Windy Hill
Road - Atlanta, GA 2,721 1997 1997 25 Years
SCHEDULE III
(Page 3 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 2000
------------------- -------------------- ----------------------------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a)
- ----------- ------------ ---- ------------ ------- --------- ------------ ------------ -----
OPERATING PROPERTIES (Continued)
- --------------------------------
Wildwood - 3301 Windy
Ridge Parkway -
Atlanta, GA -- 20 -- 9,418 1,516 1,439 9,515 10,954
AtheroGenics -
Fulton Co., GA -- 200 -- 7,075 80 200 7,155 7,355
Meridian Mark Plaza -
Atlanta, GA 25,441 2,200 -- 21,869 1,735 2,200 23,604 25,804
Northside/Alpharetta I -
Fulton Co., GA 10,247 -- 15,577 100 -- -- 15,677 15,677
Northside/Alpharetta II -
Fulton Co., GA -- -- -- 16,797 1,012 -- 17,809 17,809
The Avenue East Cobb -
Cobb Co., GA 38,902 7,205 -- 30,588 1,882 7,205 32,470 39,675
The Avenue of the Peninsula -
Rolling Hills Estates, CA -- 4,338 17,152 55,407 7,120 4,338 79,679 84,017
Colonial Plaza MarketCenter -
Orlando, FL -- 8,500 -- 31,641 1,905 8,500 33,546 42,046
Mira Mesa MarketCenter -
San Diego, CA -- 14,465 -- 29,941 2,415 14,465 32,356 46,821
North Point Stand Alone
Retail Sites -
Fulton Co., GA -- 4,559 -- 426 (1,293) 3,692 -- 3,692
Perimeter Expo -
Atlanta, GA 20,361 8,564 -- 11,181 71 8,564 11,252 19,816
Presidential MarketCenter -
Gwinnett Co., GA -- 3,956 -- 23,453 900 3,956 24,353 28,309
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 2000
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------
OPERATING PROPERTIES (Continued)
- --------------------------------
Wildwood - 3301 Windy
Ridge Parkway -
Atlanta, GA 5,101 1984 1984 30 Years
AtheroGenics -
Fulton Co., GA 811 1998 1998 30 Years
Meridian Mark Plaza -
Atlanta, GA 1,686 1997 1997 30 Years
Northside/Alpharetta I -
Fulton Co., GA 1,595 -- 1998 25 Years
Northside/Alpharetta II -
Fulton Co., GA 747 1998 1998 30 Years
The Avenue East Cobb -
Cobb Co., GA 2,848 1998 1998 30 Years
The Avenue of the Peninsula -
Rolling Hills Estates, CA 1,949 1998 1998 30 Years
Colonial Plaza MarketCenter -
Orlando, FL 6,059 1995 1995 30 Years
Mira Mesa MarketCenter -
San Diego, CA 705 1999 1999 25 Years
North Point Stand Alone
Retail Sites -
Fulton Co., GA 142 -- 1970-1985 Various
Perimeter Expo -
Atlanta, GA 2,909 1993 1993 30 Years
Presidential MarketCenter -
Gwinnett Co., GA 3,874 1993-2000 1993 30 Years
SCHEDULE III
(Page 4 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 2000
------------------- -------------------- ----------------------------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a)
- ----------- ------------ ---- ------------ ------- --------- ------------ ------------ -----
OPERATING PROPERTIES (Continued)
- --------------------------------
Miscellaneous -- 398 145 76 (474) -- 145 145
----------------------------------------------------------------------------------------------
241,773 110,541 249,552 451,351 30,947 110,754 731,637 842,391
----------------------------------------------------------------------------------------------
PROJECTS UNDER CONSTRUCTION
- ---------------------------
55 Second Street -
San Francisco, CA $ -- $ 22,141 $ -- $ 20,039 $ 2,800 $ 24,318 $ 20,662 $ 44,980
1900 Duke Street -
Washington, D.C. -- 3,469 -- 15,578 1,116 3,469 16,694 20,163
Cerritos Corporate Center -
Phase II -
Los Angeles, CA -- -- -- 7,303 136 -- 7,439 7,439
The Avenue Peachtree City -
Fayette Co., GA -- 3,510 -- 10,749 743 3,643 11,359 15,002
Salem Road Station -
Newton Co., GA -- 396 -- 5,519 371 411 5,875 6,286
----------------------------------------------------------------------------------------------
-- 29,516 -- 59,188 5,166 31,841 62,029 93,870
----------------------------------------------------------------------------------------------
RESIDENTIAL LOTS UNDER DEVELOPMENT
- ----------------------------------
Echo Mill -
Cobb Co., GA $ -- $ 5,298 $ -- $ 9,485 $(13,999) $ 784 $ -- $ 784
Alcovy Woods -
Gwinnett Co., GA -- 1,142 -- 2,978 (2,815) 1,305 -- 1,305
River's Call Land -
Cobb Co., GA -- 1,059 -- 2,612 (2,759) 912 -- 912
----------------------------------------------------------------------------------------------
-- 7,499 -- 15,075 (19,573) 3,001 -- 3,001
----------------------------------------------------------------------------------------------
$241,773 $169,617 $249,552 $545,799 $(10,488) $160,814 $793,666 $954,480
