UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10 - K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the fiscal year ended December 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File Number 1-12298
REGENCY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 59-3191743
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
121 West Forsyth Street, Suite 200 (904) 356-7000
Jacksonville, Florida 32202 (Registrant's telephone No.)
(Address of principal executive offices) (zip code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 par value
(Title of Class)
New York Stock Exchange
(Name of exchange on which registered)
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. (X)
The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant was approximately $400,826,415 based on the
closing price on the New York Stock Exchange for such stock on March 16, 2000.
The approximate number of shares of Registrant's voting common stock outstanding
was 56,510,825 as of March 16, 2000.
Documents Incorporated by Reference
Portions of the Registrant's Proxy Statement in connection with its 2000 Annual
Meeting of Shareholders are incorporated by reference in Part III.
TABLE OF CONTENTS
Form 10-K
Item
No.
Report Page
PART I
1. Business..................................................................1
2. Properties................................................................5
3. Legal Proceedings........................................................12
4. Submission of Matters to a Vote of Security Holders......................12
PART II
5. Market for the Registrant's Common Equity and Related
Shareholder Matters......................................................12
6. Selected Consolidated Financial Data.....................................14
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................15
7a. Quantitative and Qualitative Disclosures About Market Risk...............22
8. Consolidated Financial Statements and Supplementary Data.................22
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................................22
PART III
10. Directors and Executive Officers of the Registrant.......................23
11. Executive Compensation...................................................23
12. Security Ownership of Certain Beneficial Owners and Management...........24
13. Certain Relationships and Related Transactions...........................24
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K........24
PART I
Item 1. Business
Regency Realty Corporation ("Regency" or "Company") acquires, owns,
develops and manages neighborhood shopping centers in targeted markets. As of
December 31, 1999, Regency owned, directly or indirectly, 216 properties in the
United States, containing approximately 24.8 million square feet of gross
leasable area ("GLA").
As of December 31, 1999, Regency had an investment in real estate of
approximately $2.6 billion. Regency's shopping centers were approximately 92.4%
leased as of December 31, 1999.
On February 26, 1999, Regency's stockholders approved the merger of Pacific
Retail Trust ("Pacific") into the Company in a stock for stock transaction (0.48
Regency share for 1 Pacific share). At December 31, 1998, Pacific owned 71
retail shopping centers that were operating or under construction containing 8.4
million SF of GLA. The total cost to acquire Pacific was $1.157 billion based on
the value of Regency shares issued, the assumption of $379 million of
outstanding debt and other liabilities, and transaction costs.
The Company, a Florida corporation organized in 1993, commenced operations as a
real estate investment trust (REIT) in 1993 with the completion of its initial
public offering, and was the successor to the real estate business of The
Regency Group, Inc. which had operated since 1963.
Regency formed Regency Centers, L.P. ("RCLP" or "Partnership"), a limited
partnership and a public registrant, in 1996, and consolidated substantially all
of its retail shopping centers into RCLP during 1999. RCLP is now the primary
entity through which Regency owns its properties and through which Regency
intends to expand its ownership and operation of retail shopping centers. At
December 31, 1999, Regency owned approximately 97% of the outstanding common
operating partnership units of RCLP. Regency, the general partner of RCLP, fully
controls the operating and investing decisions and activities of RCLP, and
accordingly, the following discussion of Regency's business also includes the
business of RCLP.
See also footnote 3, Segments, to the consolidated financial statements included
herein, for a related discussion of the Company's business.
Operating and Investment Philosophy
Regency's key operating and investment objective is to create long-term
shareholder value by:
growing its high quality real estate portfolio of grocery-anchored
neighborhood shopping centers in attractive markets,
maximizing the value of the portfolio through its "Retail Operating
System," which incorporates research based investment strategies,
value-added leasing and management systems, and customer-driven development
programs, and
using conservative financial management and Regency's substantial capital
base to access the most cost effective capital to fund Regency's growth.
Grocery-Anchored Strategy
Regency focuses its investment strategy on grocery-anchored neighborhood
shopping centers which are located in infill locations or high growth corridors.
Infill locations are situated in densely populated residential communities
where there are significant barriers to entry, such as zoning restrictions,
growth management laws or limited availability of sites for development or
expansions. Regency is focused on building a platform of grocery-anchored
neighborhood shopping centers because grocery stores provide convenience
shopping for daily necessities, generate foot traffic for adjacent "side shop"
tenants and should be better able to withstand adverse economic conditions. By
marketing to leading supermarket chains, Regency believes it can attract the
best "side shop" merchants and enhance revenue potential.
Research Driven Market Selection
Regency targets specific markets in the United States that offer greater growth
in population, household income and employment than the national averages. In
addition, Regency believes that it can achieve "critical mass" in these markets
(defined as owning or managing 4 to 5 shopping centers) and that it can generate
sustainable competitive advantages, through long-term leases to the predominant
grocery-anchor and other barriers to entry from competition. Within these
markets, Regency's research and investment staff further defines and selects
submarkets and trade areas based on additional analysis of the above data. This
research is used to support either the acquisiton or development decision and
assist in the leasing of major and local tenant space.
Retail Operating System
Regency's Retail Operating System drives its value-added operating strategy.
Its Retail Operating System is characterized
by:
proactive leasing and management;
value enhancing remerchandising initiatives;
Regency's "preferred customer initiative"; and
a customer-driven development and redevelopment program.
Proactive leasing and management
Regency's integrated approach to asset management strengthens its leasing and
management efforts. Asset managers are an integral component of the acquisition
and development teams. Asset managers are responsible not only for the general
operations of their centers, but also for coordinating leasing efforts, thereby
aligning their interests with Regency's. In addition, Regency's information
systems allow managers to spot future lease expirations and to proactively
market and remerchandise spaces several years in advance of such expirations.
Value enhancing remerchandising initiatives
Regency believes that certain shopping centers under-serve their customers,
reducing foot traffic and negatively affecting the tenants located in the
shopping center. In response, Regency has a remerchandising program directed at
obtaining the optimum mix of tenants offering goods, personal services and
entertainment and dining options in each of its shopping centers. By
re-tenanting shopping centers with tenants that more effectively service the
community, Regency expects to increase sales, and therefore the value of its
shopping centers.
Preferred customer initiative
Regency is implementing the "Preferred Customer Initiative" to enable the
Company to profit from the platform's national and individual market strength
and to enhance internal growth. The "Preferred Customer Initiative" is Regency's
relationship based operating system that focuses on national and regional
retailers that are the best operators in their merchandising categories. With
this customer focused operating system that is augmented by merchandising
research, the Company is in a unique position to continue to attract and better
serve strong retailers by offering multiple leasing opportunities in centers
that have the anchors and demographics that drive retail sales. The Company also
serves the tenants by creating standard lease forms. Regency's objective is to
create a brand with our tenant customers as the preferred neighborhood center
operator and developer. Management expects the benefits of the preferred
customer initiative to improve the merchandising and performance of the shopping
centers, establish brand recognition among leading operators, reduce turnover of
tenants and reduce vacancies.
Customer-driven development and redevelopment program
Regency conducts its development and redevelopment program in close cooperation
with its major grocery customers including Kroger, Publix, Safeway, and
Albertsons. Regency uses its development capabilities to service its customer's
growth needs by building or re-developing modern properties with state of the
art supermarket formats that generate higher returns for Regency under new
long-term leases. Regency's developments are customer driven with an executed
lease from the anchor typically in hand prior to purchase of the land. As a
result of the anchor commitment and Regency's relationship with key, side shop
neighborhood retailers, a significant percentage of the GLA is pre-committed
before commencement of construction.
Capital Strategy
Regency intends to maintain a conservative capital structure designed to enhance
access to capital on favorable terms, to allow growth through development and
acquisition and to promote future earnings growth. Regency's organizational
documents do not limit the amount of debt that may be incurred; however,
limitations have been established within the covenants of certain loan
agreements related to RCLP's unsecured acquisition and development line of
credit (the "Line') and medium term notes.
Regency's strategy to add shareholder value is designed to enable the Company to
profit from the anomaly between low current pricing for public equity and the
attractive private market valuations of quality neighborhood centers and to
increase returns on invested capital by leveraging Regency's core competencies.
Asset optimization will enable Regency to recycle capital from the sale of
developments at low cap rates and dispositions of properties with limited growth
prospects in the private market at attractive valuations. The proceeds will be
used to finance new development of shopping centers and repurchases of Regency
common stock at attractive yields.
Regency is actively pursuing a joint venture structure to leverage the Company's
expertise and the quality of the operating properties and development pipeline.
Value would be realized by contributing centers and selling developments to the
venture at private market pricing. The joint venture structure will contribute
to cost effectively financing Regency's development program, allow Regency to
recognize profits from sales and expand the shopping center platform. All of
these actions are expected to lead to higher returns on the Company's invested
capital.
Risk Factors Relating to Ownership of Regency Common Stock
The Company is subject to certain business risks arising in connection with
owning real estate which include, among others:
the bankruptcy or insolvency of, or a downturn in the business of, any of
its major tenants could reduce cash flow,
the possibility that such tenants will not renew their leases as they
expire or renew at lower rental rates could reduce cash flow,
risks related to the internet and e-commerce reducing the demand for
shopping centers,
vacated anchor space will affect the entire shopping center because of the
loss of the departed anchor tenant's customer drawing power,
poor market conditions could create an over supply of space or a reduction
in demand for real estate in markets where the Company owns shopping
centers,
the Company's rapid growth could place strains on its resources,
risks relating to leverage, including uncertainty that the Company will be
able to refinance its indebtedness, and the risk of higher interest rates,
unsuccessful development activities could reduce cash flow,
the Company's inability to satisfy its cash requirements for operations
and the possibility that the Company may be required to borrow funds to
meet distribution requirements in order to maintain its qualification as a
REIT,
potential liability for unknown or future environmental matters and costs
of compliance with the Americans with Disabilities Act,
the risk of uninsured losses, and
unfavorable economic conditions could also result in the inability of
tenants in certain retail sectors to meet their lease obligations and
otherwise could adversely affect the Company's ability to attract and
retain desirable tenants.
Compliance with Governmental Regulations
Under various federal, state and local laws, ordinances and regulations, an
owner or manager of real estate may be liable for the costs of removal or
remediation of certain hazardous or toxic substances on such property. These
laws often impose liability without regard to whether the owner knew of, or was
responsible for, the presence of the hazardous or toxic substances. The cost of
required remediation and the owner's liability for remediation could exceed the
value of the property and/or the aggregate assets of the owner. The presence of
such substances, or the failure to properly remediate such substances, may
adversely affect the owner's ability to sell or rent the property or borrow
using the property as collateral. Regency has a number of properties that will
require or are currently undergoing varying levels of environmental remediation.
These remediations are not expected to have a material financial effect on the
Company due to financial statement reserves and various state-regulated programs
that shift the responsibility and cost for remediation to the state.
Competition
The Company believes the ownership of shopping centers is highly fragmented,
with less than 10% owned by REITs. Regency faces competition from other REITs in
the acquisition, ownership and leasing of shopping centers as well as from
numerous small owners. Regency competes for the development of shopping centers
with other REITs engaged in development activities as well as with local,
regional and national real estate developers. Regency develops properties by
applying its proprietary research methods to identify development and leasing
opportunities and by significantly pre-leasing development centers before
beginning construction. Regency competes for the acquisition of properties
through proprietary research that identifies opportunities in markets with high
barriers to entry and higher-than-average population growth and household
income. Regency seeks to maximize rents per square foot by establishing
relationships with supermarket chains that are first or second in their markets
and leasing non-anchor space in multiple centers to national or regional
tenants. There can be no assurance, however, that other real estate owners or
developers will not utilize similar research methods and target the same markets
and anchor tenants that Regency targets or that such entities will successfully
control these markets and tenants to the exclusion of Regency.
Changes in Policies
The Company's Board of Directors determines policies with respect to certain
activities, including its debt capitalization, growth, distributions, REIT
status, and investment and operating strategies. The Board of Directors may
amend these policies at any time without a vote of the Company's shareholders.
Employees
The Company's headquarters are located in Jacksonville, Florida. The Company
presently maintains 16 offices in 10 states where it conducts management,
leasing and development activities. As of December 31, 1999, the Company had
approximately 342 employees and believes that relations with its employees are
good.
Item 2. Properties
The Company's properties summarized by state including their gross leasable areas (GLA) follows:
December 31, 1999 December 31, 1998
Location # Properties GLA % Leased # Properties GLA % Leased
-------- ------------ --------- -------- ------------ ----------- --------
Florida 48 5,909,534 89.9% 46 5,728,347 91.4%
California 36 3,858,628 96.4% - - -
Texas 29 3,849,549 88.8% 5 479,900 84.7%
Georgia 27 2,716,763 92.3% 27 2,737,590 93.1%
Ohio 14 1,923,100 94.0% 13 1,786,521 93.4%
North Carolina 12 1,241,639 97.9% 12 1,239,783 98.3%
Washington 9 1,066,962 90.6% - - -
Colorado 10 903,502 94.1% 5 447,569 89.4%
Oregon 7 616,070 89.2% - - -
Alabama 5 516,061 99.5% 5 516,060 99.0%
Arizona 2 326,984 99.7% - - -
Tennessee 3 271,697 98.9% 4 295,179 96.8%
Michigan 3 250,655 81.7% 2 177,929 81.5%
Delaware 1 232,754 96.3% 1 232,752 94.8%
Kentucky 1 205,061 91.8% 1 205,060 95.6%
Virginia 2 197,324 96.1% 2 197,324 97.7%
Mississippi 2 185,061 96.6% 2 185,061 97.6%
Illinois 1 178,600 85.9% 1 178,600 86.9%
South Carolina 2 162,056 98.8% 2 162,056 100.0%
Missouri 1 82,498 95.8% 1 82,498 99.8%
Wyoming 1 75,000 81.3% - - -
--- ---------- ----- --- ---------- ------
Total 216 24,769,498 92.4% 129 14,652,229 92.9%
=== ========== ===== === ========== ======
The following table summarizes the largest tenants occupying the Company's
shopping centers based upon a percentage of total annualized base rent exceeding
.5% at December 31, 1999. The table includes 100% of the base rent from leases
of properties owned by joint ventures. Excluding the portion of base rent of
joint ventures not owned by the Company, Kroger's percentage of annualized
Company base rent is 8.96%.
Summary of Principal Tenants > .5% of Annualized Base Rent
(including Properties Under Development)
% to Company Total % of Annualized # of
Tenant SF Owned GLA Rent Base Rent Stores
------- --------- -------------- -------- ---------- -------
Kroger 3,023,033 12.2% $26,792,538 10.8% 52
Publix 1,589,522 6.4% 10,913,249 4.4% 36
Safeway 1,237,432 5.0% 10,824,727 4.4% 26
Albertsons 727,353 2.9% 6,943,882 2.8% 14
Blockbuster 387,607 1.6% 6,657,620 2.7% 66
Winn Dixie 801,461 3.2% 5,440,487 2.2% 17
Harris Teeter 275,075 1.1% 2,967,636 1.2% 6
Hallmark 208,897 0.8% 2,927,996 1.2% 51
K-Mart 507,645 2.0% 2,615,359 1.1% 6
Walgreens 247,331 1.0% 2,421,341 1.0% 18
Eckerd 253,730 1.0% 2,089,310 0.8% 26
Wal-Mart 486,168 2.0% 1,993,727 0.8% 6
Long's Drugs 207,715 0.8% 1,943,129 0.8% 9
Hollywood Video 102,105 0.4% 1,763,850 0.7% 16
H.E.B. Grocery 150,682 0.6% 1,674,162 0.7% 2
Rite Aid 140,265 0.6% 1,368,549 0.6% 9
Stein Mart 217,445 0.9% 1,262,297 0.5% 6
Gigante 138,286 0.6% 1,246,379 0.5% 2
The Company's leases have lease terms generally ranging from three to five years
for tenant space under 5,000 square feet. Leases greater than 10,000 square feet
generally have lease terms in excess of five years, mostly comprised of anchor
tenants. Many of the anchor leases contain provisions allowing the tenant the
option of extending the term of the lease at expiration. The Company's leases
provide for the monthly payment in advance of fixed minimum rentals, additional
rents calculated as a percentage of the tenant's sales, the tenant's pro rata
share of real estate taxes, insurance, and common area maintenance expenses, and
reimbursement for utility costs if not directly metered. The following table
sets forth a schedule of lease expirations for the next ten years, assuming that
no tenants exercise renewal options:
Future
Percent of Minimum Percent of
Lease Total Rent Total
Expiration Expiring Company Expiring Minimum
Year GLA GLA Leases Rent (2)
---- --- --- ------ --------
(1) 753,072 3.3% $ 7,289,259 2.9%
2000 1,421,654 6.3% 18,741,279 7.4%
2001 1,900,419 8.4% 26,044,118 10.3%
2002 2,067,832 9.1% 26,474,089 10.5%
2003 1,881,410 8.3% 25,000,774 9.9%
2004 2,096,070 9.2% 29,057,071 11.5%
2005 983,698 4.3% 10,588,958 4.2%
2006 941,374 4.1% 10,388,261 4.1%
2007 955,386 4.2% 9,469,798 3.8%
2008 1,056,659 4.7% 8,677,459 3.4%
2009 871,219 3.8% 8,691,709 3.4%
---------- ----- ------------- -----
10 Yr Total 14,928,793 65.8% $ 180,422,775 71.5%
---------- ----- ------------- -----
(1) leased currently under month to month rent or in process of renewal.
(2) total minimum rent includes current minimum rent and future contractual rent
steps for all properties, but excludes additional rent such as percentage rent,
common area maintenance, real estate taxes and insurance reimbursements.
See the property table below and also see Item 7, Management's Discussion and
Analysis for further information about the Company's properties.
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- -------------- -------- ----------- ---------- ---------- ---------
FLORIDA
Jacksonville /
North Florida
- -------------
Anastasia 1993 1988 102,342 90.2% Publix
Bolton Plaza 1994 1988 172,938 100.0% --
Carriage Gate 1994 1978 76,833 78.6% --
Courtyard (3) 1993 1987 67,794 12.7% Albertson's (4)
Ensley Square (5) 1997 1977 62,362 97.3% Delchamps
Fleming Island 1998 1994 80,205 100.0% Publix
Highlands Square (6) 1998 1999 262,549 80.4% Publix/Winn-Dixie
Julington Village (6) 1999 1999 81,820 69.9% Publix
Millhopper (3) 1993 1974 84,065 97.0% Publix
Newberry Square 1994 1986 180,524 96.8% Publix
Old St. Augustine Plaza 1996 1990 170,220 97.6% Publix
Palm Harbour 1996 1991 172,758 90.7% Publix
Pine Tree Plaza 1997 1999 60,787 98.4% Publix
Regency Court 1997 1992 218,665 96.6% --
South Monroe 1996 1998 80,188 95.5% Winn-Dixie
Tampa / Orlando
- ---------------
Beneva Village Shops 1998 1987 141,532 96.0% Publix
Bloomingdale Square 1998 1987 267,935 95.5% Publix
Kings Crossing Sun City (6) 1999 75,020 68.5% Publix
Mainstreet Square 1997 1988 107,159 93.0% Winn-Dixie
Mariner's Village 1997 1986 117,665 94.4% Winn-Dixie
Market Place - St. Petersburg 1995 1983 86,496 100.0% Publix
Peachland Promenade 1995 1991 82,082 89.9% Publix
Regency Square 1993 1986 341,446 87.7% --
at Brandon (3)
Seven Springs 1994 1986 162,580 86.7% Winn-Dixie
Terrace Walk (3) 1993 1990 50,926 41.3% --
Town Square (6) 1997 1999 43,796 0.0% --
University Collections 1996 1984 106,627 82.6% Kash N Karry (4)
Village Center-Tampa 1995 1993 174,780 90.2% Publix
West Palm Beach /
Treasure Coast
- --------------
Boynton Lakes Plaza 1997 1993 130,925 100.0% Winn-Dixie
Chasewood Plaza (3) 1993 1986 141,034 91.0% Publix
Chasewood Storage (3) 1993 1986 42,810 100.0% --
East Port Plaza 1997 1991 235,842 93.4% Publix
Martin Downs Village Center(3) 1993 1985 121,946 91.7% --
Martin Downs Village Shoppes 1993 1998 49,773 93.0% --
Ocean Breeze (3) 1993 1985 108,209 85.4% Publix
Ocean East (5) 1996 1997 113,328 92.9% Stuart Foods
Tequesta Shoppes 1996 1986 109,766 93.4% Publix
Town Center at Martin Downs 1996 1996 64,546 93.5% Publix
Wellington Market Place 1995 1990 178,155 90.7% Winn-Dixie
Wellington Town Square 1996 1982 105,150 95.8% Publix
Miami / Ft. Lauderdale
- ----------------------
Aventura 1994 1974 102,876 100.0% Publix
Berkshire Commons 1994 1992 106,354 98.5% Publix
Garden Square 1997 1991 90,033 94.0% Publix
North Miami (3) 1993 1988 42,500 100.0% Publix
Palm Trails Plaza 1997 1998 76,067 98.3% Winn-Dixie
Shoppes @ 104 1998 1990 108,189 95.4% Winn Dixie
Tamiami Trail 1997 1987 110,867 94.9% Publix
University Market Place 1993 1990 129,121 78.4% Albertson's (4)
Welleby 1996 1982 109,949 89.9% Publix
--------- ------
Subtotal/Weighted
Average(Florida) 5,909,534 89.9%
--------- ------
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- --------- --------
CALIFORNIA
Los Angeles / SCA
- -----------------
Bristol and Warner 1999 1998 121,677 95.6% Food 4 Less
Costa Verde 1999 1988 178,619 100.0% Albertson's
Crossroads Plaza 1999 1988 60,638 100.0% Gigante
El Camino 1999 1995 135,883 99.3% Von's Food & Drug
El Norte Parkway Plaza 1984 87,990 96.9% Von's Food & Drug
Folsom (6) 1999 1999 - 0.0% --
Friars Mission 1999 1989 145,608 100.0% Ralph's
Hawthorne 1999 1999 92,496 99.5% Lucky's
Heritage Plaza 1999 1981 231,883 99.9% Ralph's
Long Beach Corporate Sq. (6) 1999 54,923 100.0% Ralph's
Monrovia (6) 1999 1999 48,187 96.9% --
Morningside Plaza 1999 1996 91,599 100.0% Albertson's
Newland Center 1999 1985 166,492 97.1% Lucky's
Oakbrook Plaza 1999 1982 83,278 94.4% Albertson's
Plaza de Hacienda 1999 1991 125,602 95.6% Food 4 Less
Plaza Hermosa 1999 1984 94,939 100.0% Von's Food & Drug
Rancho Santa Margarita (6) 1999 152,260 51.9% --
Rona Plaza 1999 1989 51,779 100.0% Food 4 Less
Santa Ana Downtown Plaza 1987 100,305 100.0% Food 4 Less
Twin Peaks 1999 1988 198,139 97.6% Lucky's
Ventura Village 1999 1984 76,070 95.7% Von's Food & Drug
Westlake Village Plaza 1975 190,655 98.9% Von's Food & Drug
Woodman - Van Nuys 1999 1992 107,570 96.3% Gigante
San Francisco / NCA
- -------------------
Arden Square 1999 1994 100,162 94.8% --
Blossom Valley 1999 1990 91,969 96.8% Safeway
Country Club 1999 1994 111,251 100.0% Albertson's
Diablo Plaza 1999 1982 63,265 100.0% Safeway (4)
Encina Grande 1999 1965 102,499 100.0% Safeway
Loehmann's Plaza 1999 1983 113,309 94.9% Safeway (4)
San Leandro 1999 1982 50,853 100.0% Safeway (4)
Sequoia Station 1999 1996 103,388 99.5% Safeway (4)
Strawflower Village 1999 1985 78,827 95.4% Safeway
Tassajara Crossing 1999 1990 141,790 98.1% Safeway
The Promenade 1999 1989 136,022 96.2% Bel Air Market
West Park Plaza 1999 1996 88,103 100.0% Safeway
Woodside Central 1999 1993 80,598 100.0% --
--------- ------
Subtotal/Weighted
Average(California) 3,858,628 96.4%
--------- ------
TEXAS
Austin
- ------
Hancock Center 1999 1998 413,757 97.6% H.E.B.