=============================================================================================
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 2000
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------
OPERATING PROPERTIES (Continued)
- --------------------------------
OPERATING PROPERTIES (Continued)
Miscellaneous 130 -- 1974-1984 Various
-------
70,032
-------
PROJECTS UNDER CONSTRUCTION
- ---------------------------
55 Second Street -
San Francisco, CA $ -- 1999 1999 --
1900 Duke Street -
Washington, D.C. -- 1998 1998 --
Cerritos Corporate Center -
Phase II -
Los Angeles, CA -- 2000 2000 --
The Avenue Peachtree City -
Fayette Co., GA -- 1999 1999 --
Salem Road Station -
Newton Co., GA -- 1999 1999 --
-------
--
-------
RESIDENTIAL LOTS UNDER DEVELOPMENT
- ----------------------------------
Echo Mill -
Cobb Co., GA $ -- 1994 1994 --
Alcovy Woods -
Gwinnett Co., GA -- 1996 1996 --
River's Call Land -
Cobb Co., GA -- 2000 1971-1989 --
-------
--
-------
$70,032
=======
SCHEDULE III
(Page 5 of 5)
COUSINS PROPERTIES INCORPORATED AND CONSOLIDATED ENTITIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
($ in thousands)
NOTES:
(a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 2000 are as
follows:
Real Estate Accumulated Depreciation
------------------------------ ---------------------------
2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
Balance at beginning of period $768,783 $462,047 $449,619 $35,929 $23,422 $33,617
Additions during the period:
Improvements and other
capitalized costs 213,783 350,114 213,495 -- -- --
Provision for depreciation -- -- -- 34,103 12,507 13,648
------------------------------ ---------------------------
213,783 350,114 213,495 34,103 12,507 13,648
------------------------------ ---------------------------
Deductions during the period:
Cost of real estate contributed -- -- (185,044) -- -- (23,843)
Cost of real estate sold (28,086) (43,378) (16,023) -- -- --
(28,086) (43,378) (201,067) -- -- (23,843)
------------------------------ ---------------------------
Balance at close of period $954,480 $768,783 $462,047 $70,032 $35,929 $23,422
============================== ===========================
REPORT OF INDEPENDENT AUDITORS
------------------------------
To the Partners of
CSC Associates, L.P. (A Limited Partnership)
We have audited the accompanying balance sheets of CSC Associates, L.P. (the
Partnership) as of December 31, 2000 and 1999, and the related statements of
operations, partners' capital, and cash flows for each of the three years in the
period ended December 31, 2000. Our audits also include the financial statement
schedule of CSC Associates, L.P. listed in the Index at Item 14(a). These
financial statements and schedule are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion. In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of CSC Associates, L.P.
as of December 31, 2000 and 1999, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
ERNST & YOUNG LLP
Atlanta, Georgia
February 2, 2001
CSC ASSOCIATES, L.P.
--------------------
BALANCE SHEETS
--------------
DECEMBER 31, 2000 AND 1999
--------------------------
($ in thousands)
ASSETS
------
2000 1999
-------- --------
REAL ESTATE ASSETS:
Building and improvements, including land and
land improvements of $22,818 in 2000 and 1999 $213,317 $212,308
Accumulated depreciation (53,367) (46,795)
--------------------
159,950 165,513
--------------------
CASH AND CASH EQUIVALENTS 982 2,269
--------------------
NOTE RECEIVABLE (Note 4) 68,789 71,399
--------------------
OTHER ASSETS:
Deferred expenses, net of accumulated amortization
of $6,082 and $5,156 in 2000 and 1999, respectively 5,881 6,418
Straight-line rent, interest and other receivables
(Note 3) 11,558 11,674
Furniture, fixtures and equipment, net of accumulated
depreciation of $80 and $63 in 2000 and 1999,
respectively 69 76
Other, net of accumulated amortization of $181 and $139
in 2000 and 1999 (Note 6) 842 884
--------------------
Total other assets 18,350 19,052
--------------------
$248,071 $258,233
====================
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
NOTE PAYABLE (Note 4) $ 68,789 $ 71,399
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 2,199 3,149
--------------------
Total liabilities 70,988 74,548
--------------------
PARTNERS' CAPITAL (Note 1) 177,083 183,685
--------------------
$248,071 $258,233
====================
The accompanying notes are an integral part of these balance sheets.
CSC ASSOCIATES, L.P.
--------------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
-----------------------------------------------------
($ in thousands)
2000 1999 1998
------- ------- -------
REVENUES:
Rental income and recovery of expenses
charged directly to specific tenants $39,339 $38,585 $36,956
Interest income (Note 4) 4,478 4,639 4,790
-----------------------------
Total revenues 43,817 43,224 41,746
-----------------------------
EXPENSES:
Real estate taxes 4,133 3,856 3,407
Management and personnel costs 1,867 1,762 1,686
Cleaning 1,475 1,453 1,352
Utilities 813 874 811
Contract security 517 536 485
Repairs and maintenance 456 465 512
Elevator 337 340 309
Parking 276 286 299
Grounds maintenance 129 138 164
Insurance 110 103 106
General and administrative expenses 75 80 73
Marketing and other expenses 63 43 114
Interest expense (Note 4) 4,478 4,639 4,790
Depreciation and amortization 7,710 7,694 7,444
-----------------------------
Total expenses 22,439 22,269 21,552
-----------------------------
NET INCOME $21,378 $20,955 $20,194
=============================
The accompanying notes are an integral part of these statements.
CSC ASSOCIATES, L.P.
--------------------
STATEMENTS OF PARTNERS' CAPITAL
-------------------------------
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
----------------------------------------------------
($ in thousands)
BALANCE, December 31, 1997 $193,716
Net income 20,194
Distributions (23,700)
--------
BALANCE, December 31, 1998 190,210
Net income 20,955
Distributions (27,480)
--------
BALANCE, December 31, 1999 183,685
Net income 21,378
Distributions (27,980)
--------
BALANCE, December 31, 2000 $177,083
========
The accompanying notes are an integral part of these statements.
CSC ASSOCIATES, L.P.
--------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
----------------------------------------------------
($ in thousands)
2000 1999 1998
------- ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $21,378 $20,955 $20,194
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 7,710 7,694 7,444
Rental revenue recognized on straight-line
basis different from rental revenue
specified in the lease agreements 207 15 (164)
Change in other receivables and
other assets 130 (170) (207)
Change in accounts payable and
accrued liabilities related to operations (1,015) 27 1,640
-------------------------
Net cash provided by operating activities 28,410 28,521 28,907
-------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to building and improvements (1,322) (99) (3,480)
Payments for deferred expenses (374) (371) (458)
Collection of note receivable 2,610 2,450 2,298
Payments for furniture, fixtures and equipment (21) (43) (15)
-------------------------
Net cash provided by (used in) investing activities 893 1,937 (1,655)
-------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable (2,610) (2,450) (2,298)
Partnership distributions (27,980) (27,480) (23,700)
-------------------------
Net cash used in financing activities (30,590) (29,930) (25,998)
-------------------------
NET (DECREASE) INCREASE IN CASH (1,287) 528 1,254
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 2,269 1,741 487
-------------------------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 982 $ 2,269 $ 1,741
=========================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for interest $ 4,485 $ 4,646 $ 4,802
=========================
The accompanying notes are an integral part of these statements.
CSC ASSOCIATES, L.P.
--------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 2000, 1999 AND 1998
--------------------------------
1. FORMATION OF THE PARTNERSHIP AND TERMS OF THE PARTNERSHIP AGREEMENT
-------------------------------------------------------------------
CSC Associates, L.P. ("CSC" or the "Partnership") was formed under the
terms of a Limited Partnership Agreement dated September 29, 1989 and by the
filing of its Certificate of Limited Partnership on October 27, 1989. C&S
Premises, Inc. ("Premises") and Cousins Properties Incorporated ("CPI") each own
a 1% general partnership and a 49% limited partnership interest in the
Partnership. Premises is a wholly owned subsidiary of NB Holdings Corporation,
which is a wholly owned subsidiary of Bank of America. In 1996 Premises
transferred its 1% general partnership interest in the partnership to C&S
Premises-SPE, Inc., a wholly owned subsidiary of Premises. The Partnership was
formed for the purpose of developing and owning a 1.4 million gross square foot
office tower in downtown Atlanta, Georgia (the "Building"), which is the Atlanta
headquarters of Bank of America Corporation.