North Hills 1999 1995 144,019 98.7% H.E.B.
Dallas / Ft. Worth
- ------------------
Arapaho Village 1999 1997 108,816 82.4% Tom Thumb
Bethany Lake (5) 1998 1998 74,066 100.0% Kroger
Casa Linda Plaza 1999 1997 324,620 87.4% Albertson's
Cooper Street 1999 1992 133,239 100.0% --
Creekside (5) 1998 1998 96,816 96.0% Kroger
Harwood Hills PH I & II 1996 122,860 93.9% Tom Thumb
Hebron Park (6) 1999 1999 47,312 76.2% Albertson's (4)
Hillcrest Village 1999 1991 14,488 100.0% --
Keller Town Center (6) 1999 113,000 62.4% Tom Thumb
MacArthur Park Phase II (6) 1999 197,643 59.5% Kroger
Market @ Preston Forest 1990 90,170 100.0% Tom Thumb
Market @ Round Rock 1987 123,345 99.8% Albertson's
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- --------- ---------
TEXAS
Dallas / Ft. Worth (Continued)
- ------------------------------
Mills Pointe 1999 1986 126,238 97.4% Tom Thumb
Mockingbird Commons 1987 121,415 93.2% Tom Thumb
Northview Plaza 1999 1991 117,034 91.6% Kroger
Preston Brook - Frisco (5)(6) 1998 1998 91,274 96.5% Kroger
Preston Park 1999 1985 268,869 99.4% Tom Thumb
Prestonwood (6) 1999 1999 100,421 48.6% Albertson's (4)
Ridglea Plaza 1999 1986 197,961 79.6% Tom Thumb
Shiloh Springs (5) 1998 1998 88,865 96.8% Kroger
Southpark 1999 1997 146,225 93.9% Albertson's
Tarrant Pkwy Plaza (6) 1999 33,500 12.5% Albertson's (4)
The Village 1999 1982 95,148 90.7% Tom Thumb
Trophy Club (6) 1999 1999 107,700 72.1% Tom Thumb
Valley Ranch PH I, II & III 1997 117,281 99.9% Tom Thumb
Village Center - Southlake (5) 1998) 1998 118,172 88.6% Kroger
Houston
- -------
Champions Forest 1999 1983 115,295 96.9% Randall's Food
--------- ------
Subtotal/Weighted
Average(Texas) 3,849,549 88.8%
--------- ------
GEORGIA
Atlanta
- -------
Ashford Place 1997 1993 53,345 100.0% --
Braelin Village (5) 1997 1991 226,522 97.0% Kroger
Briarcliff LaVista 1997 1962 41,098 100.0% --
Briarcliff Village (6) 1997 1990 183,752 92.3% Publix
Buckhead Court 1997 1984 55,227 91.3% --
Cambridge Square 1996 1979 69,650 76.4% Harris Teeter
Cromwell Square 1997 1990 70,282 95.1% --
Cumming 400 1997 1994 126,899 93.7% Publix
Delk Spectrum (3)(5) 1998 1991 100,880 100.0% A&P
Dunwoody Hall 1997 1986 82,527 48.4% --
Dunwoody Village (5) 1997 1975 114,658 92.5% Ingles
Loehmann's Plaza 1997 1986 137,635 95.7% --
Lovejoy Station 1997 1995 77,336 100.0% Publix
Memorial Bend 1997 1995 182,781 92.4% Publix
Orchard Square 1995 1987 85,941 52.3% --
Paces Ferry Plaza 1997 1987 61,693 92.3% --
Powers Ferry Square 1997 1987 97,809 97.1% Harry's
Powers Ferry Village 1997 1994 78,995 99.9% Publix
Rivermont Station 1997 1996 90,267 100.0% Harris Teeter
Roswell Village 1997 1997 143,980 97.7% Publix
Russell Ridge 1994 1995 98,556 100.0% Kroger
Sandy Plains Village 1996 1992 175,035 92.1% Kroger
Sandy Springs Village 1997 1997 45,039 100.0% --
Trowbridge Crossing (5) 1997 1997 62,558 96.3% Publix
Other Markets
- -------------
Evans Crossing 1998 1993 83,681 100.0% Kroger
LaGrangeMarketplace(3) 1993 1989 76,327 95.2% Winn-Dixie
Parkway Station (5) 1996 1983 94,290 85.0% Kroger
--------- ------
Subtotal/Weighted
Average(Georgia) 2,716,763 92.3%
--------- ------
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- ---------- --------
OHIO
Cincinnati
- ----------
Beckett Commons 1998 1995 112,936 100.0% Kroger
Cherry Grove 1998 1997 185,498 100.0% Kroger
Hamilton Meadows 1998 1989 126,252 97.8% Kroger (4)
Hyde Park Plaza 1997 1995 374,544 98.1% Kroger/Winn-Dixie
Shoppes at Mason 1998 1997 80,880 95.1% Kroger
Silverlake 1998 1988 100,246 93.4% Kroger
Westchester Plaza 1998 1988 88,181 100.0% Kroger
Columbus
East Pointe 1998 1993 86,524 95.1% Kroger
Hampstead Village (6) 1999 91,805 82.5% Kroger
Kingsdale (6) 1997 1999 270,697 74.0% Big Bear
North Gate/(Maxtown) 1998 1996 85,101 100.0% Kroger
Park Place 1998 1988 106,833 98.6% Big Bear
Windmiller Plaza 1998 1997 120,509 97.1% Kroger
Worthington 1998 1991 93,094 100.0% Kroger
--------- ------
Subtotal/Weighted
Average(Ohio) 1,923,100 94.0%
--------- ------
NORTH CAROLINA
Asheville
- ---------
Oakley Plaza 1997 1988 118,728 100.0% Bi-Lo
Charlotte
- ---------
Carmel Commons 1997 1979 132,651 96.5% Fresh Market
City View 1996 1993 77,550 95.4% Winn-Dixie
Union Square 1996 1989 97,191 98.8% Harris Teeter
Raleigh / Durham
- ----------------
Bent Tree Plaza 1998 1994 79,503 100.0% Kroger
Garner Town Square 1998 1998 221,576 98.1% Kroger
Glenwood Village 1997 1983 42,864 100.0% Harris Teeter
Lake Pine Plaza 1998 1997 87,691 97.6% Kroger
Maynard Crossing 1998 1997 122,814 98.2% Kroger
Southpoint Crossing (5) 1998 1998 103,128 92.6% Kroger
Woodcroft 1996 1984 85,353 100.0% Food Lion
Winston-Salem
- -------------
Kernersville Marketplace 1998 1997 72,590 100.0% Harris Teeter
--------- ------
Subtotal/Weighted
Average(North Carolina) 1,241,639 97.9%
--------- ------
WASHINGTON
Seattle
- -------
Cascade Plaza (6) 1999 1999 215,477 67.1% Safeway
Inglewood Plaza 1999 1985 17,253 100.0% --
James Center (6) 1999 1999 114,175 86.9% Fred Myer
Lake Meridian 1999 1989 165,210 92.7% Fred Myer
Pine Lake Village 1999 1989 100,953 100.0% Quality Foods
Sammamish Highlands 1992 101,289 100.0% Safeway (4)
South Point Plaza 1999 1997 190,454 98.9% Cost Cutters
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- --------- ---------
WASHINGTON
Seattle (Continued)
- -------------------
Southcenter 1999 1990 58,281 100.0% --
Thomas Lake 1999 1998 103,870 100.0% Albertson's
--------- ------
Subtotal/Weighted
Average(Washington) 1,066,962 90.6%
--------- ------
COLORADO
Colorado Springs
- ----------------
Cheyenne Meadows (5) 1998 1998 89,893 100.0% King Soopers
Jackson Creek (5) 1998 1999 85,259 98.4% Kroger
Woodman Plaza (6)(5) 1998 1998 97,913 85.7% King Soopers
Denver
- ------
Boulevard Center 1999 1986 92,483 95.2% Safeway (4)
Buckley Square 1999 1978 116,206 93.2% King Soopers
Leetsdale Marketplace 1993 119,916 98.7% Safeway
Littleton Square 1999 1997 94,257 100.0% King Soopers
Lloyd King Center (5) 1998 1998 83,326 100.0% King Soopers
Redlands Marketplace (6) 1999 37,817 36.3% Albertson's (4)
Stroh Ranch (5) 1998 1998 86,432 100.0% King Soopers
--------- ------
Subtotal/Weighted
Average(Colorado) 903,502 94.1%
--------- ------
OREGON
Portland
- --------
Cherry Park Market (Grmr) 1997 113,518 78.5% Safeway
Murrayhill Marketplace 1988 149,214 98.4% Thriftway
Sherwood II (6) 1999 1999 32,600 0.0% Safeway (4)
Sherwood Market Center 1995 124,256 97.3% Albertson's
Sunnside 205 1999 1988 53,279 93.6% --
Walker Center 1999 1987 89,624 100.0% --
West Hills 1999 1998 53,579 100.0% QFC
--------- ------
Subtotal/Weighted
Average(Oregon) 616,070 89.2%
--------- ------
ALABAMA
Birmingham
- ----------
Villages of Trussville (3) 1993 1987 69,280 97.7% Bruno's
West County Marketplace (3) 1993 1987 129,155 100.0% Food World (4)
Montgomery
- ----------
Country Club (3) 1993 1991 67,622 100.0% Winn-Dixie
Other Markets
- -------------
Bonner's Point (3) 1993 1985 87,281 98.6% Winn-Dixie
Marketplace -
Alexander City (3) 1993 1987 162,723 100.0% Winn-Dixie
--------- ------
Subtotal/Weighted
Average(Alabama) 516,061 99.5%
--------- ------
ARIZONA
- -------
Paseo Village 1999 1998 92,399 100.0% ABCO
Pima Crossing 1999 1996 234,585 99.5% Basha's
--------- ------
Subtotal/Weighted
Average(Arizona) 326,984 99.7%
--------- ------
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- -------------- ----------- ----------- --------- --------- -------
TENNESSEE
Nashville
- ---------
Harpeth Village (5) 1997 1998 70,091 100.0% Albertson's
Nashboro Village 1998 1998 86,811 96.5% Kroger
Peartree Village 1997 1997 114,795 100.0% Harris Teeter
---------- --------
Subtotal/Weighted
Average(Tennessee) 271,697 98.9%
--------- --------
MICHIGAN
- --------
Fenton Marketplace (6) 1999 73,339 73.3% Farmer Jack
Lakeshore 1998 1996 85,395 98.7% Kroger
Waterford (6) 1998 1998 91,921 72.6% Kroger
---------- --------
Subtotal/Weighted
Average(Michigan) 250,655 81.7%
---------- --------
VIRGINIA
- --------
Brookville Plaza 1998 1991 63,664 95.8% Kroger
Statler Square 1998 1996 133,660 96.3% Kroger
---------- --------
Subtotal/Weighted
Average(Virginia) 197,324 96.1%
---------- --------
MISSISSIPPI
- -----------
Columbia Marketplace(3) 1993 1988 136,002 98.7% Winn-Dixie
Lucedale Marketplace(3) 1993 1989 49,059 91.0% Delchamps
---------- --------
Subtotal/Weighted
Average(Mississippi) 185,061 96.6%
---------- --------
SOUTH CAROLINA
- --------------
Merchants Village 1997 1997 79,723 100.0% Publix
Queensborough (5) 1998 1993 82,333 97.7% Publix
---------- --------
Subtotal/Weighted
Average(South Carolina) 162,056 98.8%
---------- --------
DELAWARE
- --------
Pike Creek 1998 1981 232,754 96.3% Acme
KENTUCKY
- --------
Franklin Square 1998 1988 205,061 91.8% Kroger
ILLINOIS
- --------
Hinsdale Lake Commons 1998 1986 178,600 85.9% Dominick's
MISSOURI
- --------
St. Ann Square 1998 1986 82,498 95.8% National
WYOMING
- -------
Dell Range Road (5)(6) 1999 75,000 81.3% King Soopers
---------- --------
Total Weighted Average 24,769,498 92.4%
========== ========
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
FLORIDA
Jacksonville /
North Florida
- --------------
Anastasia -- Hallmark, Schmagel's Bagels, Mailboxes
Bolton Plaza Wal-Mart Radio Shack, Payless Shoes, Mailboxes
Carriage Gate TJ Maxx Brueggers Bagels, Bedfellows, Alterations
Courtyard (3) -- Buffalo's Cafe, Olan Mills
Ensley Square (5) -- Radio Shack, Hallmark, Amsouth Bank
Fleming Island -- Mail Boxes, Etc. ,Radio Shack, Hallmark
Highlands Square (6) Eckerd, Big Lots Hair Cuttery, Rent Way, Precision Printing
Julington Village (6) -- Mailboxes, Etc., H&R Block, Hair Cuttery
Millhopper (3) Eckerd Book Gallery, Postal Svc., Chesapeake Bagel
Newberry Square Kmart H & R Block, Cato Fashions, Olan Mills
Old St. Augustine Plaza Eckerd, Waccamaw Mail Boxes, Etc., Hallmark, Hair Cuttery
Palm Harbour Eckerd, Bealls Mail Boxes, Etc., Hallmark, Merle Norman
Pine Tree Plaza -- Great Clips, CiCi's Pizza, Soupersalad
Regency Court CompUSA, Office Depot H&R Block, Mail Boxes Etc., Payless Shoes
Sports Authority Loop Restaurant, Ashley Furniture Homestore
South Monroe Eckerd Rent-A-Center, H&R Block, Blockbuster
Tampa / Orlando
- ----------------
Beneva Village Shops Walgreen's, Ross Dress for Less Stride Rite, GNC, Subway, H&R Block
Bloomingdale Square Eckerd, Wal-Mart, Beall's Radio Shack, H&R Block, Hallmark
Kings Crossing Sun City (6) -- --
Mainstreet Square Walgreen's Rent-A-Center, Discount Auto Parts, Norwest
Mariner's Village Walgreen's Supercuts. Pak Mail, Allstate Insurance
Market Place - St. Peters Eckerd Mail Boxes, Etc., Republic, Weight Watchers
Peachland Promenade -- Southern Video, Subway, GNC
Regency Square TJ Maxx, AMC Pak Mail, Lens Crafter, Jo-Ann Fabrics
at Brandon (3) Staples, Marshalls S&K Famous Brands, Shoe Carnival
Seven Springs Kmart State Farm, Subway, H & R Block
Terrace Walk (3) -- Cici's Pizza, Norwest Financial
Town Square (6) -- --
University Collections Eckerd Hallmark, Jo-Ann's Fabrics, Dockside Imports
Village Center-Tampa Walgreen's, Stein Mart Hallmark, Blockbuster, Mens Warehouse
West Palm Beach /
Treasure Coast
- --------------
Boynton Lakes Plaza Walgreen's Radio Shack, Baskin Robbins, Dunkin Donuts
Chasewood Plaza (3) Walgreen's Hallmark, GNC, Supercuts
Chasewood Storage (3) -- --
East Port Plaza Walgreen's, Kmart, Sears Homelife H & R Block, GNC, Subway, Cato
Martin Downs Village Center(3) Walgreen's, Coastal Care Payless Theater, Hallmark, Nations Bank
Martin Downs Village Shoppes Walgreen's Mailbox Plus, Allstate, Optical Outlet
Ocean Breeze (3) Walgreen's, Coastal Care Mail Boxes, National Bank, World Travel
Ocean East (5) Coastal Care Mail Boxes, Nations Bank, Royal Dry Cleaners
Tequesta Shoppes Walgreen's Mail Boxes, Etc., Hallmark, Radio Shack
Town Center at Martin Dow -- Mail Boxes, Health Exchange, Champs Hair
Wellington Market Place Walgreen's, United Artists Pak Mail, Subway, Papa John's
Wellington Town Square Eckerd Mail Boxes, State Farm, Coldwell Banker
Miami / Ft. Lauderdale
- -----------------------
Aventura Eckerd Footlabs, Bank United, City of Aventura
Berkshire Commons Walgreen's H & R Block, Century 21, Allstate
Garden Square Eckerd Subway, GNC, Hair Cuttery
North Miami (3) Eckerd --
Palm Trails Plaza -- Mail Boxes, Sal's Pizza, Personnel One
Shoppes @ 104 -- Mail Boxes Etc., GNC, Subway
Tamiami Trail Eckerd Mail Boxes, Etc., Radio Shack, Pizza Hut
University Market Place -- H & R Block, Mail Boxes Etc., Olan Mills
Welleby Walgreen's H & R Block, Mail Boxes Plus, Pizza Hut
Subtotal/Weighted
Average(Florida)
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
CALIFORNIA
Los Angeles / SCA
- -----------------
Bristol and Warner -- Banner Central, Party Supply, Domino's
Costa Verde Pier 1, Bookstar Blockbuster Video, US Post Office, Subway
Crossroads Plaza -- --
El Camino Sav-On Drugs Kinkos, Bank America, State Farm
El Norte Parkway Plaza -- Our Fitness, Great Clips
Folsom (6) -- --
Friars Mission Long's Drugs H&R Block, Mail Boxes Etc., Subway
Hawthorne -- Hollywood Video, Radio Shack, GNC
Heritage Plaza Sav-On Drugs, Ace Hardware Bank of America, H&R Block, Hallmark
Long Beach Corporate Sq. -- --
Monrovia (6) Ross Dress for Less Simmons Beautyrest, Airtouch Cellular
Morningside Plaza -- Hallmark, Subway, Mail Boxes Etc.
Newland Center -- Wells Fargo Bank, Kinko's, Starbucks
Oakbrook Plaza -- Century 21, TCBY Yogurt, Subway
Plaza de Hacienda -- Kragen Auto Parts, Taco Bell
Plaza Hermosa Sav-On Drugs Blockbuster Video, Hallmark, Mail Boxes Etc.
Rancho Santa Margarita (6 Marshalls, Staples --
Rona Plaza -- Home Video, Acapulco Travel
Santa Ana Downtown Plaza Thrifty Drug Blockbuster Video, Little Caesars Pizza
Twin Peaks Target Starbucks, Subway, GNC, Clothestime
Ventura Village -- Blockbuster Video, Papa Johns Pizza
Westlake Village Plaza Long's Drugs Bank of America, Citibank, Blockbuster Video
Woodman - Van Nuys -- Supercuts, H&R Block, Chief Auto Parts
San Francisco / NCA
- -------------------
Arden Square Jo-Ann Fabrics, Office Max Beverages & More, Great Clips
Blossom Valley Long's Drugs US Post Office, Hallmark, Great Clips
Country Club Long's Drugs Blockbuster Video, Subway, GNC
Diablo Plaza Jo-Ann Fabrics Hallmark, Mail Boxes Etc., Clothestime
Encina Grande Walgreens Blockbuster Video, Radio Shack, Mail Boxes
Loehmann's Plaza Long's Drugs, Loehmann's Starbucks, Hallmark, Blockbuster Video
San Leandro -- Radio Shack, Hallmark, Blockbuster Video
Sequoia Station Long's Drugs, Old Navy Starbucks, Sees Candie, United Airlines
Barnes and Noble
Strawflower Village -- Hallmark, Mail Boxes Etc., Subway
Tassajara Crossing Long's Drugs, Ace Hardware Citibank, Hallmark, Petco, GNC
The Promenade Long's Drugs Bank of America, Mail Boxes Etc., GNC
West Park Plaza Rite Aid Blockbuster Video, Starbucks, Supercuts
Woodside Central Marshalls Hollywood Video, Pier 1 Imports, GNC
Subtotal/Weighted
Average(California)
TEXAS
Austin
- -------
Hancock Center Sears, Old Navy Hollywood Video, Radio Shack, GNC
North Hills -- Hollywood Video, Hallmark, Subway
Dallas / Ft. Worth
- ------------------
Arapaho Village -- H&R Block, Hallmark, GNC, Mail Boxes Etc.
Bethany Lake (5) -- Boss Cleaners, Mr. Parcel, Fantastic Sams
Casa Linda Plaza Eckerd, Petco Mail Boxes Etc, Blockbuster Video, Hallmark
Cooper Street Circuit City, Office Max, Jo-Ann Fabrics, Mail Boxes Etc., State Farm
Sears Homelife
Creekside (5) -- Hollywood Video, CICI's,Fantastic Sams
Harwood Hills PH I & II -- Good Year, Sport Clips, Pac N Mail
Hebron Park (6) -- Blockbuster Video, Hallmark, GNC
Hillcrest Village -- Blockbuster Video, American Airlines
Keller Town Center (6) -- Sports Clips, Custom Cleaners
MacArthur Park Phase II ( Barnes & Noble Coldwell Bankers, Great Clips
Market @ Preston Forest -- Nations Bank, Fantastic Sams
Market @ Round Rock -- Radio Shack, H&R Block, Merle Norman
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
TEXAS
Dallas / Ft. Worth (Continued)
- ------------------------------
Mills Pointe -- Blockbuster Video, Hallmark, H&R Block
Mockingbird Commons -- State Farm, GNC, Starbucks
Northview Plaza -- Blockbuster Video, Merle Norman, Pro-Cuts
Preston Brook - Frisco (5 -- Coldwell Banker, GNC, Hair Cuttery
Preston Park Sony Theatres Bath & Body Works, Blockbuster Video
Hallmark, Mail Boxes Etc., Starbucks
Prestonwood (6) -- Hallmark, Blockbuster Video, McAlister's
Ridglea Plaza Eckerd, Stein Mart Radio Shack, Mail Boxes Etc., Pro-Cuts
Shiloh Springs (5) -- GNC, Great Clips, Cardsmart
Southpark Bealls H & R Block, GNC, Mail Boxes Etc.
Tarrant Pkwy Plaza (6) -- Subway, Great Clips, Custom Cleaners
The Village -- Famous Footwear, Hallmark, Boston Market
Trophy Club (6) -- Blockbuster, Bank of America, Subway
Valley Ranch PH I, II & I -- Mail Boxes Etc., GNC, H&R Block
Village Center - Southlak -- Radio Shack, Papa Johns, Smoothie King
Houston
- --------
Champions Forest Eckerd Mail Boxes Etc., GNC, Fantastic Sams
Subtotal/Weighted
Average(Texas)
GEORGIA
Atlanta
- -------
Ashford Place Pier 1 Imports Baskin Robbin, Mail Boxes, Merle Norman
Braelin Village (5) Kmart Baskin Robbins, Mail Boxes Etc.,
Manhattan Bagel, Blockbuster Video, GNC
Briarcliff LaVista Drug Emporium Supercuts, Trust Company Bank
Briarcliff Village (6) Eckerd, TJ Maxx, Office Depot Subway, Hair Cuttery, Famous Footwear
Buckhead Court -- Pavillion, Bellsouth Mobility
Outback Steakhouse
Cambridge Square -- Allstate, AAA Mail & Pkg., Wachovia
Cromwell Square CVS Drug, Haverty's Furniture First Union, Bellsouth Mobility
Hancock Fabrics
Cumming 400 Big Lots Pizza Hut, Hair Cuttery, Autozone
Delk Spectrum (3)(5) Eckerd Mail Boxes, Etc., GNC, Blockbuster Video
Dunwoody Hall Eckerd Texaco, Blimpie, Nations Bank
Dunwoody Village (5) -- Federal Express, Jiffy Lube, Hallmark
Loehmann's Plaza Eckerd, Loehmann's Mail Boxes, Etc., GNC, H & R Block
Lovejoy Station -- State Farm, Pizza Hut, Supercuts
Memorial Bend TJ Maxx Pizza Hut, GNC, H & R Block
Orchard Square CVS Drug Mail Boxes Unlimited, State Farm, Remax
Paces Ferry Plaza -- Blockbuster Video, Nations Bank
Sherwin Williams
Powers Ferry Square CVS Drug Domino's Pizza, Dunkin Donuts, Supercuts
Powers Ferry Village CVS Drug Mail Boxes, Etc., Blimpies
Rivermont Station CVS Drug Pak Mail, GNC, Wolf Camera
Roswell Village Eckerd, Ace Hardware Hallmark, Pizza Hut, Scholtzyky's
Russell Ridge -- Pizza Hut, Pak Mail, Hallmark, GNC
Sandy Plains Village Stein Mart H & R Block, Mail Boxes Etc., Subway
Sandy Springs Village -- Air Touch, Blockbuster Video, Steinway Piano
Trowbridge Crossing (5) -- Domino's, Postal Services, Hair Cuttery
Other Markets
- -------------
Evans Crossing -- Subway, Hair Cuttery, Dollar Tree
LaGrangeMarketplace(3) Eckerd Lee's Nails, It's Fashions, One Price Clothing
Parkway Station (5) -- H & R Block, Pizza Hut, Olan Mills
Subtotal/Weighted
Average(Georgia)
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
OHIO
Cincinnati
- ----------
Beckett Commons -- Mail Boxes, Etc., Subway, Taco Bell
Cherry Grove CVS Drug, TJ Maxx, GNC, Hallmark, Sally Beauty Supply
Hancock Fabrics
Hamilton Meadows Kmart Radio Shack, H&R Block, GNC
Hyde Park Plaza Walgreen's, Michaels, Radio Shack, H&R Block, Hallmark
Barnes & Noble, Old Navy Blockbuster Video, US Post Office, Kinkos
Shoppes at Mason -- Mail Boxes Etc., GNC, Great Clips
Silverlake -- Radio Shack, H&R Block, Great Clips
Westchester Plaza -- Pizza Hut, Subway, GNC
Columbus
- --------
East Pointe -- Mail Boxes, Etc., Hallmark, Liberty Mutual
Hampstead Village (6) -- Blockbuster Video, Great Clips
Kingsdale (6) Stein Mart, Limited Hallmark, Goodyear, Jenny Craig
S&K Menswear Famous Footware
North Gate/(Maxtown) -- Hallmark, GNC, Great Clips
Park Place -- Mail Boxes Etc., Domino's, Subway
Windmiller Plaza Sears Hardware Radio Shack, Sears Optical, Great Clips
Worthington CVS Drug Little Caesar's, Hallmark, Radio Shack
Subtotal/Weighted
Average(Ohio)
NORTH CAROLINA
Asheville
- ---------
Oakley Plaza CVS Drug, Western Auto Little Caesar's, Subway
Baby Superstore Life Uniform
Charlotte
- ---------
Carmel Commons Eckerd, Piece Goods Little Caesar's, Radio Shack, Blimpies
City View CVS Drug, Public Library Bellsouth, Willie's Music
Union Square CVS Drug, Mail Boxes, Etc., Subway, TCBY
Consolidated Theatres
Raleigh / Durham
- ----------------
Bent Tree Plaza -- Pizza Hut, Manhattan Bagel, Parcel Plus
Garner Town Square United Artists, Office Max, Sears Optical, Friedman's Jewelers
Petsmart H & R Block, Shoe Carnival
Glenwood Village -- Domino's Pizza, Simple Pleasures
Lake Pine Plaza -- H & R Block, GNC, Great Clips
Maynard Crossing -- Mail Boxes, Etc., GNC, Hallmark
Southpoint Crossing (5) -- Wolf Camera, GNC, H&R Block
Woodcroft Eckerd, True Value Domino's Pizza, Subway, Allstate
Winston-Salem
- -------------
Kernersville Marketplace -- Mail Boxes, Little Caesar's, Great Clips
Subtotal/Weighted
Average(North Carolina)
- -------------------------
WASHINGTON
Seattle
- -------
Cascade Plaza (6) Long's Drugs JoAnn Fabrics, Fashion Bug
Inglewood Plaza -- Subway, Domino's Pizza
James Center (6) -- Kinko's, Hollywood Video, U.S. Bank
Lake Meridian Bartell Drugs Mail Boxes Etc., Starbucks, Home Video
Pine Lake Village Rite Aid Blockbuster Video, Starbucks, Mail Post
Sammamish Highlands Bartell Drugs, Ace Hardware Hollywood Video, Starbucks, GNC, H&R Block
South Point Plaza Rite Aid, Office Depot, Outback Steakhouse, Mail Boxes Etc.
Pep Boys
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
WASHINGTON
Seattle (Continued)
- -------------------
Southcenter Target (4) GTE Wireless, Supercuts, Starbucks
Thomas Lake Rite Aid Blockbuster Video, Great Clips, Subway
Subtotal/Weighted
Average(Washington)
- -------------------------
COLORADO
Colorado Springs
- ----------------
Cheyenne Meadows (5) -- Hallmark, Nail Center, Cost Cutters
Jackson Creek (5) -- Cost Cutters, Polo Cleaners
Woodman Plaza (6)(5) -- Cost Cutters, GNC, The Nail Center
Denver
- ------
Boulevard Center -- Bennigans, Great Clips, Mail Boxes Etc.
Buckley Square True Value Hardware Hollywood Video, Radio Shack, Subway
Leetsdale Marketplace -- Blockbuster Video, Radio Shack, GNC
Littleton Square Walgreens Blockbuster Video, Hallmark, H&R Block
Lloyd King Center (5) -- GNC, Cost Cutters, Hollywood Video
Redlands Marketplace (6) -- Redland Floral & Gifts
Stroh Ranch (5) -- Cost Cutters, Post Net, Dry Clean Station
Subtotal/Weighted
Average(Colorado)
OREGON
Portland
- --------
Cherry Park Market (Grmr) -- Hollywood Video, Subway, Baskin Robbins
Murrayhill Marketplace -- True Value, World Gym, State Farm
Sherwood II (6) -- --
Sherwood Market Center -- Hallmark, Blimpies, GNC, Supercuts
Sunnside 205 -- Kinko's, State Farm, Coffee Bistro
Walker Center Sportmart Blockbuster Video, Postal Annex
West Hills -- Blockbuster Video, GNC, Starbucks
Subtotal/Weighted
Average(Oregon)
ALABAMA
Birmingham
- ----------
Villages of Trussville (3) CVS Drug Head Start, Cellular One, Mattress Max
West County Marketplace (3) Rite Aid, Wal-Mart Domino's Pizza, GNC, Cato Plus
Montgomery
- ----------
Country Club (3) Rite Aid Radio Shack, Subway, Beltone, GNC
Other Markets
- -------------
Bonner's Point (3) Wal-Mart Subway, Domino's Pizza, Cato
Marketplace - Wal-Mart Domino's Pizza, Subway, Hallmark
Alexander City (3)
Subtotal/Weighted
Average(Alabama)
ARIZONA
- -------
Paseo Village Walgreens Domino's Pizza, Fantastic Sams
Pima Crossing Stein Mart Pier 1 Imports, Blockbuster Video, GNC
Subtotal/Weighted
Average(Arizona)
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
TENNESSEE
Nashville
- ---------
Harpeth Village (5) -- Mail Boxes, Etc., Heritage Cleaners, Great Clips
Nashboro Village -- Hallmark, Fantastic Sams, Cellular Sales
Peartree Village Eckerd, Office Max Hollywood Video, AAA Auto, Royal Thai
Subtotal/Weighted
Average(Tennessee)
MICHIGAN
- --------
Fenton Marketplace (6) -- --
Lakeshore Rite Aid Hallmark, Subway, Baskin Robbins
Waterford (6) -- Supercuts, Hollywood Entertainment
Subtotal/Weighted
Average(Michigan)
VIRGINIA
- --------
Brookville Plaza -- H&R Block, Cost Cutters, Jenny Craig
Statler Square CVS Drug, Staples Hallmark, H & R Block, Hair Cuttery
Subtotal/Weighted
Average(Virginia)
MISSISSIPPI
- -----------
Columbia Marketplace(3) Wal-Mart GNC, Radio Shack, Cato
Lucedale Marketplace(3) Wal-Mart Subway, Cato, Byrd's Cleaners
Subtotal/Weighted
Average(Mississippi)
SOUTH CAROLINA
- --------------
Merchants Village -- Mail Boxes Etc., Hollywood Video, Hallmark
Queensborough (5) -- Mail Boxes, Etc., Supercuts, Pizza Hut
Subtotal/Weighted
Average(South Carolina)
- -------------------------
DELAWARE
- --------
Pike Creek Eckerd, K-mart Radio Shack, H&R Block, TCBY
KENTUCKY
- --------
Franklin Square Rite Aid, JC Penney Mail Boxes, Baskin Robbins, Kay Jewelers
ILLINOIS
- --------
Hinsdale Lake Commons Ace Hardware Hallmark, Blockbuster Video, Fannie Mae
MISSOURI
- --------
St. Ann Square Bally Total Fitness Great Clips, US Navy, US Marines
WYOMING
- -------
Dell Range Road (5)(6) -- --
(1) Or latest renovation
(2) Includes development properties. If development properties are excluded,
the total percentage leased would be 95.5% for Partnership shopping centers
and 95.0% for Company shopping centers.
(3) Company-owned property not owned by the Partnership.
(4) Tenant owns its own building.
(5) Owned by a partnership with outside investors in which the Partnership
(or the Company in the case of a property referred to in note (3)
above) or an affiliate is the general partner.
(6) Property under development or redevelopment.
Item 3. Legal Proceedings
The Company is, from time to time, a party to legal proceedings which arise in
the ordinary course of its business. The Company is not currently involved in
any litigation nor, to management's knowledge, is any litigation threatened
against the Company, the outcome of which would, in management's judgement based
on information currently available, have a material adverse effect on the
financial position or results of operations of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted for stockholder vote during the fourth quarter of
1999.
PART Il
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters
The Company's common stock is traded on the New York Stock Exchange ("NYSE")
under the symbol "REG". The Company currently has approximately 3,500
shareholders. The following table sets forth the high and low prices and the
cash dividends declared on the Company's common stock by quarter for 1999 and
1998.
1999 1998
----------------------------------- --------------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
------- -------- --------- ------- ------- -----------
March 31 $ 23.125 18.750 .46 27.812 24.750 .44
June 30 22.500 19.000 .46 26.687 24.062 .44
September 30 22.125 19.875 .46 26.500 20.500 .44
December 31 20.813 18.750 .46 23.437 20.250 .44
The following describes the registrant's sales of unregistered securities during
the periods covered by this report, each sold in reliance on Rule 506 of the
Securities Act.
The Company intends to pay regular quarterly distributions to its common
stockholders. Future distributions will be declared and paid at the discretion
of the Board of Directors, and will depend upon cash generated by operating
activities, the Company's financial condition, capital requirements, annual
distribution requirements under the REIT provisions of the Internal Revenue Code
of 1986, as amended, and such other factors as the Board of Directors deems
relevant. The Company anticipates that for the foreseeable future, cash
available for distribution will be greater than earnings and profits due to
non-cash expenses, primarily depreciation and amortization, to be incurred by
the Company. Distributions by the Company to the extent of its current and
accumulated earnings and profits for federal income tax purposes will be taxable
to stockholders as ordinary dividend income. Distributions in excess of earnings
and profits generally will be treated as a non-taxable return of capital. Such
distributions have the effect of deferring taxation until the sale of a
stockholder's common stock. In order to maintain its qualification as a REIT,
the Company must make annual distributions to stockholders of at least 95% of
its taxable income (90% effective January 1, 2001). Under certain circumstances,
which management does not expect to occur, the Company could be required to make
distributions in excess of cash available for distributions in order to meet
such requirements. The Company currently maintains the Regency Realty
Corporation Dividend Reinvestment and Stock Purchase Plan which enables its
stockholders to automatically reinvest distributions, as well as, make voluntary
cash payments towards the purchase of additional shares.
Under the loan agreement with the lenders of the Company's line of credit,
distributions may not exceed 95% of Funds from Operations ("FFO") based on the
immediately preceding four quarters. FFO is defined in accordance with the
NAREIT definition as described under Item 7., Management's Discussion and
Analysis. Also in the event of any monetary default, the Company will not make
distributions to stockholders.
On September 3, 1999, the Company through RCLP issued $85 million of 8.75%
Series B Cumulative Redeemable Preferred Units ("Series B Preferred Units") to
an institutional investor in a private placement. The issuance involved the sale
of 850,000 Series B Preferred Units for $100.00 per unit. The Series B Preferred
Units, which may be called by the Partnership at par on or after September 3,
2004, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 8.75%. At any time after September
3, 2009, the Series B Preferred Units may be exchanged for shares of 8.75%
Series B Cumulative Redeemable Preferred Stock of the Company at an exchange
rate of one share of Series B Preferred Stock for one Series B Preferred Unit.
The Series B Preferred Units and Series B Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were used to
reduce the Line.
On September 3, 1999, the Company through RCLP issued $75 million of 9.0% Series
C Cumulative Redeemable Preferred Units ("Series C Preferred Units") to an
institutional investor in a private placement. The issuance involved the sale of
750,000 Series C Preferred Units for $100.00 per unit. The Series C Preferred
Units, which may be called by the Partnership at par on or after September 3,
2004, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 9.0%. At any time after September 3,
2009, the Series C Preferred Units may be exchanged for shares of 9.0% Series C
Cumulative Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series C Preferred Stock for one Series C Preferred Unit. The Series C
Preferred Units and Series C Preferred Stock are not convertible into common
stock of the Company. The net proceeds of the offering were used to reduce the
Line.
On September 29, 1999, the Company through RCLP issued $50 million of 9.125%
Series D Cumulative Redeemable Preferred Units ("Series D Preferred Units") to
an institutional investor in a private placement. The issuance involved the sale
of 500,000 Series D Preferred Units for $100.00 per unit. The Series D Preferred
Units, which may be called by the Partnership at par on or after September 29,
2004, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 9.125%. At any time after September
29, 2009, the Series D Preferred Units may be exchanged for shares of 9.125%
Series D Cumulative Redeemable Preferred Stock of the Company at an exchange
rate of one share of Series D Preferred Stock for one Series D Preferred Unit.
The Series D Preferred Units and Series D Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were used to
reduce the Line.
During 1998, the Company acquired 43 shopping centers and joint ventures for a
total investment of $384.3 million ("1998 Acquisitions"). With respect to these
acquisitions, during 1999, the Company paid contingent consideration valued at
$9.0 million consisting of 69,555 Units, 3,768 shares of common stock, and $7.0
million. During 2000, the Company may pay contingent consideration of up to an
estimated $7.5 million, through the issuance of Units, stock and the payment of
cash.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125% Series A
Cumulative Redeemable Preferred Units ("Series A Preferred Units") to an
institutional investor in a private placement. The issuance involved the sale of
1.6 million Series A Preferred Units for $50.00 per unit. The Series A Preferred
Units, which may be called by the Company at par on or after June 25, 2003, have
no stated maturity or mandatory redemption, and pay a cumulative, quarterly
dividend at an annualized rate of 8.125%. At any time after June 25, 2008, the
Series A Preferred Units may be exchanged for shares of 8.125% Series A
Cumulative Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series A Preferred Stock for one Series A Preferred Unit. The Series A
Preferred Units and Series A Preferred Stock are not convertible into common
stock of the Company.
In November 1998, the Company acquired Park Place shopping center in exchange
for 79,466 Units of Regency Centers, L.P. valued at $26 per Unit plus the
assumption of debt secured by Park Place. During 1999, 3,682 additional units
were issued as contingent consideration.
The Company acquired 35 shopping centers during 1997 (the "1997 Acquisitions")
for approximately $395.7 million. Included in the 1997 Acquisitions are 26
shopping centers acquired from Branch Properties ("Branch") for $232.4 million.
During 1999, the Company issued 298,064 additional Units and shares of common
stock valued at $5.9 million to Branch as contingent consideration for the
satisfaction of certain performance criteria of the properties acquired. During
1998, the Company issued 721,997 additional Units and shares of common stock
valued at $18.2 million to Branch as contingent consideration for the
satisfaction of certain performance criteria of the properties acquired. In
connection with the Units and shares of common stock issued to Branch in March
1998, SC-USREALTY acquired 435,777 shares at $22.125 per share in accordance
with their rights to purchase common stock.
During 1999, the holders of all of Regency's Class B stock converted 2,500,000
shares into 2,975,468 shares of common stock.
Under the loan agreement with the lenders of the Company's line of credit,
distributions may not exceed 95% of Funds from Operations ("FFO") based on the
immediately preceding four quarters. FFO is defined in accordance with the
NAREIT definition as described under Item 7., Management's Discussion and
Analysis. Also in the event of any monetary default, the Company will not make
distributions to stockholders.
Item 6. Selected Consolidated Financial Data
(in thousands, except per share data and number of properties)
The following table sets forth Selected Financial Data on a historical basis for
the five years ended December 31, 1999, for the Company. This information should
be read in conjunction with the financial statements of the Company (including
the related notes thereto) and Management's Discussion and Analysis of the
Financial Condition and Results of Operations, each included elsewhere in this
Form 10-K. This historical Selected Financial Data has been derived from the
audited financial statements.
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Operating Data:
Revenues:
Rental revenues $ 278,960 130,487 88,855 43,433 31,555
Other non-rental revenues 18,239 11,863 8,448 3,444 2,426
Equity in income of investments
in real estate partnerships 4,688 946 33 70 4
------------- ----------- ----------- ----------- ------------
Total revenues 301,887 143,296 97,336 46,948 33,985
------------- ----------- ----------- ----------- ------------
Operating expenses:
Operating, maintenance and real
estate taxes 67,457 30,844 22,904 12,065 8,683
General and administrative 19,747 15,064 9,964 6,048 4,894
Depreciation and amortization 48,612 25,046 16,303 8,059 5,854
------------- ----------- ----------- ----------- -----------
- - Total operating expenses 135,816 70,954 49,171 26,172 19,431
------------- ----------- ----------- ----------- ------------
Interest expense, net of interest income 57,870 26,829 18,667 10,811 8,969
------------- ----------- ----------- ----------- ------------
Income before minority interests and sale of
real estate investments 108,201 45,513 29,498 9,965 5,585
(Loss) gain on sale of real estate investments (233) 10,726 451 - -
------------- ----------- ----------- ----------- ------------
Income before minority interests 107,968 56,239 29,948 9,965 5,585
Minority interest of exchangeable
operating partnership units (2,898) (1,826) (2,042) - -
Minority interest of limited partners (2,856) (464) (505) - -
Minority interest preferred unit distribution (12,368) (3,359) - - -
------------- ----------- ----------- ----------- ------------
Net income 89,846 50,590 27,402 9,965 5,585
Preferred stock dividends (2,245) - - 58 591
------------- ----------- ----------- ----------- ------------
Net income for common stockholders $ 87,601 50,590 $27,402 9,907 4,994
============= ============ =========== =========== ============
Earnings per share:
Basic $ 1.61 1.80 1.28 0.82 0.75
============= ============ =========== =========== ============
Diluted $ 1.61 1.75 1.23 0.82 0.75
============= =========== =========== =========== ============
Other Data:
Common stock outstanding 56,924 25,489 23,992 13,590 9,704
Common Units, preferred stock and Class B
common stock outstanding 3,565 4,337 3,550 29 -
Company owned gross leasable area 24,769 14,652 9,981 5,512 3,981
Number of properties (at end of period) 216 129 89 50 36
Ratio of earnings to fixed charges 1.9 2.1 2.3 1.8 1.5
Balance Sheet Data:
Real estate investments at cost $ 2,636,193 1,250,332 834,402 393,403 279,046
Total assets 2,654,936 1,240,107 826,849 386,524 271,005
Total debt 1,011,967 548,126 278,050 171,607 115,617
Stockholders' equity 1,247,249 550,741 513,627 206,726 147,007
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements and Notes thereto of Regency Realty
Corporation ("Regency" or "Company") appearing elsewhere within.
Organization
The Company is a qualified real estate investment trust ("REIT") which began
operations in 1993. The Company invests in real estate primarily through its
general partnership interest in Regency Centers, L.P., ("RCLP" or "Partnership")
an operating partnership in which the Company currently owns approximately 97%
of the outstanding common partnership units ("Units"). Of the 216 properties
included in the Company's portfolio at December 31, 1999, 198 properties were
owned either fee simple or through partnership interests by RCLP. At December
31, 1999, the Company had an investment in real estate, at cost, of
approximately $2.6 billion of which $2.4 billion or 96% was owned by RCLP.