The Partnership Agreement and related documents (the "Agreements")
contain among other provisions, the following:
a. CPI is the Managing Partner.
b. CPI is obligated to contribute a total of $18.2 million cash to the
Partnership, all of which has been contributed. Premises is obligated to
contribute land parcels to the Partnership having an aggregate agreed upon value
of $18.2 million, all of which has been contributed, which property value, in
the opinion of the partners, was equal to the estimated fair market value of the
land at the time of formation of the Partnership. The value of the property
contributed by Premises was recorded on the Partnership's books at an amount
equal to the cash contributed by CPI for an equal (50%) partnership interest. In
October 1993, the partners each contributed an additional $86.7 million.
c. No interest is earned on partnership capital.
d. Net income or loss and cash distributions are allocated
to the partners based on their percentage interests (50% each).
2. SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
Capitalization Policies
- -----------------------
All costs related to planning, developing and constructing the Building
plus expenditures for the Building prior to the date it became operational for
financial statement purposes have been capitalized. Interest expense,
amortization of financing costs, and real estate taxes were also capitalized
while the Building was under development.
Depreciation and Amortization
- -----------------------------
Real estate assets are carried at cost. Depreciation of the Building
commenced on the date the Building became operational for financial reporting
purposes and the Building is being depreciated over 40 years. Leasehold and
tenant improvements are amortized over the life of the related lease or the
useful life of the asset, whichever is shorter. Furniture, fixtures, and
equipment are depreciated over 5 years. Deferred expenses, which include certain
marketing and leasing costs and deferred operating expenses which are being
passed through to the tenants, are amortized over the period of estimated
benefit. The straight-line method is used for all depreciation and amortization.
Income Taxes
- ------------
No provision has been made for federal or state income taxes because
each partner's proportionate share of income or loss from the Partnership will
be passed through to be included on each partner's separate tax return.
Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents include all cash and highly liquid money
market instruments. Highly liquid money market instruments include securities
and repurchase agreements with original maturities of three months or less or
money market mutual funds.
Rental Income
- -------------
In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 13, income on leases which include increases in rental rates over the lease
term (other than scheduled increases based on the Consumer Price Index) is
recognized on a straight-line basis.
Allowance for Doubtful Accounts
- -------------------------------
From time to time, the Partnership evaluates the need to establish an
allowance for doubtful accounts based on a review of specific receivables. As of
December 31, 2000 and 1999, there is no allowance for doubtful accounts included
in the accompanying Balance Sheets.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.
3. LEASES
------
The Partnership has leased office space to NB Holdings Corporation, as
well as to unrelated third parties. The lease with NB Holdings Corporation was
negotiated at rates comparable to those quoted to third parties. The leases
contain escalation provisions and provisions requiring tenants to pay a pro rata
share of operating expenses. The leases typically include renewal options and
all are classified and accounted for as operating leases.
At December 31, 2000, future minimum rentals to be received under
existing non-cancelable leases, excluding tenants' current pro rata share of
operating expenses, are as follows ($ in thousands):
Lease Leases
With With
NB Holdings Third
Corporation Parties Total
----------- -------- --------
2001 $ 12,231 $ 17,652 $ 29,883
2002 12,231 18,988 31,219
2003 12,231 19,699 31,930
2004 12,231 18,322 30,553
2005 12,231 18,264 30,495
Subsequent to 2005 78,487 38,279 116,766
-----------------------------------
$139,642 $131,204 $270,846
===================================
In the year ended December 31, 2000 and 1999, income which would have
accrued in accordance with the lease terms exceeded income recognized on a
straight-line basis by $207,000 and $15,000, respectively. At December 31, 2000
and 1999, receivables which related to the cumulative excess of revenues
recognized in accordance with SFAS No. 13 over revenues which accrued in
accordance with the actual lease agreements totaled approximately $10,612,000
and $10,819,000, respectively. Of that amount, 15% was related to leases with NB
Holdings Corporation and approximately 37% and 34% was related to each of two
professional services firms, respectively. At December 31, 2000 NB Holdings
Corporation leased approximately 46% and two professional services firms leased
approximately 18% and 17%, respectively, of the net rentable space of the
Building.