Shopping Center Business
The Company's principal business is owning, operating and developing
grocery anchored neighborhood shopping centers which are located in infill
locations or high growth corridors. The Company's properties (both operating and
under construction) summarized by state and in order by largest holdings
including their gross leasable areas (GLA) follows:
December 31, 1999 December 31, 1998
----------------- -----------------
Location # Properties GLA % Leased * # Properties GLA % Leased *
-------- ------------ --------- ---------- ------------ ----------- ----------
Florida 48 5,909,534 91.7% 46 5,728,347 92.0%
California 36 3,858,628 98.2% - - -
Texas 29 3,849,549 94.2% 5 479,900 86.3%
Georgia 27 2,716,763 92.3% 27 2,737,590 93.4%
Ohio 14 1,923,100 98.1% 13 1,786,521 96.8%
North Carolina 12 1,241,639 97.9% 12 1,239,783 98.3%
Washington 9 1,066,962 98.1% - - -
Colorado 10 903,502 98.0% 5 447,569 95.2%
Oregon 7 616,070 94.2% - - -
Alabama 5 516,061 99.5% 5 516,060 99.0%
Arizona 2 326,984 99.7% - - -
Tennessee 3 271,697 98.9% 4 295,179 96.8%
Michigan 3 250,655 98.7% 2 177,929 99.0%
Delaware 1 232,754 96.3% 1 232,752 94.8%
Kentucky 1 205,061 91.8% 1 205,060 95.6%
Virginia 2 197,324 96.1% 2 197,324 97.7%
Mississippi 2 185,061 96.6% 2 185,061 97.6%
Illinois 1 178,600 85.9% 1 178,600 86.9%
South Carolina 2 162,056 98.8% 2 162,056 100.0%
Missouri 1 82,498 95.8% 1 82,498 99.8%
Wyoming 1 75,000 - - - -
--- ---------- ----- --- ---------- ------
Total 216 24,769,498 95.0% 129 14,652,229 94.3%
=== ========== ===== === ========== ======
* Excludes properties under construction
The Company is focused on building a platform of grocery anchored neighborhood
shopping centers because grocery stores provide convenience shopping of daily
necessities, foot traffic for adjacent local tenants, and should withstand
adverse economic conditions. The Company's current investment markets have
continued to offer strong stable economies, and accordingly, the Company expects
to realize growth in net income as a result of increasing occupancy in the
portfolio, increasing rental rates, development and acquisition of shopping
centers in targeted markets, and redevelopment of existing shopping centers. The
following table summarizes the four largest grocery tenants occupying the
Company's shopping centers at December 31, 1999:
Grocery Anchor Number of % of % of Annualized Avg Remaining
Stores * Total GLA Base Rent Lease Term
-------------- ---------- ---------- ---------------- ---------------
Kroger 53 12.2% 10.8% 16 yrs
Publix 36 6.4% 4.4% 12 yrs
Safeway 33 5.0% 4.4% 10 yrs
Albertsons 20 2.9% 2.8% 14 yrs
<FN>
* Includes grocery owned stores
</FN>
Acquisition and Development of Shopping Centers
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held real
estate investment trust. The Agreement, among other matters, provided for the
merger of Pacific into Regency, and the exchange of each Pacific common or
preferred share into 0.48 shares of Regency common or preferred stock. The
stockholders approved the merger at a Special Meeting of Stockholders held
February 26, 1999. At the time of the merger, Pacific owned 71 retail shopping
centers that were operating or under construction containing 8.4 million SF of
gross leaseable area. On February 28, 1999, the effective date of the merger,
the Company issued equity instruments valued at $770.6 million to the Pacific
stockholders in exchange for their outstanding common and preferred shares and
units. The total cost to acquire Pacific was approximately $1.157 billion based
on the value of Regency shares issued, including the assumption of $379 million
of outstanding debt and other liabilities of Pacific, and closing costs. The
price per share used to determine the purchase price was $23.325 based on the
five day average of the closing stock price of Regency's common stock on the New
York Stock Exchange immediately before, during and after the date the terms of
the merger were agreed to and announced to the public. The merger was accounted
for as a purchase with the Company as the acquiring entity.
During 1998, the Company acquired 43 shopping centers and joint ventures for a
total investment of $384.3 million ("1998 Acquisitions"). With respect to these
acquisitions, during 1999, the Company paid contingent consideration valued at
$9.0 million consisting of 69,555 Units, 3,768 shares of common stock, and $7.0
million. During 2000, the Company may pay contingent consideration of up to an
estimated $7.5 million, through the issuance of Units, stock and the payment of
cash.
Results from Operations
Comparison 1999 to 1998
Revenues increased $158.6 million or 111% to $301.9 million in 1999. The
increase was due primarily to Pacific and the 1998 Acquisitions providing
increases in revenues of $143.9 million during 1999. At December 31, 1999, the
real estate portfolio contained approximately 24.8 million SF and was 92.4%
leased. Minimum rent increased $114.7 million or 111%, and recoveries from
tenants increased $31.8 million or 132%. On a same property basis (excluding
Pacific, the 1998 Acquisitions, and the office portfolio sold during 1998) gross
rental revenues increased $8.9 million or 8%, primarily due to higher base
rents. Other non-rental revenues from property management, leasing, brokerage,
and development services (service operation segment) provided on properties not
owned by the Company were $18.2 million and $11.9 million in 1999 and 1998,
respectively. This increase of $6.3 million was the result of higher gains on
developments sold. During 1998, the Company sold four office buildings and a
parcel of land for $30.7 million, and recognized a gain on the sale of $10.7
million. As a result of these transactions the Company's real estate portfolio
is comprised entirely of retail shopping centers. The proceeds from the sale
were used to reduce the balance of the unsecured acquisition and development
line of credit (the "Line").
Operating expenses increased $64.9 million or 91% to $135.8 million in 1999.
Combined operating and maintenance, and real estate taxes increased $36.6
million or 118% during 1999 to $67.5 million. The increases are due to Pacific
and the 1998 Acquisitions generating operating and maintenance expenses and real
estate tax increases of $35.9 million during 1999. On a same property basis,
operating and maintenance expenses and real estate taxes increased $879,000 or
3.4%. General and administrative expenses increased 32% during 1999 to $19.3
million due to the hiring of new employees and related office expenses necessary
to manage the shopping centers acquired during 1999 and 1998. Depreciation and
amortization increased $23.6 million during 1999 or 94% primarily due to Pacific
and the 1998 Acquisitions.
Interest expense increased to $60.1 million in 1999 from $28.8 million in 1998
or 109% due to increased average outstanding loan balances related to the
financing of the 1998 Acquisitions on the Line, the assumption of debt for
Pacific and the debt offerings completed in 1999. Weighted average interest
rates decreased .05% during 1999. See further discussion under Acquisition and
Development of Shopping Centers and Liquidity and Capital Resources.
Net income for common stockholders was $87.6 million in 1999 vs. $50.6 million
in 1998, a $37 million or 73% increase for the reasons previously described.
Diluted earnings per share in 1999 was $1.61 vs. $1.75 in 1998 due to the
increase in net income offset by the dilutive impact from the increase in
weighted average common shares and equivalents of 28.6 million primarily due to
the acquisition of Pacific.
Comparison of 1998 to 1997
Revenues increased $46.0 million or 47% to $143.3 million in 1998. The increase
was due primarily to the 1998 and 1997 Acquisitions providing increases in
revenues of $37.5 million during 1998. At December 31, 1998, the real estate
portfolio contained approximately 14.7 million SF and was 92.9% leased. Minimum
rent increased $33.3 million or 47%, and recoveries from tenants increased $7.5
million or 45%. On a same property basis (excluding the 1998 and 1997
Acquisitions, and the office portfolio sold during 1998) gross rental revenues
increased $3.4 million or 6.7%, primarily due to higher base rents. Other
non-rental revenues from property management, leasing, brokerage, and
development services (service operation segment) provided on properties not
owned by the Company were $11.9 million in 1998 compared to $8.4 million in
1997, the increase due primarily to increased brokerage fees and increased
activity in construction and development for third parties. During 1998, the
Company sold four office buildings and a parcel of land for $30.7 million, and
recognized a gain on the sale of $10.7 million. As a result of these
transactions the Company's real estate portfolio is comprised entirely of retail
shopping centers. The proceeds from the sale were used to reduce the balance of
the line of credit.
Operating expenses increased $21.8 million or 44% to $71.0 million in 1998.
Combined operating and maintenance, and real estate taxes increased $7.9 million
or 35% during 1998 to $30.8 million. The increases are due to the 1998 and 1997
Acquisitions generating operating and maintenance expenses and real estate tax
increases of $9.4 million during 1998, partially offset by the sale of the
office buildings. On a same property basis, operating and maintenance expenses
and real estate taxes increased $100,000 or 1%. General and administrative
expenses increased 51% during 1998 to $15.1 million due to the hiring of new
employees and related office expenses necessary to manage the shopping centers
acquired during 1998 and 1997, as well as, the shopping centers the Company
began managing for third parties during 1998 and 1997. Depreciation and
amortization increased $8.7 million during 1998 or 54% primarily due to the 1998
and 1997 Acquisitions.
Interest expense increased to $28.8 million in 1998 from $19.7 million in 1997
or 46% due to increased average outstanding loan balances related to the
financing of the 1998 and 1997 Acquisitions on the Line and the assumption of
debt. Weighted average interest rates increased 0.1% during 1998. See further
discussion under Acquisition and Development of Shopping Centers and Liquidity
and Capital Resources.
Net income for common stockholders was $50.6 million in 1998 vs. $27.4 million
in 1997, a $23.2 million or 85% increase for the reasons previously described.
Diluted earnings per share in 1998 was $1.75 vs. $1.23 in 1997 due to the
increase in net income combined with the dilutive impact from the increase in
weighted average common shares and equivalents of 7.2 million primarily due to
the acquisition of Branch and Midland, the issuance of shares to SC-USREALTY
during 1998 and 1997, and the public offering completed in July, 1997.
Liquidity and Capital Resources
Management anticipates that cash generated from operating activities will
provide the necessary funds on a short-term basis for its operating expenses,
interest expense and scheduled principal payments on outstanding indebtedness,
recurring capital expenditures necessary to properly maintain the shopping
centers, and distributions to share and unit holders. Net cash provided by
operating activities was $151.3 million and $65.0 million for the years ended
December 31, 1999 and 1998, respectively. The Company incurred recurring and
non-recurring capital expenditures (non-recurring expenditures pertain to
immediate building improvements on new acquisitions and anchor tenant
improvements on new leases) of $21.5 million and $8.3 million, during 1999 and
1998, respectively. The Company paid scheduled principal payments of $6.1
million and $3.4 million during 1999 and 1998, respectively. The Company paid
dividends and distributions of $113.1 million and $54.9 million, during 1999 and
1998, respectively, to its share and unit holders.
Management expects to meet long-term liquidity requirements for term debt
payoffs at maturity, non-recurring capital expenditures, and acquisition,
renovation and development of shopping centers from: (i) excess cash generated
from operating activities, (ii) working capital reserves, (iii) additional debt
borrowings, and (iv) additional equity raised in the public markets. Net cash
used in investing activities was $216.6 million and $236.4 million, during 1999
and 1998, respectively, primarily for purposes discussed above under
Acquisitions and Development of Shopping Centers. Net cash provided by financing
activities was $99.5 million and $174.7 million during 1999 and 1998,
respectively, primarily related to the proceeds from the preferred unit and debt
offerings completed during 1999 and 1998. At December 31, 1999, the Company had
50 shopping centers or build to suit projects under construction or undergoing
major renovations, with costs to date of $271.3 million. Total committed costs
necessary to complete the properties under development is estimated to be $135
million and will be expended through 2000.
During 1999, the Board of Directors authorized the repurchase of up to $65
million of the Company's outstanding shares from time to time through periodic
open market transactions or through privately negotiated transactions. At
December 31, 1999, the Company had repurchased 2.7 million shares for $54.5
million.
The Company's outstanding debt at December 31, 1999 and 1998 consists of the
following (in thousands):
1999 1998
---- ----
Notes Payable:
Fixed rate mortgage loans $ 382,715 298,148
Variable rate mortgage loans 11,376 11,051
Fixed rate unsecured loans 370,696 121,296
--------- --------
Total notes payable 764,787 430,495
Acquisition and development line of credit 247,179 117,631
--------- --------
Total $ 1,011,966 548,126
========= ========
During February, 1999, the Company modified the terms of its unsecured line of
credit (the "Line") by increasing the commitment to $635 million. This credit
agreement also provides for a competitive bid facility of up to $250 million of
the commitment amount. Maximum availability under the Line is based on the
discounted value of a pool of eligible unencumbered assets (determined on the
basis of capitalized net operating income) less the amount of the Company's
outstanding unsecured liabilities. The Line matures in February 2001, but may be
extended annually for one year periods. Borrowings under the Line bear interest
at a variable rate based on LIBOR plus a specified spread, (1.00% currently),
which is dependent on the Company's investment grade rating. The Company is
required to comply, and is in compliance, with certain financial and other
covenants customary with this type of unsecured financing. These financial
covenants include among others (i) maintenance of minimum net worth, (ii) ratio
of total liabilities to gross asset value, (iii) ratio of secured indebtedness
to gross asset value, (iv) ratio of EBITDA to interest expense, (v) ratio of
EBITDA to debt service and reserve for replacements, and (vi) ratio of
unencumbered net operating income to interest expense on unsecured indebtedness.
The Line is used primarily to finance the acquisition and development of real
estate, but is also available for general working capital purposes.
Mortgage loans are secured by certain real estate properties, and may be
prepaid, but could be subject to a yield-maintenance premium. Mortgage loans are
generally due in monthly installments of interest and principal and mature over
various terms through 2019. Variable interest rates on mortgage loans are
currently based on LIBOR plus a spread in a range of 125 basis points to 150
basis points. Fixed interest rates on mortgage loans range from 7.04% to 9.8%.
During 1999, the Company assumed debt with a fair value of $402.6 million
related to the acquisition of real estate, which includes debt premiums of $4.1
million based upon the above market interest rates of the debt instruments. Debt
premiums are being amortized over the terms of the related debt instruments.
On April 15, 1999 the Company, through RCLP, completed a $250 million unsecured
debt offering in two tranches. The Company issued $200 million 7.4% notes due
April 1, 2004, priced at 99.922% to yield 7.42%, and $50 million 7.75% notes due
April 1, 2009, priced at 100%. The net proceeds of the offering were used to
reduce the balance of the Line.
As of December 31, 1999, scheduled principal repayments on notes payable and the
Line were as follows (in thousands):
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
--------------- -------------- ---------------
2000 $ 5,711 92,942 98,653
2001 8,053 293,027 301,080
2002 4,943 44,091 49,034
2003 4,933 13,299 18,232
2004 5,327 199,866 205,193
Beyond 5 Years 36,883 290,365 327,248
Net unamortized debt premiums - 12,527 12,527
------ ------- ---------
Total $ 65,850 946,117 1,011,967
====== ======= =========
Unconsolidated partnerships and joint ventures had mortgage loans payable of
$50.3 million at December 31, 1999, and the Company's proportionate share of
these loans was $21.2 million.
The Company qualifies and intends to continue to qualify as a REIT under the
Internal Revenue Code. As a REIT, the Company is allowed to reduce taxable
income by all or a portion of its distributions to stockholders. As
distributions have exceeded taxable income, no provision for federal income
taxes has been made. While the Company intends to continue to pay dividends to
its stockholders, it also will reserve such amounts of cash flow as it considers
necessary for the proper maintenance and improvement of its real estate, while
still maintaining its qualification as a REIT.
The Company's real estate portfolio has grown substantially during 1999 as a
result of the acquisitions and development discussed above. The Company intends
to continue to acquire and develop shopping centers in the near future, and
expects to meet the related capital requirements from borrowings on the Line.
The Company expects to repay the Line from time to time from additional public
and private equity or debt offerings, such as those completed in previous years.
Because such acquisition and development activities are discretionary in nature,
they are not expected to burden the Company's capital resources currently
available for liquidity requirements. The Company expects that cash provided by
operating activities, unused amounts available under the Line, and cash reserves
are adequate to meet liquidity requirements.
New Accounting Standards and Accounting Changes
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities " (FAS 133), which is effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. FAS 133 establishes accounting and
reporting standards for derivative instruments and hedging activities. FAS 133
requires entities to recognize all derivatives as either assets or liabilities
in the balance sheet and measure those instruments at fair value. The Company
does not believe FAS 133 will materially effect its financial statements.
Environmental Matters
The Company like others in the commercial real estate industry, is subject to
numerous environmental laws and regulations and the operation of dry cleaning
plants at the Company's shopping centers is the principal environmental concern.
The Company believes that the dry cleaners are operating in accordance with
current laws and regulations and has established procedures to monitor their
operations. The Company has approximately 38 properties that will require or are
currently undergoing varying levels of environmental remediation. These
remediations are not expected to have a material financial effect on the Company
due to financial statement reserves and various state-regulated programs that
shift the responsibility and cost for remediation to the state. Based on
information presently available, no additional environmental accruals were made
and management believes that the ultimate disposition of currently known matters
will not have a material effect on the financial position, liquidity, or
operations of the Company.
Inflation
Inflation has remained relatively low during 1999 and 1998 and has had a minimal
impact on the operating performance of the shopping centers; however,
substantially all of the Company's long-term leases contain provisions designed
to mitigate the adverse impact of inflation. Such provisions include clauses
enabling the Company to receive percentage rentals based on tenants' gross
sales, which generally increase as prices rise, and/or escalation clauses, which
generally increase rental rates during the terms of the leases. Such escalation
clauses are often related to increases in the consumer price index or similar
inflation indices. In addition, many of the Company's leases are for terms of
less than ten years, which permits the Company to seek increased rents upon
re-rental at market rates. Most of the Company's leases require the tenants to
pay their share of operating expenses, including common area maintenance, real
estate taxes, insurance and utilities, thereby reducing the Company's exposure
to increases in costs and operating expenses resulting from inflation.
Year 2000 System Compliance
Management recognized the potential effect Year 2000 could have on the Company's
operations and, as a result, implemented a Year 2000 Compliance Project. The
project included an awareness phase, an assessment phase, a renovation phase,
and a testing phase of the data processing network, accounting and property
management systems, computer and operating systems, software packages, and
building management systems. The project also included surveying major tenants
and financial institutions. The Company's computer hardware, operating systems,
business systems, general accounting and property management systems and
principal desktop software applications are Year 2000 compliant. Additionally,
the Company did not incur and does not expect any business interruption as a
result of any of its customers or financial institutions not being Year 2000
compliant.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
The Company is exposed to interest rate changes primarily as a result of its
line of credit and long-term debt used to maintain liquidity and fund capital
expenditures and expansion of the Company's real estate investment portfolio and
operations. The Company's interest rate risk management objective is to limit
the impact of interest rate changes on earnings and cash flows and to lower its
overall borrowing costs. To achieve its objectives the Company borrows primarily
at fixed rates and may enter into derivative financial instruments such as
interest rate swaps, caps and treasury locks in order to mitigate its interest
rate risk on a related financial instrument. The Company has no plans to enter
into derivative or interest rate transactions for speculative purposes, and at
December 31, 1999, the Company did not have any borrowings hedged with
derivative financial instruments.
The Company's interest rate risk is monitored using a variety of techniques. The
table below presents the principal amounts maturing (in thousands), weighted
average interest rates of remaining debt, and the fair value of total debt (in
thousands), by year of expected maturity to evaluate the expected cash flows and
sensitivity to interest rate changes.
Fair
2000 2001 2002 2003 2004 Thereafter Total Value
---- ---- ---- ---- ---- ---------- ----- -----
Fixed rate debt 98,521 42,656 49,034 18,232 205,193 327,248 740,884 753,411
Average interest rate for all debt 7.72% 7.81% 7.78% 7.70% 7.66% 7.81% - -
Variable rate LIBOR debt 131 258,424 - - - - 258,555 258,555
Average interest rate for all debt 6.13% 6.13% - - - - - -
As the table incorporates only those exposures that exist as of December 31,
1999, it does not consider those exposures or positions which could arise after
that date. Moreover, because firm commitments are not presented in the table
above, the information presented therein has limited predictive value. As a
result, the Company's ultimate realized gain or loss with respect to interest
rate fluctuations will depend on the exposures that arise during the period, the
Company's hedging strategies at that time, and interest rates.
Forward Looking Statements
This report contains certain forward-looking statements (as such term is defined
in the Private Securities Litigation Reform Act of 1995) and information
relating to the Company that is based on the beliefs of the Company's
management, as well as assumptions made by and information currently available
to management. When used in this report, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions; changes
in customer preferences; competition; changes in technology; the integration of
acquisitions, including Pacific; changes in business strategy; the indebtedness
of the Company; quality of management, business abilities and judgment of the
Company's personnel; the availability, terms and deployment of capital; and
various other factors referenced in this report. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. The Company does not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Item 8. Consolidated Financial Statements and Supplementary Data
The Consolidated Financial Statements and supplementary data included in this
Report are listed in Part IV, Item 14(a).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning the directors of the Company is incorporated herein by
reference to the Company's definitive proxy statement to be filed with the
Securities and Exchange Commission within 120 days after the end of the fiscal
year covered by this Form 10-K with respect to its 2000 Annual Meeting of
Shareholders. The following table provides information concerning the executive
officers of the Company
Executive Officer Positions with the Company
(Age) Principal Occupations During the Past Five Years
-------------------------------------------------
Martin E. Stein, Jr. Chairman, Chief Executive Officer, and Director
(age 47) of the Company since its initial public offering in
October 1993; previously President of the
Company's predecessor real estate division since 1976
Mary Lou Fiala President and Chief Operating Officer since January,
(age 48) 1999 and Director of (age 48) the Company since
March, 1997; Managing Director - Security Capital
U.S. Realty Strategic Group From March 1997 to
January 1999; Senior Vice President and
Director of Stores, New England - Macy's East/
Federated Department Stores from 1994 to March
1997; various retailing positions since joining
Macy's in 1977, including Senior Vice President
for Federated's Burdines Division and Henri
Bendel.
Bruce M. Johnson Managing Director and Chief Financial Officer of the
(age 52) Company since its initial public offering in October
1993, and Executive Vice President of the Company's
predecessor real estate division since 1979.
Item 11. Executive Compensation
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 2000 Annual
Meeting of Shareholders.
Item 12. Security Ownership of Certain Beneficial Owner and Management
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 2000 Annual
Meeting of Shareholders.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 2000 Annual
Meeting of Shareholders.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements and Financial Statement Schedules:
The Company's 1999 financial statements and financial statement schedule,
together with the reports of KPMG LLP are listed on the index immediately
preceding the financial statements at the end of this report.
(b) Reports on Form 8-K:
None
(c) Exhibits:
2. Agreement and Plan of Merger dated as of September 23, 1998 between
Regency Realty Corporation and Pacific Retail Trust (incorporated by
reference to Exhibit 2.1 to the registration statement on Form S-4 of
Regency Realty Corporation, No. 333-65491)
3. Articles of Incorporation and Bylaws
(i) Restated Articles of Incorporation of Regency Realty Corporation
as amended to date.
(ii) Restated Bylaws of Regency Realty Corporation.
4. (a) See exhibits 3(i) and 3(ii) for provisions of the Articles of
Incorporation and Bylaws of Regency Realty Corporation defining
rights of security holders.
(b) Indenture dated July 20, 1998 between Regency Centers, L.P.,
the guarantors named therein and First Union National Bank, as
trustee (incorporated by reference to Exhibit 4.1 to the
registration statement on Form S-4 of Regency Centers, L.P.,
No. 333-63723).
(c) Indenture dated March 9, 1999 between Regency Centers, L.P.,
the guarantors named therein and First Union National Bank, as
trustee (incorporated by reference to Exhibit 4.1 to the
registration statement on Form S-3 of Regency Centers, L.P.,
No. 333-72899)
10. Material Contracts
~(a) Regency Realty Corporation 1993 Long Term Omnibus
Plan, as amended, (incorporated by reference to
Exhibit 10(a) to the Company's Form 10-Q filed August 11, 1999)
~*(b) Form of Stock Purchase Award Agreement
~*(c) Form of Management Stock Pledge Agreement, relating to the Stock
Purchase Award Agreement filed as Exhibit 10(b)
~*(d) Form of Promissory Note, relating to the Stock Purchase Award
Agreement filed as Exhibit 10(b)
~*(e) Form of Option Award Agreement for Key Employees
~*(f) Form of Option Award Agreement for Non-Employee Directors
~*(g) Annual Incentive for Management Plan
~*(h) Form of Director/Officer Indemnification Agreement
- -------------------------
~ Management contract or compensatory plan or arrangement filed
pursuant to S-K 601(10)(iii)(A).
* Included as an exhibit to Pre-effective Amendment No. 2 to the Company's
registration statement on Form S-11 filed October 5, 1993 (33-67258),
and incorporated herein by reference
~*(i) Form of Non-Competition Agreement between Regency Realty
Corporation and Joan W. Stein, Robert L. Stein, Richard W.
Stein, the Martin E. Stein Testamentary Trust A and the
Martin E. Stein Testamentary Trust B.
(j) The following documents, all dated November 5, 1993,
relating to a $51 million loan from Salomon Brothers
Inc. to corporations and subsidiaries wholly owned by
the Company (incorporated by reference to the
Company's Form 10-Q filed December 13, 1993)
(i) Loan Agreement between RSP IV Criterion,
Ltd., Regency Rosewood Temple Terrace, Ltd.,
Treasure Coast Investors, Ltd., Landcom
Regency Mandarin, Ltd., RRC FL SPC, Inc.,
RRC AL SPC, Inc., RRC MS SPC, Inc., and RRC
GA SPC, Inc. (as borrowers) and RRC Lender,
Inc. (as lender)
(ii) Promissory Note in the original principal amount of $51
million
(iii) Undertaking executed by the Registrant and RRC FL SPC, Inc.,
RRC AL SPC, Inc., RRC MS SPC, Inc., and RRC GA SPC, Inc.
(iv) Certificate Purchase Agreement between RRC Lender, Inc.
(as seller) and Salomon Brothers, Inc.( as lender)
(k) The following documents relating to the purchase by Security
Capital U.S. Realty and Security Capital Holdings, S.A. of
up to 45% of the Registrant's outstanding common stock:
++ (i) Stock Purchase Agreement dated June 11, 1996.
++ (ii) Stockholders' Agreement dated July 10, 1996.
(A) First Amendment of Stockholders'
Agreement dated February 10, 1997
(incorporated by reference to the
Company's Form 8-K report filed
March 14, 1997)
(B) Amendment No. 2 to Stockholders'
Agreement dated December 4, 1997
(incorporated by reference to
Exhibit 6.2 to Schedule 13D/A filed
by Security Capital U.S.
Realty on December 11, 1997)
- --------------------------
~ Management contract or compensatory plan or arrangement filed pursuant to
S-K 601(10)(iii)(A).
* Included as an exhibit to Pre-effective Amendment No. 2 to the Company's
registration statement on Form S-11 filed October 5, 1993 (33-67258), and
incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
(C) Amendment No. 3 to Stockholders
Agreement dated September 23, 1998
(incorporated by reference to
Exhibit 8.2 to Schedule 13D/A filed
by Security Capital U.S. Realty on
October 2, 1998)
++ (iii) Registration Rights Agreement dated July 10, 1996.
(l) Stock Grant Plan adopted on January 31, 1994 to grant
stock to employees (incorporated by reference to the
Company's Form 10-Q filed May 12, 1994).
~@ (m) Criteria for Restricted Stock Awards under 1993 Long Term
Omnibus Plan.
~@ (n) Form of 1996 Stock Purchase Award Agreement.
@ (o) Form of 1996 Management Stock Pledge Agreement
relating to the Stock Purchase Award Agreement filed
as Exhibit 10(o).
~@ (p) Form of Promissory Note relating to 1996 Stock Purchase Award
Agreement filed as Exhibit 10(o).
(q) Third Amended and Restated Agreement of Limited Partnership of
Regency Centers, L.P., as amended.
(r) Amended and Restated Credit Agreement dated as of
February 26, 1999 by and among Regency Centers, L.P.,
a Delaware limited partnership (the "Borrower"),
Regency Realty Corporation, a Florida corporation
(the "Parent"), each of the financial institutions
initially a signatory hereto together with their
assignees, (the "Lenders"), and Wells Fargo Bank,
National Association, as contractual representative
of the Lenders to the extent and in the manner
provided.
(i) Letter Agreement dated August 30, 1999
amending the Amended and Restated Credit
Agreement dated February 26, 1999.
(ii) Letter Agreement dated October 29, 1999
amending the Amended and Restated Credit
Agreement dated February 26, 1999.
(s) Purchase and Sale Agreemendment dated as of December 22,
1999 between Regency Realty Group, Inc. and Security
Capital Holdings, S.A. for the purchase of all
outstanding voting stock in PRT Development Corporation.
21.Subsidiaries of the Registrant
23.Consent of KPMG LLP
27.Financial Data Schedule
- --------------------------
~ Management contract or compensatory plan or arrangement filed pursuant
to S-K 601(10)(iii)(A).
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference. @ Filed as an exhibit
to the Company's Form 10-K filed March 25, 1997 and incorporated herein by
reference.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
Date: March 17, 2000 /s/ Martin E. Stein, Jr.
------------------------
Martin E. Stein, Jr.,
Chairman of the Board and
Executive Officer
Date: March 17, 2000 /s/ Mary Lou Fiala
------------------------
Mary Lou Rogers,
President, Chief Operating Officer
and Director
Date: March 17, 2000 /s/ Thomas B. Allin
------------------------
Thomas B. Allin, Director
Date: March 17, 2000 /s/ Raymond L. Bank
------------------------
Raymond L. Bank, Director
Date: March 17, 2000 /s/ A. R. Carpenter
------------------------
A. R. Carpenter, Director
Date: March 17, 2000 /s/ Jeffrey A. Cozad
-------------------------
Jeffrey A. Cozad, Director
Date: March 17, 2000 /s/ J. Dix Druce, Jr.
-------------------------
J. Dix Druce, Jr., Director
Date: March 17, 2000 /s/ John T. Kelley
-------------------------
John T. Kelley, Director
Date: March 17, 2000 /s/ Douglas S. Luke
-------------------------
Douglas S. Luke, Director
Date: March 17, 2000 /s/ John C. Schweitzer
-------------------------
John C. Schweitzer, Director
Date: March 17, 2000 /s/ Lee Wielansky
-------------------------
Lee Wielansky, Director
Date: March 17, 2000 /s/ Terry N. Worrell
-------------------------
Terry N. Worrell, Director
REGENCY REALTY CORPORATION
INDEX TO FINANCIAL STATEMENTS
Regency Realty Corporation
Independent Auditors' Report F-2
Consolidated Balance Sheets as of December 31, 1999 and 1998 F-3
Consolidated Statements of Operations for the years ended
December 31, 1999, 1998, and 1997 F-4
Consolidated Statements of Stockholders'Equity for the years ended
December 31, 1999, 1998 and 1997 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998, and 1997 F-7
Notes to Consolidated Financial Statements F-9
Financial Statement Schedule
Independent Auditors' Report on Financial Statement Schedule S-1
Schedule III - Regency Realty Corporation Combined Real Estate and
Accumulated Depreciation - December 31, 1999 S-2
All other schedules are omitted because they are not applicable or because
information required therein is shown in the financial statements or notes
thereto.
F-1
Independent Auditors' Report
The Shareholders and Board of Directors
Regency Realty Corporation:
We have audited the accompanying consolidated balance sheets of Regency Realty
Corporation as of December 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1999. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Regency Realty
Corporation as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1999 in conformity with generally accepted accounting
principles.
KPMG LLP
Jacksonville, Florida
January 26, 2000
F-2
REGENCY REALTY CORPORATION
Consolidated Balance Sheets
December 31, 1999 and 1998
1999 1998
------- ------
Assets
Real estate investments, at cost (notes 2, 5 and 9):
Land $ 567,673,872 257,669,018
Buildings and improvements 1,834,279,432 925,514,995
Construction in progress - development for investment 81,995,169 15,647,659
Construction in progress - development for sale 85,305,724 20,869,915
-------------- ---------------
2,569,254,197 1,219,701,587
Less: accumulated depreciation 104,467,176 58,983,738
-------------- ---------------
2,464,787,021 1,160,717,849
Investments in real estate partnerships (note 4) 66,938,784 30,630,540
-------------- ---------------
Net real estate investments 2,531,725,805 1,191,348,389
Cash and cash equivalents 54,117,443 19,919,693
Notes receivable 15,673,125 -
Tenant receivables, net of allowance for uncollectible accounts of
$1,883,547 and $1,787,686 at December 31, 1999
and 1998, respectively 33,515,040 16,758,917
Deferred costs, less accumulated amortization of $8,802,559 and
$5,295,336 at December 31, 1999 and 1998, respectively 12,530,546 6,872,023
Other assets 7,374,019 5,208,278
-------------- ---------------
$ 2,654,935,978 1,240,107,300
============== ===============
Liabilities and Stockholders' Equity
Liabilities:
Notes payable (notes 2 and 5) 764,787,207 430,494,910
Acquisition and development line of credit (note 5) 247,179,310 117,631,185
Accounts payable and other liabilities 48,886,111 19,936,424
Tenants' security and escrow deposits 7,952,707 3,110,370
-------------- ---------------
Total liabilities 1,068,805,335 571,172,889
-------------- ---------------
Preferred units (note 6) 283,816,274 78,800,000
Exchangeable operating partnership units (notes 2 and 6): 44,589,873 27,834,330
Limited partners' interest in consolidated partnerships 10,475,321 11,558,618
-------------- --------------
Total minority interest 338,881,468 118,192,948
-------------- ---------------
Stockholders' equity (notes 2, 6, 7 and 8):
Cumulative convertible preferred stock Series 1 and paid
in capital $.01 par value per share: 542,532 shares
authorized; 537,107 issued and outstanding; liquidation
preference $20.83 per share 12,528,032 -
Cumulative convertible preferred stock Series 2 and paid
in capital $.01 par value per share: 1,502,532 shares authorized;
950,400 shares issued and outstanding; liquidation preference
$20.83 per share 22,168,080 -
Common stock $.01 par value per share: 150,000,000 shares authorized;
59,639,536 and 25,488,989 shares issued at December 31, 1999 and
1998, respectively 596,395 254,889
Special common stock - 10,000,000 shares authorized: Class B $.01 par
value per share: 2,500,000 shares issued and outstanding at
December 31, 1998 - 25,000
Treasury stock; 2,715,851 shares held at December 31, 1999, at cost (54,536,612) -
Additonal paid in capital 1,304,257,610 578,466,708
Distributions in excess of net income (26,779,538) (19,395,744)
Stock loans (10,984,792) (8,609,390)
-------------- ---------------
Total stockholders' equity 1,247,249,175 550,741,463
-------------- ---------------
Commitments and contingencies (notes 9 and 10)
$ 2,654,935,978 1,240,107,300
============== ===============
See accompanying notes to consolidated financial statements
F-3
REGENCY REALTY CORPORATION
Consolidated Statements of Operations
For the Years ended December 31, 1999, 1998 and 1997
1999 1998 1997
------- ------ ------
Revenues:
Minimum rent (note 9) $ 218,039,441 103,365,322 70,102,765
Percentage rent 5,000,272 3,012,105 2,151,379
Recoveries from tenants 55,919,788 24,109,519 16,600,925
Other non-rental revenues 18,239,486 11,862,784 8,447,615
Equity in income of investments in
real estate partnerships 4,687,944 946,271 33,311
--------------- --------------- ---------------
Total revenues 301,886,931 143,296,001 97,335,995
--------------- --------------- ---------------
Operating expenses:
Depreciation and amortization 48,611,519 25,046,001 16,303,159
Operating and maintenance 39,204,109 18,455,672 14,212,555
General and administrative 19,274,225 14,564,148 9,324,926
Real estate taxes 28,253,961 12,388,521 8,691,576
Other expenses 472,526 500,000 639,000
--------------- --------------- ---------------
Total operating expenses 135,816,340 70,954,342 49,171,216
--------------- --------------- ---------------
Interest expense (income):
Interest expense 60,067,007 28,786,431 19,667,483
Interest income (2,196,954) (1,957,575) (1,000,227)
--------------- --------------- ---------------
Net interest expense 57,870,053 26,828,856 18,667,256
--------------- --------------- ---------------
Income before minority interests and sale
of real estate investments 108,200,538 45,512,803 29,497,523
(Loss) gain on sale of real estate investments (232,989) 10,725,975 450,902
--------------- --------------- ---------------
Income before minority interests 107,967,549 56,238,778 29,948,425
Minority interest preferred unit distributions (12,368,403) (3,358,333) -
Minority interest of exchangeable partnership units (2,897,778) (1,826,273) (2,041,823)
Minority interest of limited partners (2,855,404) (464,098) (504,947)
--------------- --------------- ---------------
Net income 89,845,964 50,590,074 27,401,655
Preferred stock dividends (2,244,593) - -
--------------- --------------- ---------------
Net income for common stockholders $ 87,601,371 50,590,074 27,401,655
=============== =============== ===============
Net income per share (note 7):
Basic $ 1.61 1.80 1.28
=============== =============== ===============
Diluted $ 1.61 1.75 1.23
=============== =============== ===============
See accompanying notes to consolidated financial statements
F-4
REGENCY REALTY CORPORATION
Consolidated Statements of Stockholders' Equity For the Years ended December 31,
1999, 1998 and 1997
Class B
Series 1 Series 2 Common Common Treasury
Preferred Stock Preferred Stock Stock Stock Stock
----------------- ----------------- ----------- ----------- ----------
Balance at
December 31, 1996 $ - - 106,149 25,000 -
Common stock issued to
SC-USREALTY (note 6) - - 75,135 - -
Common stock issued in
secondary offering, net - - 25,448 - -
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - - 1,359 - -
Common stock issued for
partnership units redeemed - - 30,271 - -
Common stock issued to
acquire real estate - - 1,558 - -
Partial forgiveness or
repayment of stock loans - - - - -
Cash dividends declared:
Common stock, $1.68 per share - - - - -
Net income - - - - -
------------- ----------- ---------- ---------- -----------
Balance at
December 31, 1997 $ - - 239,920 25,000 -
Common stock issued to
SC-USREALTY (note 6) - - 4,358 - -
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - - 4,208 - -
Common stock issued for
partnership units redeemed - - 752 - -
Common stock issued to
acquire real estate (note 2) - - 5,651 - -
Reallocation of minority interest - - - - -
Partial forgiveness or
repayment of stock loans - - - - -
Cash dividends declared:
Common stock, $1.76 per share - - - - -
Net income - - - - -
------------- ----------- ----------- ---------- -----------
Balance at
December 31, 1998 $ - - 254,889 25,000 -
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - - 2,499 - -
Common stock issued or cancelled
under stock loans - - (528) - -
Common stock issued for
partnership units redeemed - - 3,961 - -
Common stock issued for
class B conversion (note 6) - - 29,755 (25,000) -
Preferred stock issued to
acquire Pacific (note 2) 12,654,570 22,392,000 - - -
Common stock issued to
acquire Pacific (note 2) - - 305,669 - -
Common stock issued for
Preferred stock conversion (126,538) (223,920) 150 - -
Repurchase of common stock (note 6) - - - - (54,536,612)
Cash dividends declared:
Common stock ($1.84 per share)
and preferred stock - - - - -
Net income - - - - -
------------- ------------ ----------- ----------- ------------
Balance at December 31, 1999 $ 12,528,032 22,168,080 596,395 - (54,536,612)
============= ============ =========== =========== ============
See accompanying notes to consolidated financial statements.
F-5
REGENCY REALTY CORPORATION
Consolidated Statements of Stockholders' Equity For the Years ended December 31,
1999, 1998 and 1997
Additional Distributions Total
Paid In in exess of Stock Stockholders'
Capital Net Income Loans Equity
---------- ------------- ----------- -----------
Balance at
December 31, 1996 $ 223,080,831 (13,981,770) (2,504,433) 206,725,777
Common stock issued to
SC-USREALTY (note 6) 158,475,802 - - 158,550,937
Common stock issued in
secondary offering, net 65,487,586 - - 65,513,034
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options 3,026,241 - - 3,027,600
Common stock issued for
partnership units redeemed 81,246,827 - - 81,277,098
Common stock issued to
acquire real estate 4,181,591 - - 4,183,149
Partial forgiveness or
repayment of stock loans - - 862,181 862,181
Cash dividends declared:
Common stock, $1.68 per share - (33,914,778) - (33,914,778)
Net income - 27,401,655 - 27,401,655
------------ -------------- ------------- ----------------
Balance at
December 31, 1997 $ 535,498,878 (20,494,893) (1,642,252) 513,626,653
Common stock issued to
SC-USREALTY (note 6) 9,637,208 - - 9,641,566
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options 10,746,701 - (7,409,151) 3,341,758
Common stock issued for
partnership units redeemed 1,670,631 - - 1,671,383
Common stock issued to
acquire real estate (note 2) 14,263,472 - - 14,269,123
Reallocation of minority interest 6,649,818 - - 6,649,818
Partial forgiveness or
repayment of stock loans - - 442,013 442,013
Cash dividends declared:
Common stock, $1.76 per share - (49,490,925) - (49,490,925)
Net income - 50,590,074 - 50,590,074
------------ -------------- ------------- --------------
Balance at
December 31, 1998 $ 578,466,708 (19,395,744) (8,609,390) 550,741,463
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options 3,731,625 - - 3,734,124
Common stock issued or cancelled
under stock loans (1,312,203) - 1,623,552 310,821
Common stock issued for
partnership units redeemed 7,591,712 - - 7,595,673
Common stock issued for
class B conversion (note 6) (4,755) - - -
Preferred stock issued to
acquire Pacific (note 2) - - - 35,046,570
Common stock issued to
acquire Pacific (note 2) 715,434,215 - (3,998,954) 711,740,930
Common stock issued for
Preferred stock conversion 350,308 - - -
Repurchase of common stock (note 6) - - - (54,536,612)
Cash dividends declared:
Common stock ($1.84 per share)
and preferred stock - (97,229,758) - (97,229,758)
Net income - 89,845,964 - 89,845,964
-------------- -------------- ------------- --------------
Balance at December 31, 1999 $ 1,304,257,610 (26,779,538) (10,984,792) 1,247,249,175
============== ============== ============= ==============
See accompanying notes to consolidated financial statements.
F-6
REGENCY REALTY CORPORATION
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999, 1998 and 1997
1999 1998 1997
------------ ------------ -----------
Cash flows from operating activities:
Net income $ 89,845,964 50,590,074 27,401,655
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 48,611,519 25,046,001 16,303,159
Deferred financing cost and debt premium
amortization 556,100 (822,276) 907,224
Stock based compensation 2,411,907 2,422,547 2,561,139
Minority interest preferred unit distributions 12,368,403 3,358,333 -
Minority interest of exchangeable partnership units 2,897,778 1,826,273 2,041,823
Minority interest of limited partners 2,855,404 464,098 504,947
Equity in income of investments in real estate
partnerships (4,687,944) (946,271) (33,311)
Loss (gain) on sale of real estate investments 232,989 (10,725,975) (450,902)
Changes in assets and liabilities:
Tenant receivables (12,342,419) (5,143,938) (3,596,964)
Deferred leasing commissions (5,025,687) (2,337,253) (1,120,184)
Other assets 74,863 (4,059,535) (1,641,108)
Tenants' security and escrow deposits 1,238,955 517,396 480,743
Accounts payable and other liabilities 12,264,438 4,811,991 (314,001)
---------------- --------------- ---------------
Net cash provided by operating activities 151,302,270 65,001,465 43,044,220
---------------- --------------- ---------------
Cash flows from investing activities:
Acquisition and development of real estate (123,125,133) (229,348,139) (162,244,207)
Acquisition of Pacific, net of cash acquired (9,046,230) - -
Investment in real estate partnerships (30,752,019) (29,068,392) -
Capital improvements (21,535,961) (8,325,492) (5,226,138)
Construction in progress for sale, net of reimbursement (38,246,886) (696,876) (23,776,953)
Proceeds from sale of real estate investments 5,389,760 30,662,197 2,645,229
Distributions received from real estate partnership
investments 704,474 383,853 68,688
---------------- --------------- ---------------
Net cash used in investing activities (216,611,995) (236,392,849) (188,533,381)
---------------- --------------- ---------------
Cash flows from financing activities:
Net proceeds from common stock issuance 223,375 10,225,529 225,094,980
Cash paid for Company stock repurchase program (54,536,612) - -
Proceeds from issuance of exchangeable partnership units - 7,694 2,255,140
Redemption of exchangeable partnership units (1,620,939) - -
Purchase of limited partners'interest in consolidated
partnerships (633,673) - -
Contributions from limited partners in consolidated
partnerships - 4,289,995 -
Net distributions to limited partners in consolidated
partnerships (1,071,831) (672,656) (1,124,480)
Distributions to exchangeable partnership unit holders (3,534,515) (2,023,132) (1,954,375)
Distributions to preferred unit holders (12,368,403) (3,358,333) -
Dividends paid to common stockholders (94,985,165) (49,490,925) (33,914,778)
Dividends paid to preferred stockholders (2,244,593) - -
Net proceeds from fixed rate unsecured loans 249,845,300 99,758,000 -
Net proceeds from issuance of preferred units 205,016,274 78,800,000 -
(Repayment) proceeds of acquisition and development
line of credit, net (142,051,875) 69,500,000 (25,570,000)
Proceeds from mortgage loans 445,207 7,345,000 15,972,920
Repayment of mortgage loans (38,620,067) (37,354,368) (26,408,932)
Deferred financing costs (4,355,008) (2,301,821) (568,449)
---------------- --------------- ---------------
Net cash provided by financing activities 99,507,475 174,724,983 153,782,026
---------------- --------------- ---------------
Net increase in cash and cash equivalents 34,197,750 3,333,599 8,292,865
Cash and cash equivalents at beginning of period 19,919,693 16,586,094 8,293,229
---------------- ---------------- ---------------
Cash and cash equivalents at end of period $ 54,117,443 19,919,693 16,586,094
================ ================ ===============
F-7
REGENCY REALTY CORPORATION
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999, 1998 and 1997
continued
1999 1998 1997
---------- --------- --------
Supplemental disclosure of cash flow information -
cash paid for interest (net) of capitalized interest
of approximately $11,029,000, $3,417,000 and $1,896,000
in 1999, 1998 and 1997 respectively) $ 52,914,976 24,693,895 18,631,091
================ =============== ===============
Supplemental disclosure of non-cash transactions:
Mortgage loans assumed for the acquisition of
Pacific and real estate $ 402,582,015 132,832,342 142,448,966
================ =============== ===============
Common stock and exchangeable operating partnership units
issued to acquire investments in real estate partnerships $ 1,949,020 - -
================ =============== ===============
Exchangeable operating partnership units, preferred and
common stock issued for the acquisition of Pacific and
real estate $ 771,351,617 37,023,849 96,380,706
================ =============== ===============
Other liabilities assumed to acquire Pacific $ 13,897,643 - -
================ =============== ===============
See accompanying notes to consolidated financial statements.