4. NOTE PAYABLE AND NOTE RECEIVABLE
--------------------------------
On February 6, 1996, the Partnership issued $80 million of 6.377%
collateralized notes (the "Notes"). The Notes amortize in equal monthly
installments of $590,680 based on a 20 year amortization schedule, and mature
February 15, 2011. The Notes are non-recourse obligations of the Partnership and
are secured by a Deed to Secure Debt, Assignment of Rents and Security Agreement
covering the Partnership's interest in the Building.
The Partnership has loaned the $80 million proceeds of the Notes to CPI
under a non-recourse loan (the "CPI Loan") secured by CPI's Partnership
interests under the same payment terms as those of the Notes. CPI paid all costs
of issuing the Notes and the CPI Loan, including a $400,000 fee to an affiliate
of Bank of America. In addition, CPI pays a monthly fee to an affiliate of Bank
of America of .025% of the outstanding principal balance of the Notes. These
fees totaled approximately $211,000 and $218,000 in 2000 and 1999, respectively.
The estimated fair value of both the note payable and related note
receivable at December 31, 2000 and 1999 was $66 million and $64 million,
respectively, which was calculated by discounting future cash flows under the
notes at estimated rates at which similar notes would be made currently.
The maturities of the Notes at December 31, 2000 are as follows (in
thousands):
2001 $ 2,782
2002 2,965
2003 3,159
2004 3,367
2005 3,588
Subsequent to 2005 52,928
-------
$68,789
=======
5. RELATED PARTIES
---------------
The Partnership engaged CPI and an affiliate of CPI to manage, develop
and lease the Building. During 2000, 1999 and 1998, fees to CPI and its
affiliate incurred by the Partnership were as follows ($ in thousands):
2000 1999 1998
------ ------ ------
Development and tenant construction fees $ -- $ 27 $ 38
Leasing and procurement fees 109 63 399
Management fees 990 959 917
----------------------------
$1,099 $1,049 $1,354
============================
6. PARKING AGREEMENT
-----------------
On February 7, 1996, CSC entered into a 25 year Cross Parking License
Agreement ("Parking Agreement") with the North Avenue Presbyterian Church
("NAPC") which allows CSC the use of 200 parking spaces in NAPC's parking deck
which is located adjacent to NAPC. The agreement commenced on October 1, 1996.
CSC paid a $1,000,000 contribution toward the construction cost of the parking
deck as consideration for the Parking Agreement. The $1,000,000 contribution
plus additional costs of approximately $23,000 are included in Other Assets and
are being amortized over the 25 year life of the Parking Agreement. NAPC may
reduce the number of parking spaces available to the Partnership or may
terminate the Parking Agreement under certain conditions after the sixth year,
at which time a partial refund of the $1,000,000 would be due to CSC. In
addition, CSC is responsible for the maintenance of the parking deck and the
payment of the related operating expenses.
SCHEDULE III
CSC ASSOCIATES, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
($ in thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent Carried at
to Company to Acquisition December 31, 2000
------------------- -------------------- ----------------------------------
Carrying
Costs
Buildings Less Cost Land Buildings
and Improve- of Sales and Land and Total
Description Encumbrances Land Improvements ments and Other Improvements Improvements (a)
- ----------- ------------ ---- ------------ ------- --------- ------------ ------------ -----
Bank of America Plaza
Atlanta, Georgia $ -- $18,200 $ -- $184,668 $10,449 $22,818 $190,499 $213,317
===============================================================================================
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which De-
preciation
Accumu- In 2000
lated Date of Income
Deprecia- Construc- Date Statement
Description tion (a) tion Acquired Is Computed
- ----------- -------- --------- -------- -----------
Bank of America Plaza
Atlanta, Georgia $53,367 1990-1992 1990 5-40
=======
NOTE: (a) Reconciliations of total real estate carrying value and accumulated
depreciation for the three years ended December 31, 2000 are as
follows:
Real Estate Accumulated Depreciation
------------------------------ ---------------------------
2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
Balance at beginning of period $212,308 $212,334 $209,120 $46,795 $40,033 $33,621
Improvements and other capitalized costs 1,324 99 3,480 -- -- --
Write-offs of improvements and other
capitalized costs (315) (125) (266) (315) (125) (266)
Provision for depreciation -- -- -- 6,887 6,887 6,678
------------------------------ ---------------------------
Balance at end of period $213,317 $212,308 $212,334 $53,367 $46,795 $40,033
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