F-8
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
1. Summary of Significant Accounting Policies
(a) Organization and Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of Regency Realty Corporation, its wholly owned qualified
REIT subsidiaries, and its majority owned or controlled
subsidiaries and partnerships (the "Company" or "Regency"). All
significant intercompany balances and transactions have been
eliminated in the consolidated financial statements. The Company
owns approximately 97% of the outstanding common units of Regency
Centers, L.P., ("RCLP" or the "Partnership") and partnership
interests ranging from 51% to 93% in five majority owned real
estate partnerships (the "Majority Partnerships"). The equity
interests of third parties held in RCLP and the Majority
Partnerships are included in the consolidated financial statements
as preferred or exchangeable operating partnership units and
limited partners' interests in consolidated partnerships. The
Company is a qualified real estate investment trust ("REIT") which
began operations in 1993.
(b) Revenues
The Company leases space to tenants under agreements with varying
terms. Leases are accounted for as operating leases with minimum
rent recognized on a straight-line basis over the term of the
lease regardless of when payments are due. Accrued rents are
included in tenant receivables. Minimum rent has been adjusted to
reflect the effects of recognizing rent on a straight line basis.
Substantially all of the lease agreements contain provisions which
provide additional rents based on tenants' sales volume
(contingent or percentage rent) or reimbursement of the tenants'
share of real estate taxes and certain common area maintenance
(CAM) costs. These additional rents are recognized as the tenants
achieve the specified targets as defined in the lease agreements.
Other non-rental revenues from management, leasing and brokerage
fees are recognized as revenue when earned.
F-9
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
(c) Real Estate Investments
Land, buildings and improvements are recorded at cost. All direct
and indirect costs clearly associated with the acquisition,
development and construction of real estate projects are
capitalized as buildings and improvements.
Maintenance and repairs which do not improve or extend the useful
lives of the respective assets are reflected in operating and
maintenance expense. The property cost includes the capitalization
of interest expense incurred during construction in accordance
with generally accepted accounting principles.
Depreciation is computed using the straight line method over
estimated useful lives up to forty years for buildings and
improvements, term of lease for tenant improvements, and five to
seven years for furniture and equipment.
The Company reviews its real estate investments for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
(d) Income Taxes
The Company qualifies and intends to continue to qualify as a REIT
under the Internal Revenue Code. As a REIT, the Company is allowed
to reduce taxable income by all or a portion of its distributions
to stockholders. As distributions have exceeded taxable income, no
provision for federal income taxes has been made in the
accompanying consolidated financial statements.
Earnings and profits, which determine the taxability of dividends
to stockholders, differ from net income reported for financial
reporting purposes primarily because of different depreciable
lives and bases of rental properties and differences in the timing
of recognition of earnings upon disposition of properties.
Regency Realty Group, Inc., ("RRG") and PRT Development
Corporation ("PRTDC") are taxable subsidiaries of the Company. RRG
and PRTDC are subject to Federal and state income taxes and file
separate tax returns. RRG and PRTDC had combined taxable income of
$3,465,262, $774,756 and $890,404 for the years ended December 31,
1999, 1998 and 1997, respectively. RRG and PRTDC incurred Federal
and state income tax of $1,502,876, $223,657 and $327,013 in 1999,
1998 and 1997, respectively.
At December 31, 1999 and 1998, the net book basis of real estate
assets exceeds the tax basis by approximately $197 million and
$122 million, respectively, primarily due to the difference
between the cost basis of the assets acquired and their carryover
basis recorded for tax purposes.
F-10
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
(d) Income Taxes (continued)
The following summarizes the tax status of dividends paid during
the years ended December 31 (unaudited):
1999 1998 1997
---- ---- ----
Dividend per share $ 1.84 1.76 1.68
Ordinary income 75% 71% 85%
Capital gain 2% 2% -
Return of capital 23% 27% 15%
(e) Deferred Costs
Deferred costs consist of internal and external commissions
associated with leasing the rental property and loan costs
incurred in obtaining financing which are limited to initial
direct and incremental costs. The net leasing commission balance
was $7.1 and $3.3 million at December 31, 1999 and 1998,
respectively. The net loan cost balance was $5.4 and $3.5 million
at December 31, 1999 and 1998, respectively. Such costs are
deferred and amortized over the terms of the respective leases and
loans.
(f) Earnings Per Share
Basic net income per share of common stock is computed based upon
the weighted average number of common shares outstanding during
the year. Diluted net income per share also includes common share
equivalents for stock options, exchangeable partnership units,
preferred stock, and Class B common stock when dilutive. See note
7 for the calculation of earnings per share.
(g) Cash and Cash Equivalents
Any instruments which have an original maturity of ninety days or
less when purchased are considered cash equivalents.
(h) Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities, at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
(i) Stock Option Plan
The Company applies the provisions of SFAS No. 123, "Accounting
for Stock Based Compensation", which allows companies a choice in
the method of accounting for stock options. Entities may recognize
as expense over the vesting period the fair value of all
stock-based awards on the date of grant or SFAS No. 123 also
permits entities to continue to apply the provisions of APB
Opinion No. 25 and provide pro
F-11
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
(i) Stock Option Plan (continued)
forma net income and pro forma earnings per share disclosures for
employee stock option grants made as if the fair-value-based
method defined in SFAS No. 123 had been applied. APB Opinion No.
25 "Accounting for Stock Issued to Employees", and related
interpretations states that compensation expense would be recorded
on the date of grant only if the current market price of the
underlying stock exceeded the exercise price. The Company
has elected to continue to apply the provisions of APB Opinion
No. 25 and provide the pro forma disclosure provisions of SFAS No.
123.
(j) Reclassifications
Certain reclassifications have been made to the 1998 amounts to
conform to classifications adopted in 1999.
2. Acquisitions of Shopping Centers
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held
real estate investment trust. The Agreement, among other matters,
provided for the merger of Pacific into Regency, and the exchange of each
Pacific common or preferred share into 0.48 shares of Regency common or
preferred stock. The stockholders approved the merger at a Special
Meeting of Stockholders held February 26, 1999. On February 28, 1999, the
effective date of the merger, the Company issued equity instruments
valued at $770.6 million to the Pacific stockholders in exchange for
their outstanding common and preferred shares and units. The total cost
to acquire Pacific was approximately $1.157 billion based on the value of
Regency shares issued, including the assumption of $379 million of
outstanding debt and other liabilities of Pacific, and closing costs. The
price per share used to determine the purchase price was $23.325 based on
the five day average of the closing stock price of Regency's common stock
on the New York Stock Exchange immediately before, during and after the
date the terms of the merger were agreed to and announced to the public.
The merger was accounted for as a purchase with the Company as the
acquiring entity.
During 1998, the Company acquired 43 shopping centers and joint ventures
for a total investment of $384.3 million ("1998 Acquisitions"). With
respect to these acquisitions, during 1999, the Company paid contingent
consideration valued at $9.0 million consisting of 69,555 Units, 3,768
shares of common stock, and $7.0 million. During 2000, the Company may
pay contingent consideration of up to an estimated $7.5 million, through
the issuance of Units, stock and the payment of cash.
The operating results of Pacific and the 1998 Acquisitions are included
in the Company's consolidated financial statements from the date each
property was acquired. The following unaudited pro forma information
presents the consolidated results of operations as if Pacific and all
1998 Acquisitions had occurred on January 1, 1998. Such pro forma
information reflects adjustments to 1) increase depreciation, interest
expense, and general and administrative costs, 2) remove the office
buildings sold, and 3) adjust the weighted average common shares, and
common equivalent shares outstanding issued to acquire the properties.
Pro forma revenues would have been $324.7 and $289.9 million as of
December 31, 1999 and 1998, respectively. Pro forma net income for common
stockholders would have been $94.1 and $81.0 million as of December 31,
1999 and 1998,
F-12
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
2. Acquisitions of Shopping Centers (continued)
respectively. Pro forma basic net income per share would have been $1.58
and $1.35 as of December 31, 1999 and 1998, respectively. Pro forma
diluted net income per share would have been $1.58 and $1.34, as of
December 31, 1999 and 1998, respectively. This data does not purport to
be indicative of what would have occurred had Pacific and the 1998
Acquisitions been made on January 1, 1998, or of results which may occur
in the future.
3. Segments
The Company was formed, and currently operates, for the purpose of 1)
operating and developing Company owned retail shopping centers (Retail
segment), and 2) providing services including property management,
leasing, brokerage, and construction and development management for
third-parties (Service operations segment). The Company had previously
operated four office buildings that were sold during 1998 and 1997
(Office buildings segment). The Company's reportable segments offer
different products or services and are managed separately because each
requires different strategies and management expertise. There are no
material inter-segment sales or transfers.
The Company assesses and measures operating results starting with Net
Operating Income for the Retail and Office Buildings segments and Income
for the Service operations segment and converts such amounts into a
performance measure referred to as Funds From Operations ("FFO"). The
operating results for the individual retail shopping centers have been
aggregated since all of the Company's shopping centers exhibit highly
similar economic characteristics as neighborhood shopping centers, and
offer similar degrees of risk and opportunities for growth. FFO as
defined by the National Association of Real Estate Investment Trusts
consists of net income (computed in accordance with generally accepted
accounting principles) excluding gains (or losses) from debt
restructuring and sales of income producing property held for investment,
plus depreciation and amortization of real estate, and adjustments for
unconsolidated investments in real estate partnerships and joint
ventures. The Company further adjusts FFO by distributions made to
holders of Units and preferred stock that results in a diluted FFO
amount. The Company considers diluted FFO to be the industry standard for
reporting the operations of real estate investment trusts ("REITs").
Adjustments for investments in real estate partnerships are calculated to
reflect diluted FFO on the same basis. While management believes that
diluted FFO is the most relevant and widely used measure of the Company's
performance, such amount does not represent cash flow from operations as
defined by generally accepted accounting principles, should not be
considered an alternative to net income as an indicator of the Company's
operating performance, and is not indicative of cash available to fund
all cash flow needs. Additionally, the Company's calculation of diluted
FFO, as provided below, may not be comparable to similarly titled
measures of other REITs.
The accounting policies of the segments are the same as those described
in note 1. The revenues, diluted FFO, and assets for each of the
reportable segments are summarized as follows for the years ended as of
December 31, 1999, 1998, and 1997. Non-segment assets to reconcile to
total assets include cash and deferred costs.
F-13
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
3. Segments (continued)
1999 1998 1997
---- ---- ----
Revenues:
Retail segment $ 283,647,445 130,900,785 84,203,386
Service operations segment 18,239,486 11,862,784 8,447,615
Office buildings segment - 532,432 4,684,994
------------ ------------ ------------
Total revenues $ 301,886,931 143,296,001 97,335,995
============ ============ ============
Funds from Operations:
Retail segment net operating income $ 216,189,375 100,239,863 63,056,124
Service operations segment income 18,239,486 11,862,784 8,447,615
Office buildings segment net operating income - 349,161 2,928,125
Adjustments to calculate diluted FFO:
Interest expense (60,067,007) (28,786,431) (19,667,483)
Interest income 2,196,954 1,957,575 1,000,227
Earnings from recurring land sales - 901,853 -
General and administrative (19,746,751) (15,064,148) (9,963,926)
Non-real estate depreciation (1,003,092) (679,740) (406,113)
Minority interest of limited partners (2,855,404) (464,098) (504,947)
Minority interest in depreciation
and amortization (584,048) (526,018) (285,280)
Share of joint venture depreciation
and amortization 987,912 688,686 59,038
Dividends on preferred units (12,368,403) (3,358,333) -
------------ ------------ ------------
Funds from Operations - diluted 140,989,022 67,121,154 44,663,380
------------ ------------ ------------
Reconciliation to net income for common stockholders:
Real estate related depreciation
and amortization (47,608,427) (24,366,261) (15,897,046)
Minority interest in depreciation
and amortization 584,048 526,018 285,280
Share of joint venture depreciation
and amortization (987,912) (688,686) (59,038)
(Loss) gain from property sales (232,989) 9,824,122 450,902
Minority interest of exchangeable
partnership units (2,897,778) (1,826,273) (2,041,823)
------------ ------------ ------------
Net income $ 89,845,964 50,590,074 27,401,655
============ ============ ============
As of December 31
Assets (in thousands): 1999 1998 1997
---------------------- ---- ---- ----
Retail segment $ 2,463,639 1,187,238 763,721
Service operations segment 123,233 20,870 20,173
Office buildings segment - - 19,258
Cash and other assets 68,064 31,999 23,697
--------- --------- -------
Total assets $ 2,654,936 1,240,107 826,849
========= ========= =======
F-14
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
4. Investments in Real Estate Partnerships
The Company accounts for all investments in which it owns less than 50%
and does not have controlling financial interest, using the equity
method. The Company's combined investment in these partnerships was $66.9
and $30.6 million at December 31, 1999 and 1998, respectively. Net income
is allocated to the Company in accordance with the respective partnership
agreement.
5. Notes Payable and Acquisition and Development Line of Credit
The Company's outstanding debt at December 31, 1999 and 1998 consists of
the following (in thousands):
1999 1998
---- ----
Notes Payable:
Fixed rate mortgage loans $ 382,715 298,148
Variable rate mortgage loans 11,376 11,051
Fixed rate unsecured loans 370,696 121,296
--------- -------
Total notes payable 764,787 430,495
Acquisition and development line of credit 247,179 117,631
--------- -------
Total $ 1,011,966 548,126
========= =======
During February, 1999, the Company modified the terms of its unsecured
acquisition and development line of credit (the "Line") by increasing the
commitment to $635 million. This credit agreement also provides for a
competitive bid facility of up to $250 million of the commitment amount.
Maximum availability under the Line is based on the discounted value of a
pool of eligible unencumbered assets (determined on the basis of
capitalized net operating income) less the amount of the Company's
outstanding unsecured liabilities. The Line matures in February 2001, but
may be extended annually for one year periods. Borrowings under the Line
bear interest at a variable rate based on LIBOR plus a specified spread,
(1.00% currently), which is dependent on the Company's investment grade
rating. The Company is required to comply, and is in compliance, with
certain financial and other covenants customary with this type of
unsecured financing. These financial covenants include among others (i)
maintenance of minimum net worth, (ii) ratio of total liabilities to
gross asset value, (iii) ratio of secured indebtedness to gross asset
value, (iv) ratio of EBITDA to interest expense, (v) ratio of EBITDA to
debt service and reserve for replacements, and (vi) ratio of unencumbered
net operating income to interest expense on unsecured indebtedness. The
Line is used primarily to finance the acquisition and development of real
estate, but is also available for general working capital purposes.
Mortgage loans are secured by certain real estate properties, and may be
prepaid subject to a prepayment of a yield-maintenance premium. Mortgage
loans are generally due in monthly installments of interest and principal
and mature over various terms through 2019. Variable interest rates on
mortgage loans are currently based on LIBOR plus a spread in a range of
125 basis points to 150 basis points. Fixed interest rates on mortgage
loans range from 7.04% to 9.8%.
During 1999, the Company assumed debt with a fair value of $402.6 million
related to the acquisition of real estate, which includes debt premiums
of $4.1 million based upon the above market interest rates of the debt
instruments. Debt premiums are being amortized over the terms of the
related debt instruments, as an adjustment to interest expense.
F-15
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
5. Notes Payable and Acquisition and Development Line of Credit (continued)
On April 15, 1999 the Company, through RCLP, completed a $250 million
unsecured debt offering in two tranches. The Company issued $200 million
7.4% notes due April 1, 2004, priced at 99.922% to yield 7.42%, and $50
million 7.75% notes due April 1, 2009, priced at 100%. The net proceeds
of the offering were used to reduce the balance of the Line.
As of December 31, 1999, scheduled principal repayments on notes payable
and the Line were as follows (in thousands):
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
------------ ----------- ----------
2000 $ 5,711 92,942 98,653
2001 8,053 293,027 301,080
2002 4,943 44,091 49,034
2003 4,933 13,299 18,232
2004 5,327 199,866 205,193
Beyond 5 Years 36,883 290,365 327,248
Net unamortized debt premiums - 12,527 12,527
---------- --------- ----------
Total $ 65,850 946,117 1,011,967
========== ========= ==========
Unconsolidated partnerships and joint ventures had mortgage loans payable
of $50.3 million at December 31, 1999, and the Company's proportionate
share of these loans was $21.2 million.
The fair value of the Company's notes payable and Line are estimated
based on the current rates available to the Company for debt of the same
remaining maturities. Variable rate notes payable, and the Company's
Line, are considered to be at fair value since the interest rates on such
instruments reprice based on current market conditions. Notes payable
with fixed rates, that have been assumed in connection with acquisitions,
are recorded in the accompanying financial statements at fair value. The
Company considers the carrying value of all other fixed rate notes
payable to be a reasonable estimation of their fair value based on the
fact that the rates of such notes are similar to rates available to the
Company for debt of the same terms.
6. Stockholders' Equity and Minority Interest
On June 11, 1996, the Company entered into a Stockholders Agreement (the
"Agreement") with SC-USREALTY granting it certain rights such as
purchasing common stock, nominating representatives to the Company's
Board of Directors, and subjecting SC-USREALTY to certain restrictions
including voting and ownership restrictions. In connection with the Units
and shares of common stock issued in March 1998 related to earnout
payments, SC-USREALTY acquired 435,777 shares at $22.125 per share in
accordance with their rights as provided for in the Agreement. In
conjunction with the acquisition of Pacific, SC-USREALTY exchanged their
Pacific shares for 22.6 million Regency common shares.
F-16
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
6. Stockholders' Equity and Minority Interest (continued)
In connection with the acquisition of shopping centers, RCLP has issued
Exchangeable Operating Partnership Units to limited partners convertible
on a one for one basis into shares of common stock of the Company.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred
Units") to an institutional investor in a private placement. The issuance
involved the sale of 1.6 million Series A Preferred Units for $50.00 per
unit. The Series A Preferred Units, which may be called by the
Partnership at par on or after June 25, 2003, have no stated maturity or
mandatory redemption, and pay a cumulative, quarterly dividend at an
annualized rate of 8.125%. At any time after June 25, 2008, the Series A
Preferred Units may be exchanged for shares of 8.125% Series A Cumulative
Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series A Preferred Stock for one Series A Preferred Unit. The
Series A Preferred Units and Series A Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were
used to reduce the Line.
On September 3, 1999, the Company through RCLP issued $85 million of
8.75% Series B Cumulative Redeemable Preferred Units ("Series B Preferred
Units") to an institutional investor in a private placement. The issuance
involved the sale of 850,000 Series B Preferred Units for $100.00 per
unit. The Series B Preferred Units, which may be called by the
Partnership at par on or after September 3, 2004, have no stated maturity
or mandatory redemption, and pay a cumulative, quarterly dividend at an
annualized rate of 8.75%. At any time after September 3, 2009, the Series
B Preferred Units may be exchanged for shares of 8.75% Series B
Cumulative Redeemable Preferred Stock of the Company at an exchange rate
of one share of Series B Preferred Stock for one Series B Preferred Unit.
The Series B Preferred Units and Series B Preferred Stock are not
convertible into common stock of the Company. The net proceeds of the
offering were used to reduce the Line.
On September 3, 1999, the Company through RCLP issued $75 million of 9.0%
Series C Cumulative Redeemable Preferred Units ("Series C Preferred
Units") to an institutional investor in a private placement. The issuance
involved the sale of 750,000 Series C Preferred Units for $100.00 per
unit. The Series C Preferred Units, which may be called by the
Partnership at par on or after September 3, 2004, have no stated maturity
or mandatory redemption, and pay a cumulative, quarterly dividend at an
annualized rate of 9.0%. At any time after September 3, 2009, the Series
C Preferred Units may be exchanged for shares of 9.0% Series C Cumulative
Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series C Preferred Stock for one Series C Preferred Unit. The
Series C Preferred Units and Series C Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were
used to reduce the Line.
On September 29, 1999, the Company through RCLP issued $50 million of
9.125% Series D Cumulative Redeemable Preferred Units ("Series D
Preferred Units") to an institutional investor in a private placement.
The issuance involved the sale of 500,000 Series D Preferred Units for
$100.00 per unit. The Series D Preferred Units, which may be called by
the Partnership at par on or after September 29, 2004, have no stated
maturity or mandatory redemption, and pay a cumulative, quarterly
dividend at an annualized rate of 9.125%. At any time after September 29,
2009, the Series D Preferred Units may be exchanged for shares of 9.125%
Series D Cumulative Redeemable Preferred Stock of the Company at an
exchange rate of one share of Series D Preferred Stock for one Series D
Preferred Unit. The Series D Preferred Units and Series D Preferred Stock
are not convertible into common stock of the Company. The net proceeds of
the offering were used to reduce the Line.
As part of the acquisition of Pacific Retail Trust, the Company issued
Series 1 and Series 2 preferred shares. Series 1 preferred shares are
convertible into Series 2 preferred shares on a one-for-one basis and
contain provisions for adjustment to prevent dilution. The Series 1
preferred shares are entitled to a quarterly dividend in an amount equal
to $0.0271 less than the common dividend and are cumulative. Series 2
preferred shares are convertible into common shares on a one-for-one
basis. The Series 2 preferred shares are entitled to quarterly dividends
in an amount equal to the common dividend and are cumulative. The Company
may redeem the preferred shares any time after October 20, 2010 at a
price of $20.83 per share, plus all accrued but unpaid dividends. During
1999, a holder of Series 2 preferred shares converted their shares into
14,987 shares of common stock.
F-17
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
6. Stockholders' Equity and Minority Interest (continued)
During the fourth quarter, the Board of Directors authorized the
repurchase of up to $65 million of the Company's outstanding shares from
time to time through periodic open market transactions or through
privately negotiated transactions. At December 31, 1999, the Company had
repurchased 2.7 million shares for $54.5 million.
During 1999, the holders of all of Regency's Class B stock converted
2,500,000 shares into 2,975,468 shares of common stock.
7. Earnings Per Share
The following summarizes the calculation of basic and diluted earnings
per share for the years ended, December 31, 1999, 1998 and 1997 (in
thousands except per share data):
1999 1998 1997
---- ---- ----
Basic Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding 53,494 25,150 17,424
======= ======= =======
Net income for common stockholders $ 87,601 50,590 27,402
Less: dividends paid on Class B common stock 1,409 5,378 5,140
------- ------- -------
Net income for Basic EPS $ 86,192 45,212 22,262
======= ======= =======
Basic EPS $ 1.61 1.80 1.28
======= ======= =======
Diluted Earnings Per Share (EPS) Calculation
Weighted average shares outstanding
for Basic EPS 53,494 25,150 17,424
Exchangeable operating partnership units 2,004 1,223 1,243
Incremental shares to be issued under common
stock options using the Treasury method 4 14 80
Contingent units or shares for the acquisition
of real estate - 511 955
------- ------- -------
Total diluted shares 55,502 26,898 19,702
======= ======= =======
Net income for Basic EPS $ 86,192 45,212 22,262
Add: minority interest of exchangeable partnership
units 2,898 1,826 2,042
------- ------- -------
Net income for Diluted EPS $ 89,090 47,038 24,304
======= ======= =======
Diluted EPS $ 1.61 1.75 1.23
======= ======= =======
The Preferred Series 1 and Series 2 stock and the Class B common stock
are not included in the above calculation because their effects are
anti-dilutive.
F-18
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
8. Long-Term Stock Incentive Plans
In 1993, the Company adopted a Long-Term Omnibus Plan (the "Plan")
pursuant to which the Board of Directors may grant stock and stock
options to officers, directors and other key employees. The Plan provides
for the issuance of up to 12% of the Company's common shares outstanding
not to exceed 8.5 million shares. Stock options are granted with an
exercise price equal to the stock's fair market value at the date of
grant. All stock options granted have ten year terms, and become fully
exercisable after four years from the date of grant, with the exception
of options issued to directors prior to 1999 which become fully
exercisable after one year.
At December 31, 1999, there were approximately 2.7 million shares
available for grant under the Plan. The per share weighted-average fair
value of stock options granted during 1999 and 1998 was $1.23 and $2.22
on the date of grant using the Black Scholes option-pricing model with
the following weighted-average assumptions: 1999 - expected dividend
yield 9.2%, risk-free interest rate of 5.7%, expected volatility 21%, and
an expected life of 5.3 years; 1998 - expected dividend yield 7.5%,
risk-free interest rate of 4.8%, expected volatility 21%, and an expected
life of 6.5 years. The Company applies APB Opinion No. 25 in accounting
for its Plan and, accordingly, no compensation cost has been recognized
for its stock options in the consolidated financial statements.
Had the Company determined compensation cost based on the fair value at
the grant date for its stock options under SFAS No. 123, the Company's
net income for common stockholders would have been reduced to the pro
forma amounts indicated below (in thousands except per share data):
Net income for
common stockholders 1999 1998 1997
------------------- ---- ---- ----
As reported: $ 87,601 50,590 27,402
Net income per share:
Basic $ 1.61 1.80 1.28
Diluted $ 1.61 1.75 1.23
Pro forma: $ 85,448 49,565 25,777
Net income per share:
Basic $ 1.57 1.76 1.18
Diluted $ 1.57 1.71 1.15
Stock option activity during the periods indicated is as follows:
Number of Weighted-Average
Shares Exercise Price
Outstanding, December 31, 1996 198,000 $ 19.43
------------- -----------
Granted 1,252,276 25.39
Forfeited (7,000) 23.54
Exercised (124,769) 19.25
------------- -----------
Outstanding, December 31, 1997 1,318,507 25.08
------------- -----------
Granted 741,265 24.39
Forfeited (123,495) 25.33
Exercised (227,700) 24.97
------------- -----------
Outstanding, December 31, 1998 1,708,577 24.71
------------- -----------
Granted 860,767 20.70
Pacific Retail Merger 1,251,719 24.24
Forfeited (87,395) 25.69
Exercised (4,000) 17.88
------------- -----------
Outstanding, December 31, 1999 3,729,668 $ 23.61
============= ===========
F-19
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
8. Long-Term Stock Incentive Plans (continued)
The following table presents information regarding all options
outstanding at December 31, 1999.
Weighted
Average Weighted
Number of Remaining Range of Average
Options Contractual Exercise Exercise
Outstanding Life Prices Price
--------------- --------------- --------------- -------------
423,220 9.31 $ 16.75 - 19.81 $ 19.73
1,388,098 8.68 20.83 - 22.94 21.86
1,918,350 7.42 25.00 - 27.69 25.73
--------- --------- ------------------ ------------
3,729,668 8.10 $ 16.75 - 27.69 $ 23.61
========= ========= ================== =============
The following table presents information regarding options currently
exercisable at December 31, 1999:
Weighted
Number of Range of Average
Options Exercise Exercise
Exercisable Prices Price
------------ ------------------ --------------
45,731 $ 16.75 - 19.25 $ 19.01
15,899 22.25 - 25.00 23.34
88,681 26.25 - 27.75 26.98
------- ------------------ --------------
150,311 $ 16.75 - 27.75 $ 24.17
======= ================== ==============
Also as part of the Plan, certain officers and employees have received
loans to purchase stock at market rates of interest, have been granted
restricted stock, and have been granted dividend equivalents. During
1999, 1998 and 1997, the Company charged $1,030,645, $1,322,164 and
$1,115,906, respectively, to income on the consolidated statement of
operations related to the Plan.
9. Operating Leases
The Company's properties are leased to tenants under operating leases
with expiration dates extending to the year 2032. Future minimum rents
under noncancelable operating leases as of December 31,1999, excluding
tenant reimbursements of operating expenses and excluding additional
contingent rentals based on tenants' sales volume are as follows:
Year ending December 31, Amount
----------------------- -------------
2000 $ 225,984,790
2001 211,915,900
2002 187,844,994
2003 164,674,498
2004 136,173,121
Thereafter 943,744,557
---------------
Total $ 1,870,337,860
===============
The shopping centers' tenant base includes primarily national and
regional supermarkets, drug stores, discount department stores and other
retailers and, consequently, the credit risk is concentrated in the
retail industry. There were no tenants which individually represented 10%
or more of the Company's combined minimum rent.
F-20
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
10. Contingencies
The Company like others in the commercial real estate industry, is
subject to numerous environmental laws and regulations and the operation
of dry cleaning plants at the Company's shopping centers is the principal
environmental concern. The Company believes that the dry cleaners are
operating in accordance with current laws and regulations and has
established procedures to monitor their operations. While the Company has
registered the plants located in Florida under a state funded program
designed to substantially fund the clean up, if necessary, of any
environmental issues, the owner or operator is not relieved from the
ultimate responsibility for clean up. The Company also has established
due diligence procedures to identify and evaluate potential environmental
issues on properties under consideration for acquisition. In connection
with acquisitions during 1999 and 1998, the Company has established
environmental reserves which amounted to $2.6 million and $2.2 million at
December 31, 1999 and 1998, respectively. While it is not possible to
predict with certainty, management believes that the reserves are
adequate to cover future clean-up costs related to these sites. The
Company's policy is to accrue environmental clean-up costs when it is
probable that a liability has been incurred and that amount is reasonably
estimable. Based on information presently available, no additional
environmental accruals were made and management believes that the
ultimate disposition of currently known matters will not have a material
effect on the financial position, liquidity, or operations of the
Company.
11. Market and Dividend Information (Unaudited)
The Company's common stock is traded on the New York Stock Exchange
("NYSE") under the symbol "REG". The Company currently has approximately
3,500 shareholders. The following table sets forth the high and low
prices and the cash dividends declared on the Company's common stock by
quarter for 1999 and 1998:
1999 1998
----------------------------------- ---------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
------- ------ ---------- ------ ------- ----------
March 31 $ 23.125 18.750 .46 27.812 24.750 .44
June 30 22.500 19.000 .46 26.687 24.062 .44
September 30 22.125 19.875 .46 26.500 20.500 .44
December 31 20.813 18.750 .46 23.437 20.250 .44
F-21
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
12. Summary of Quarterly Financial Data (Unaudited)
Presented below is a summary of the consolidated quarterly financial data
for the years ended December 31, 1999 and 1998 (amounts in thousands,
except per share data):
First Second Third Fourth
Quarter Quarter Quarter Quarter
--------- -------- --------- ---------
1999:
Revenues $ 51,422 79,664 79,598 91,203
Net income for
common stockholders 13,456 24,330 23,965 25,850
Net income per share:
Basic .34 .41 .40 .44
Diluted .34 .41 .40 .44
1998:
Revenues $ 30,909 35,187 37,199 40,001
Net income for
common stockholders 19,556 10,798 10,061 10,175
Net income per share:
Basic .74 .38 .34 .35
Diluted .72 .36 .34 .34
F-22
Independent Auditors' Report
On Financial Statement Schedule
The Shareholders and Board of Directors
Regency Realty Corporation
Under date of January 26, 2000, we reported on the consolidated balance sheets
of Regency Realty Corporation as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1999, as contained
in the annual report on Form 10-K for the year 1999. In connection with our
audits of the aforementioned consolidated financial statements, we also audited
the related financial statement schedule as listed in the accompanying index on
page F-1 of the annual report on Form 10-K for the year 1999. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits.
In our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
KPMG LLP
Jacksonville, Florida
January 26, 2000
S-1
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III
Initial Cost Cost Capitalized Total Cost
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
--------- ------------ ---------------- --------- ------------ ----------
ANASTASIA SHOPPING PLAZA 1,072,451 3,617,493 176,624 1,072,451 3,794,117 4,866,568
ARAPAHO VILLAGE 837,148 8,031,688 -- 837,148 8,031,688 8,868,836
ARDEN SQUARE 3,140,000 7,420,438 -- 3,140,000 7,420,438 10,560,438
ASHFORD PLACE 2,803,998 9,163,994 345,480 2,583,998 9,729,474 12,313,472
AVENTURA SHOPPING CENTER 2,751,094 9,317,790 277,419 2,751,094 9,595,209 12,346,303
BECKETT COMMONS 1,625,242 5,844,871 269,559 1,625,242 6,114,430 7,739,672
BENEVA 2,483,547 8,851,199 293,537 2,483,547 9,144,736 11,628,283
BENT TREE PLAZA 1,927,712 6,659,082 -- 1,927,712 6,659,082 8,586,794
BERKSHIRE COMMONS 2,294,960 8,151,236 88,422 2,294,960 8,239,658 10,534,618
BLOOMINGDALE 3,861,759 14,100,891 235,565 3,861,759 14,336,456 18,198,215
BLOSSOM VALLEY 7,803,568 10,320,913 -- 7,803,568 10,320,913 18,124,481
BOLTON PLAZA 2,660,227 6,209,110 1,435,951 2,634,664 7,670,624 10,305,288
BONNERS POINT 859,854 2,878,641 189,356 859,854 3,067,997 3,927,851
BOULEVARD CENTER 3,659,040 9,658,227 -- 3,659,040 9,658,227 13,317,267
BOYNTON LAKES PLAZA 2,783,000 10,043,027 43,649 2,783,000 10,086,676 12,869,676
BRAELINN VILLAGE EQUIPORT 4,191,214 12,389,585 883,677 4,191,214 13,273,262 17,464,476
BRIARCLIFF LA VISTA 694,120 2,462,819 583,747 694,120 3,046,566 3,740,686
BRIARCLIFF VILLAGE 4,597,018 16,303,813 1,476,227 4,597,018 17,780,040 22,377,058
BRISTOL WARNER 5,000,000 11,997,016 -- 5,000,000 11,997,016 16,997,016
BROOKVILLE PLAZA 1,208,012 4,205,994 186,518 1,208,012 4,392,512 5,600,524
BUCKHEAD COURT 1,737,569 6,162,941 1,515,521 1,627,569 7,788,462 9,416,031
BUCKLEY SQUARE 2,970,000 5,126,240 -- 2,970,000 5,126,240 8,096,240
CAMBRIDGE SQUARE 792,000 2,916,034 309,747 792,000 3,225,781 4,017,781
CARMEL COMMONS 2,466,200 8,903,187 1,659,743 2,466,200 10,562,930 13,029,130
CARRIAGE GATE 740,960 2,494,750 1,232,323 740,960 3,727,073 4,468,033
CASA LINDA PLAZA 4,515,000 30,809,330 -- 4,515,000 30,809,330 35,324,330
CASCADE PLAZA 3,023,165 10,694,460 -- 3,023,165 10,694,460 13,717,625
CENTER OF SEVEN SPRINGS 1,737,994 6,290,048 1,781,068 1,757,440 8,051,670 9,809,110
CHAMPIONS FOREST 2,665,875 8,678,603 -- 2,665,875 8,678,603 11,344,478
CHASEWOOD PLAZA 1,675,000 11,390,727 5,844,360 2,476,486 16,433,601 18,910,087
CHERRY GROVE 3,533,146 12,710,297 497,290 3,533,146 13,207,587 16,740,733
CHERRY PARK MARKET 2,400,000 16,162,934 -- 2,400,000 16,162,934 18,562,934
CITY VIEW SHOPPING CENTER 1,207,204 4,341,304 53,659 1,207,204 4,394,963 5,602,167
COLUMBIA MARKETPLACE 1,280,158 4,285,745 193,291 1,280,158 4,479,036 5,759,194
COOPER STREET 2,078,891 10,682,189 -- 2,078,891 10,682,189 12,761,080
COSTA VERDE 12,740,000 25,261,188 -- 12,740,000 25,261,188 38,001,188
COUNTRY CLUB 1,105,201 3,709,452 150,765 1,105,201 3,860,217 4,965,418
COUNTRY CLUB CALIF 3,000,000 11,657,200 -- 3,000,000 11,657,200 14,657,200
COURTYARD SHOPPING CENTER 1,761,567 4,187,039 843,408 1,761,567 5,030,447 6,792,014
CROMWELL SQUARE 1,771,892 6,285,288 263,146 1,771,892 6,548,434 8,320,326
CROSSROADS 3,513,903 2,595,055 -- 3,513,903 2,595,055 6,108,958
CUMMING 400 2,374,562 8,420,776 476,617 2,374,562 8,897,393 11,271,955
DELK SPECTRUM 2,984,577 11,048,896 20,949 2,984,577 11,069,845 14,054,422
DIABLO PLAZA 5,300,000 7,535,866 -- 5,300,000 7,535,866 12,835,866
DUNWOODY HALL 1,819,209 6,450,922 983,126 1,819,209 7,434,048 9,253,257
DUNWOODY VILLAGE 2,326,063 7,216,045 2,129,971 2,326,063 9,346,016 11,672,079
EAST POINTE 1,868,120 6,742,983 37,375 1,868,120 6,780,358 8,648,478
EAST PORT PLAZA 3,257,023 11,611,363 283,522 3,257,023 11,894,885 15,151,908
EL CAMINO 7,600,000 10,852,428 -- 7,600,000 10,852,428 18,452,428
EL NORTE PARKWAY PLA 2,833,510 6,332,078 -- 2,833,510 6,332,078 9,165,588
ENCINA GRANDE 5,040,000 10,378,539 -- 5,040,000 10,378,539 15,418,539
ENSLEY SQUARE 915,493 3,120,928 436,060 915,493 3,556,988 4,472,481
EVANS CROSSING 1,468,743 5,123,617 171,720 1,634,997 5,129,083 6,764,080
FLEMING ISLAND 3,076,701 6,291,505 31,752 3,076,701 6,323,257 9,399,958
FRANKLIN SQUARE 2,584,025 9,379,749 478,328 2,584,025 9,858,077 12,442,102
FRIARS MISSION 6,660,000 27,276,992 -- 6,660,000 27,276,992 33,936,992
GARDEN SQUARE 2,073,500 7,614,748 425,298 2,136,135 7,977,411 10,113,546
GARNER FESTIVAL 5,591,099 19,897,197 864,979 5,591,099 20,762,176 26,353,275
GLENWOOD VILLAGE 1,194,198 4,235,476 227,955 1,194,198 4,463,431 5,657,629
HAMILTON MEADOWS 2,034,566 6,582,429 3,380 2,034,566 6,585,809 8,620,375
HAMPSTEAD VILLAGE 2,769,901 5,152,103 -- 2,769,901 5,152,103 7,922,004
HANCOCK 8,231,581 24,248,620 -- 8,231,581 24,248,620 32,480,201
HARPETH VILLAGE FIELDSTONE 2,283,874 5,559,498 3,537,926 2,283,874 9,097,424 11,381,298
HARWOOD HILLS VILLAGE 2,852,704 9,192,614 -- 2,852,704 9,192,614 12,045,318
HERITAGE LAND 12,390,000 -- -- 12,390,000 -- 12,390,000
HERITAGE PLAZA -- 23,675,957 -- -- 23,675,957 23,675,957
HIGHLAND SQUARE 2,615,250 9,359,722 4,964,243 2,615,250 14,323,965 16,939,215
HILLCREST VILLAGE 1,600,000 1,797,686 -- 1,600,000 1,797,686 3,397,686
HINSDALE LAKE COMMONS 4,217,840 15,039,854 71,706 4,217,840 15,111,560 19,329,400
HYDE PARK 9,240,000 33,340,181 2,744,895 9,735,102 35,589,974 45,325,076
INGLEWOOD PLAZA 1,300,000 1,862,406 -- 1,300,000 1,862,406 3,162,406
JAMES CENTER 2,706,000 9,451,497 -- 2,706,000 9,451,497 12,157,497
KERNERSVILLE PLAZA 1,741,562 6,081,020 268,646 1,741,562 6,349,666 8,091,228
KINGSDALE SHOPPING CENTER 3,866,500 14,019,614 1,165,620 3,866,500 15,185,234 19,051,734
LAGRANGE MARKETPLACE 983,923 3,294,003 100,669 983,923 3,394,672 4,378,595
LAKE MERIDIAN 6,510,000 12,121,889 -- 6,510,000 12,121,889 18,631,889
S-2
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Initial Cost Cost Capitalized Total Cost
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
--------- ------------ ---------------- --------- ------------ ----------
LAKE PINE PLAZA 2,008,110 6,908,986 309,124 2,008,110 7,218,110 9,226,220
LAKESHORE 1,617,940 5,371,499 11,789 1,617,940 5,383,288 7,001,228
LEETSDALE MARKETPLACE 3,420,000 9,933,701 -- 3,420,000 9,933,701 13,353,701
LITTLETON SQUARE 2,030,000 8,254,964 -- 2,030,000 8,254,964 10,284,964
LOEHMANNS PLAZA 3,981,525 14,117,891 758,111 3,981,525 14,876,002 18,857,527
LOEHMANNS PLAZA CALIFORNIA 5,420,000 8,679,135 -- 5,420,000 8,679,135 14,099,135
LOVEJOY STATION 1,540,000 5,581,468 5,754 1,540,000 5,587,222 7,127,222
LUCEDALE MARKETPLACE 641,565 2,147,848 98,306 641,565 2,246,154 2,887,719
MAINSTREET SQUARE 1,274,027 4,491,897 47,467 1,274,027 4,539,364 5,813,391
MARINERS VILLAGE 1,628,000 5,907,835 136,797 1,628,000 6,044,632 7,672,632
MARKET AT PRESTON FOREST 4,400,000 10,752,712 -- 4,400,000 10,752,712 15,152,712
MARKET AT ROUND ROCK 2,000,000 9,676,170 -- 2,000,000 9,676,170 11,676,170
MARKETPLACE ST PETE 1,287,000 4,662,740 283,120 1,287,000 4,945,860 6,232,860
MARTIN DOWNS VILLAGE CENTER 2,000,000 5,133,495 3,134,394 2,437,664 7,830,225 10,267,889
MARTIN DOWNS VILLAGE SHOPPES 700,000 1,207,861 2,901,488 817,135 3,992,214 4,809,349
MAXTOWN ROAD (NORTHGATE) 1,753,136 6,244,449 28,947 1,753,136 6,273,396 8,026,532
MAYNARD CROSSING 4,066,381 14,083,800 616,760 4,066,381 14,700,560 18,766,941
MEMORIAL BEND SHOPPING CENTER 3,256,181 11,546,660 2,121,856 3,366,181 13,558,516 16,924,697
MERCHANTS VILLAGE 1,054,306 3,162,919 3,399,315 1,054,306 6,562,234 7,616,540
MILLHOPPER 1,073,390 3,593,523 957,748 1,073,390 4,551,271 5,624,661
MILLS POINTE 2,000,000 11,919,176 -- 2,000,000 11,919,176 13,919,176
MOCKINGBIRD COMMON 3,000,000 9,675,600 -- 3,000,000 9,675,600 12,675,600
MORNINGSIDE PLAZA 4,300,000 13,119,929 -- 4,300,000 13,119,929 17,419,929
MURRAYHILL MARKETPLACE 2,600,000 15,753,034 -- 2,600,000 15,753,034 18,353,034
NASHBORO 1,824,320 7,167,679 145,528 1,824,320 7,313,207 9,137,527
NEWBERRY SQUARE 2,341,460 8,466,651 868,040 2,341,460 9,334,691 11,676,151
NEWLAND CENTER 12,500,000 12,221,279 -- 12,500,000 12,221,279 24,721,279
NORTH HILLS 4,900,000 18,972,202 -- 4,900,000 18,972,202 23,872,202
NORTH MIAMI SHOPPING CENTER 603,750 2,021,250 94,045 603,750 2,115,295 2,719,045
NORTHVIEW PLAZA 1,956,961 8,694,879 -- 1,956,961 8,694,879 10,651,840
OAKBROOK PLAZA 4,000,000 6,365,704 -- 4,000,000 6,365,704 10,365,704
OAKLEY PLAZA 1,772,540 6,406,975 78,014 1,772,540 6,484,989 8,257,529
OCEAN BREEZE 1,250,000 3,341,199 2,491,222 1,527,400 5,555,021 7,082,421
OLD ST AUGUSTINE PLAZA 2,047,151 7,355,162 295,861 2,047,151 7,651,023 9,698,174
ORCHARD SQUARE 1,155,000 4,135,353 284,028 1,155,000 4,419,381 5,574,381
PACES FERRY PLAZA 2,811,522 9,967,557 2,047,867 2,811,622 12,015,324 14,826,946
PALM HARBOUR SHOPPING VILLAGE 2,899,928 10,998,230 1,264,129 2,899,928 12,262,359 15,162,287
PALM TRAILS PLAZA 2,438,996 5,818,523 47,362 2,438,996 5,865,885 8,304,881
PARK PLACE 2,231,745 7,974,362 8,795 2,231,745 7,983,157 10,214,902
PARKWAY STATION 1,123,200 4,283,917 216,003 1,123,200 4,499,920 5,623,120
PASEO VILLAGE 2,550,000 7,780,102 -- 2,550,000 7,780,102 10,330,102
PEACHLAND PROMENADE 1,284,562 5,143,564 93,215 1,284,561 5,236,780 6,521,341
PEARTREE VILLAGE 5,196,653 8,732,711 10,768,493 5,196,653 19,501,204 24,697,857
PIKE CREEK 5,077,406 18,860,183 398,631 5,077,406 19,258,814 24,336,220
PIMA CROSSING 5,800,000 24,891,690 -- 5,800,000 24,891,690 30,691,690
PINE LAKE VILLAGE 6,300,000 10,522,041 -- 6,300,000 10,522,041 16,822,041
PINE TREE PLAZA 539,000 1,995,927 3,310,606 539,000 5,306,533 5,845,533
PLAZA DE HACIENDA 4,230,000 11,741,933 -- 4,230,000 11,741,933 15,971,933
PLAZA HERMOSA 4,200,000 9,369,630 -- 4,200,000 9,369,630 13,569,630
POWERS FERRY 1,190,822 4,223,606 243,073 1,190,822 4,466,679 5,657,501
POWERS FERRY SQUARE 3,607,647 12,790,749 3,901,785 3,607,647 16,692,534 20,300,181
PRESTON PARK 6,400,000 46,896,071 -- 6,400,000 46,896,071 53,296,071
QUEENSBOROUGH 1,826,000 6,501,056 (833,622)(*) 1,163,021 6,330,413 7,493,434
REGENCY COURT 3,571,337 12,664,014 1,032,708 3,571,337 13,696,722 17,268,059
REGENCY SQUARE BRANDON 577,975 18,156,719 7,850,159 4,491,461 22,093,392 26,584,853
RIDGLEA PLAZA 1,675,498 12,912,138 -- 1,675,498 12,912,138 14,587,636
RIVERMONT STATION 2,887,213 10,445,109 87,952 2,887,213 10,533,061 13,420,274
RONA PLAZA 1,500,000 4,356,480 -- 1,500,000 4,356,480 5,856,480
ROSWELL VILLAGE 2,304,345 6,777,200 5,729,925 2,304,345 12,507,125 14,811,470
RUSSELL RIDGE 2,153,214 -- 6,574,954 2,215,341 6,512,827 8,728,168
SAMMAMISH HIGHLAND 9,300,000 7,553,288 -- 9,300,000 7,553,288 16,853,288
SAN LEANDRO 1,300,000 7,891,091 -- 1,300,000 7,891,091 9,191,091
SANDY PLAINS VILLAGE 2,906,640 10,412,440 1,555,213 2,906,640 11,967,653 14,874,293
SANDY SPRINGS VILLAGE 733,126 2,565,411 1,013,964 733,126 3,579,375 4,312,501
SANTA ANA DOWTOWN 4,240,000 7,319,468 -- 4,240,000 7,319,468 11,559,468
SEQUOIA STATION 9,100,000 17,899,819 -- 9,100,000 17,899,819 26,999,819
SHERWOOD MARKET CENTER 3,475,000 15,897,972 -- 3,475,000 15,897,972 19,372,972
SHOPPES @ 104 2,651,000 9,523,429 440,325 2,651,000 9,963,754 12,614,754
SHOPPES AT MASON 1,576,656 5,357,855 -- 1,576,656 5,357,855 6,934,511
SILVERLAKE 2,004,860 7,161,869 21,690 2,004,860 7,183,559 9,188,419
SOUTH MONROE 1,200,000 6,566,974 (1,351,812)(*) 874,999 5,540,163 6,415,162
SOUTH POINT PLAZA 5,000,000 10,085,995 -- 5,000,000 10,085,995 15,085,995
<FN>
(*) Includes land parcels sold during 1999.
</FN>
S-3
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Initial Cost Cost Capitalized Total Cost
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
--------- ------------ ---------------- --------- ------------ ----------
SOUTH POINTE CROSSING 4,399,303 11,116,491 247,094 4,399,303 11,363,585 15,762,888
SOUTHCENTER 1,300,000 12,250,504 -- 1,300,000 12,250,504 13,550,504
SOUTHPARK 3,077,667 9,399,976 -- 3,077,667 9,399,976 12,477,643
ST ANN SQUARE 1,541,883 5,597,282 5,663 1,541,883 5,602,945 7,144,828
STATLER SQUARE 2,227,819 7,479,952 402,540 2,227,819 7,882,492 10,110,311
STRAWFLOWER VILLAGE 4,060,228 7,232,936 -- 4,060,228 7,232,936 11,293,164
SUNNYSIDE 205 1,200,000 8,703,281 -- 1,200,000 8,703,281 9,903,281
TAMIAMI TRAILS 2,046,286 7,463,336 169,041 2,046,286 7,632,377 9,678,663
TASSAJARA CROSSING 8,560,000 14,899,929 -- 8,560,000 14,899,929 23,459,929
TEQUESTA SHOPPES 1,782,000 6,426,042 245,223 1,782,000 6,671,265 8,453,265
TERRACE WALK 1,196,286 2,935,683 123,782 1,196,286 3,059,465 4,255,751
THE MARKETPLACE 1,211,605 4,056,242 2,875,421 1,758,434 6,384,834 8,143,268
THE PROMENADE 2,526,480 12,712,811 -- 2,526,480 12,712,811 15,239,291
THE VILLAGE 522,313 6,984,992 -- 522,313 6,984,992 7,507,305
THOMAS LAKE 6,000,000 10,301,811 -- 6,000,000 10,301,811 16,301,811
TOWN CENTER AT MARTIN DOWNS 1,364,000 4,985,410 35,225 1,364,000 5,020,635 6,384,635
TOWN SQUARE 438,302 1,555,481 1,593,834 768,302 2,819,315 3,587,617
TROWBRIDGE CROSSING EQUIPORT 910,263 1,914,551 1,162,927 910,263 3,077,478 3,987,741
TWIN PEAKS 5,200,000 25,119,758 -- 5,200,000 25,119,758 30,319,758
UNION SQUARE SHOPPING CENTER 1,578,654 5,933,889 425,198 1,578,656 6,359,085 7,937,741
UNIVERSITY COLLECTION 2,530,000 8,971,597 149,697 2,530,000 9,121,294 11,651,294
UNIVERSITY MARKETPLACE 3,250,562 7,056,855 2,518,819 3,532,046 9,294,190 12,826,236
VALLEY RANCH CENTRE 3,021,181 10,727,623 -- 3,021,181 10,727,623 13,748,804
VENTURA VILLAGE 4,300,000 6,351,012 -- 4,300,000 6,351,012 10,651,012
VILLAGE CENTER 6 3,885,444 10,799,316 441,127 3,885,444 11,240,443 15,125,887
VILLAGE IN TRUSSVILLE 973,954 3,260,627 110,895 973,954 3,371,522 4,345,476
WALKER CENTER 3,840,000 6,417,522 -- 3,840,000 6,417,522 10,257,522
WATERFORD TOWNE CENTER 5,650,058 5,514,671 -- 5,650,058 5,514,671 11,164,729
WELLEBY 1,496,000 5,371,636 1,656,583 1,496,000 7,028,219 8,524,219
WELLINGTON MARKET PLACE 5,070,384 13,308,972 352,814 5,070,384 13,661,786 18,732,170
WELLINGTON TOWN SQUARE 1,914,000 7,197,934 691,879 1,914,000 7,889,813 9,803,813
WEST COUNTY 1,491,462 4,993,155 126,744 1,491,462 5,119,899 6,611,361
WEST HILLS 2,200,000 6,045,233 -- 2,200,000 6,045,233 8,245,233
WEST PARK PLAZA 5,840,225 4,991,746 -- 5,840,225 4,991,746 10,831,971
WESTCHESTER PLAZA 1,857,048 6,456,178 284,131 1,857,048 6,740,309 8,597,357
WESTLAKE VILLAGE CENTER -- 32,786,739 -- -- 32,786,739 32,786,739
WINDMILLER PLAZA PHASE I 2,620,355 11,190,526 468,768 2,620,355 11,659,294 14,279,649
WOODCROFT SHOPPING CENTER 1,419,000 5,211,981 388,944 1,419,000 5,600,925 7,019,925
WOODMAN VAN NUYS 5,500,000 6,835,246 -- 5,500,000 6,835,246 12,335,246
WOODSIDE CENTRAL 3,500,000 8,845,697 -- 3,500,000 8,845,697 12,345,697
WORTHINGTON PARK CENTRE 3,346,203 10,053,858 482,503 3,346,203 10,536,361 13,882,564
----------- ------------- ----------- ----------- ------------- -------------
561,396,266 1,722,634,268 117,922,770 567,673,872 1,834,279,432 2,401,953,304
=========== ============= =========== =========== ============= =============
S-4
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
------------ ------------ ---------
ANASTASIA SHOPPING PLAZA 703,411 4,163,157 --
ARAPAHO VILLAGE 167,115 8,701,721 --
ARDEN SQUARE 154,340 10,406,098 --
ASHFORD PLACE 919,895 11,393,577 4,550,587
AVENTURA SHOPPING CENTER 2,590,758 9,755,545 8,470,790
BECKETT COMMONS 290,832 7,448,840 --
BENEVA 234,349 11,393,934 --
BENT TREE PLAZA 333,929 8,252,865 5,524,586
BERKSHIRE COMMONS 1,293,958 9,240,660 --
BLOOMINGDALE 689,773 17,508,442 --
BLOSSOM VALLEY 214,502 17,909,979 --
BOLTON PLAZA 1,164,968 9,140,320 --
BONNERS POINT 640,470 3,287,381 1,613,000
BOULEVARD CENTER 200,691 13,116,576 --
BOYNTON LAKES PLAZA 503,861 12,365,815 --
BRAELINN VILLAGE EQUIPORT 1,169,840 16,294,636 12,218,290
BRIARCLIFF LA VISTA 228,379 3,512,307 1,630,511
BRIARCLIFF VILLAGE 1,531,761 20,845,297 13,113,636
BRISTOL WARNER 254,072 16,742,944 --
BROOKVILLE PLAZA 232,409 5,368,115 --
BUCKHEAD COURT 640,706 8,775,325 --
BUCKLEY SQUARE 114,662 7,981,578 --
CAMBRIDGE SQUARE 231,738 3,786,043 --
CARMEL COMMONS 724,774 12,304,356 --
CARRIAGE GATE 929,813 3,538,220 2,266,757
CASA LINDA PLAZA 646,494 34,677,836 --
CASCADE PLAZA 89,111 13,628,514 --
CENTER OF SEVEN SPRINGS 1,365,365 8,443,745 --
CHAMPIONS FOREST 180,533 11,163,945 --
CHASEWOOD PLAZA 3,164,413 15,745,674 8,000,000
CHERRY GROVE 608,392 16,132,341 --
CHERRY PARK MARKET 336,746 18,226,188 --
CITY VIEW SHOPPING CENTER 387,717 5,214,450 --
COLUMBIA MARKETPLACE 816,828 4,942,366 2,586,000
COOPER STREET 222,192 12,538,888 --
COSTA VERDE 524,233 37,476,955 --
COUNTRY CLUB 676,689 4,288,729 2,264,000
COUNTRY CLUB CALIF 243,184 14,414,016 --
COURTYARD SHOPPING CENTER 1,384,366 5,407,648 1,378,000
CROMWELL SQUARE 582,640 7,737,686 4,411,629
CROSSROADS 53,918 6,055,040 --
CUMMING 400 785,766 10,486,189 6,349,087
DELK SPECTRUM 588,826 13,465,596 --
DIABLO PLAZA 156,691 12,679,175 --
DUNWOODY HALL 612,852 8,640,405 --
DUNWOODY VILLAGE 768,329 10,903,750 7,144,500
EAST POINTE 328,701 8,319,777 5,173,921
EAST PORT PLAZA 840,051 14,311,857 --
EL CAMINO 226,355 18,226,073 --
EL NORTE PARKWAY PLA 131,548 9,034,040 --
ENCINA GRANDE 215,852 15,202,687 --
ENSLEY SQUARE 326,996 4,145,485 --
EVANS CROSSING 268,899 6,495,181 4,277,340
FLEMING ISLAND 237,072 9,162,886 3,404,648
FRANKLIN SQUARE 517,497 11,924,605 8,989,157
FRIARS MISSION 564,821 33,372,171 17,686,329
GARDEN SQUARE 447,836 9,665,710 6,403,488
GARNER FESTIVAL 626,736 25,726,539 --
GLENWOOD VILLAGE 402,574 5,255,055 2,127,621
HAMILTON MEADOWS 385,108 8,235,267 5,528,516
HAMPSTEAD VILLAGE 20,684 7,901,320 2,431,616
HANCOCK 497,293 31,982,908 --
HARPETH VILLAGE FIELDSTONE 446,475 10,934,823 --
HARWOOD HILLS VILLAGE 187,491 11,857,827 --
HERITAGE LAND -- 12,390,000 --
HERITAGE PLAZA 508,580 23,167,377 --
HIGHLAND SQUARE 386,415 16,552,800 3,835,315
HILLCREST VILLAGE 37,464 3,360,222 --
HINSDALE LAKE COMMONS 411,905 18,917,495 --
HYDE PARK 2,306,602 43,018,474 24,750,000
INGLEWOOD PLAZA 38,648 3,123,758 --
JAMES CENTER 177,930 11,979,567 5,787,944
KERNERSVILLE PLAZA 281,973 7,809,255 5,146,742
KINGSDALE SHOPPING CENTER 838,852 18,212,882 --
LAGRANGE MARKETPLACE 612,680 3,765,915 1,645,000
LAKE MERIDIAN 253,379 18,378,510 --
S-5
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
------------ ------------ ---------
LAKE PINE PLAZA 324,461 8,901,759 5,888,137
LAKESHORE 256,291 6,744,937 3,668,020
LEETSDALE MARKETPLACE 210,546 13,143,155 --
LITTLETON SQUARE 171,608 10,113,356 --
LOEHMANNS PLAZA 1,316,391 17,541,136 --
LOEHMANNS PLAZA CALIFORNIA 182,289 13,916,846 --
LOVEJOY STATION 349,967 6,777,255 --
LUCEDALE MARKETPLACE 415,786 2,471,933 1,390,000
MAINSTREET SQUARE 322,753 5,490,638 --
MARINERS VILLAGE 438,189 7,234,443 --
MARKET AT PRESTON FOREST 223,653 14,929,059 --
MARKET AT ROUND ROCK 202,961 11,473,209 7,298,779
MARKETPLACE ST PETE 511,093 5,721,767 --
MARTIN DOWNS VILLAGE CENTER 1,549,336 8,718,553 4,150,000
MARTIN DOWNS VILLAGE SHOPPES 446,248 4,363,101 1,313,000
MAXTOWN ROAD (NORTHGATE) 273,865 7,752,667 5,339,003
MAYNARD CROSSING 653,322 18,113,619 11,550,269
MEMORIAL BEND SHOPPING CENTER 1,179,660 15,745,037 8,089,362
MERCHANTS VILLAGE 374,103 7,242,437 --
MILLHOPPER 1,141,519 4,483,142 2,401,000
MILLS POINTE 254,094 13,665,082 5,741,898
MOCKINGBIRD COMMON 202,283 12,473,317 --
MORNINGSIDE PLAZA 277,236 17,142,693 --
MURRAYHILL MARKETPLACE 332,855 18,020,179 8,209,237
NASHBORO 159,122 8,978,405 --
NEWBERRY SQUARE 1,667,918 10,008,233 6,346,921
NEWLAND CENTER 265,001 24,456,278 --
NORTH HILLS 394,792 23,477,410 8,688,589
NORTH MIAMI SHOPPING CENTER 725,877 1,993,168 1,160,000
NORTHVIEW PLAZA 180,899 10,470,941 --
OAKBROOK PLAZA 137,140 10,228,564 --
OAKLEY PLAZA 455,637 7,801,892 --
OCEAN BREEZE 1,114,671 5,967,750 2,805,000
OLD ST AUGUSTINE PLAZA 684,282 9,013,892 --
ORCHARD SQUARE 475,492 5,098,889 --
PACES FERRY PLAZA 1,013,894 13,813,052 --
PALM HARBOUR SHOPPING VILLAGE 1,030,852 14,131,435 --
PALM TRAILS PLAZA 237,875 8,067,006 --
PARK PLACE 233,562 9,981,340 --
PARKWAY STATION 437,015 5,186,105 --
PASEO VILLAGE 162,823 10,167,279 4,081,445
PEACHLAND PROMENADE 724,060 5,797,281 4,095,518
PEARTREE VILLAGE 1,208,491 23,489,366 12,613,011
PIKE CREEK 715,709 23,620,511 12,237,467
PIMA CROSSING 521,129 30,170,561 --
PINE LAKE VILLAGE 218,507 16,603,534 --
PINE TREE PLAZA 152,747 5,692,786 --
PLAZA DE HACIENDA 243,335 15,728,598 6,604,058
PLAZA HERMOSA 194,980 13,374,650 --
POWERS FERRY 379,832 5,277,669 2,885,949
POWERS FERRY SQUARE 1,328,284 18,971,897 --
PRESTON PARK 984,572 52,311,499 24,478,620
QUEENSBOROUGH 176,070 7,317,364 --
REGENCY COURT 1,156,685 16,111,374 --
REGENCY SQUARE BRANDON 6,778,241 19,806,612 12,000,000
RIDGLEA PLAZA 273,345 14,314,291 --
RIVERMONT STATION 665,282 12,754,992 --
RONA PLAZA 90,620 5,765,860 --
ROSWELL VILLAGE 622,605 14,188,865 --
RUSSELL RIDGE 823,061 7,905,107 6,124,639
SAMMAMISH HIGHLAND 157,091 16,696,197 --
SAN LEANDRO 166,369 9,024,722 --
SANDY PLAINS VILLAGE 955,297 13,918,996 --
SANDY SPRINGS VILLAGE 248,139 4,064,362 --
SANTA ANA DOWTOWN 153,685 11,405,783 --
SEQUOIA STATION 372,249 26,627,570 --
SHERWOOD MARKET CENTER 343,240 19,029,732 --
SHOPPES @ 104 385,985 12,228,769 --
SHOPPES AT MASON 249,129 6,685,382 3,861,074
SILVERLAKE 285,014 8,903,405 --
SOUTH MONROE 213,093 6,202,069 --
SOUTH POINT PLAZA 209,355 14,876,640 --
S-6
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
------------ ------------ ---------
SOUTH POINTE CROSSING 279,858 15,483,030 --
SOUTHCENTER 257,171 13,293,333 --
SOUTHPARK 195,568 12,282,075 --
ST ANN SQUARE 345,192 6,799,636 4,861,922
STATLER SQUARE 370,770 9,739,541 5,393,006
STRAWFLOWER VILLAGE 153,788 11,139,376 --
SUNNYSIDE 205 182,560 9,720,721 5,678,996
TAMIAMI TRAILS 481,369 9,197,294 --
TASSAJARA CROSSING 310,417 23,149,512 --
TEQUESTA SHOPPES 564,489 7,888,776 --
TERRACE WALK 704,586 3,551,165 683,000
THE MARKETPLACE 1,038,753 7,104,515 4,833,300
THE PROMENADE 268,195 14,971,096 --
THE VILLAGE 146,548 7,360,757 --
THOMAS LAKE 214,407 16,087,404 --
TOWN CENTER AT MARTIN DOWNS 387,973 5,996,662 --
TOWN SQUARE 178,771 3,408,846 --
TROWBRIDGE CROSSING EQUIPORT 202,473 3,785,268 1,800,000
TWIN PEAKS 524,275 29,795,483 --
UNION SQUARE SHOPPING CENTER 556,755 7,380,986 --
UNIVERSITY COLLECTION 737,604 10,913,690 --
UNIVERSITY MARKETPLACE 2,122,729 10,703,507 --
VALLEY RANCH CENTRE 227,928 13,520,876 --
VENTURA VILLAGE 132,059 10,518,953 --
VILLAGE CENTER 6 1,189,672 13,936,215 --
VILLAGE IN TRUSSVILLE 631,669 3,713,807 1,775,000
WALKER CENTER 135,589 10,121,933 --
WATERFORD TOWNE CENTER 43,360 11,121,369 --
WELLEBY 780,688 7,743,531 --
WELLINGTON MARKET PLACE 1,498,316 17,233,854 --
WELLINGTON TOWN SQUARE 692,458 9,111,355 --
WEST COUNTY 1,006,227 5,605,134 3,190,000
WEST HILLS 125,737 8,119,496 5,185,042
WEST PARK PLAZA 103,736 10,728,235 --
WESTCHESTER PLAZA 390,261 8,207,096 5,712,441
WESTLAKE VILLAGE CENTER 681,958 32,104,781 --
WINDMILLER PLAZA PHASE I 431,949 13,847,700 --
WOODCROFT SHOPPING CENTER 469,317 6,550,608 --
WOODMAN VAN NUYS 138,667 12,196,579 5,895,124
WOODSIDE CENTRAL 186,176 12,159,521 --
WORTHINGTON PARK CENTRE 510,888 13,371,676 4,858,536
----------- -------------- -----------
104,467,176 2,297,486,128 401,596,373
=========== ============== ===========
S-7
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III
Depreciation and amortization of the Company's investment in buildings and
improvements reflected in the statement of operation is calculated over the
estimated useful lives of the assets as follows:
Buildings and improvements: up to 40 years
The aggregate cost for Federal income tax purposes was approximately
$2,100,351,999 at December 31, 1999.
The changes in total real estate assets for the period ended December 31, 1999,
1998 and 1997:
1999 1998 1997
--------------- -------------- ------------
Balance, beginning of period 1,183,184,013 799,801,367 389,007,481
Developed or acquired properties 1,215,563,938 399,305,955 408,475,251
Sale of property (18,330,608) (24,248,801) (2,907,503)
Improvements 21,535,961 8,325,492 5,226,138
-------------- -------------- ------------
Balance, end of period 2,401,953,304 1,183,184,013 799,801,367
============== ============== ============
The changes in accumulated depreciation for the period ended December 31, 1999,
1998 and 1997:
1999 1998 1997
------------ ------------ ------------
Balance, beginning of period 58,983,738 40,795,801 26,213,225
Sale of property (721,034) (5,121,929) (713,176)
Depreciation for period 46,204,472 23,309,866 15,295,752
------------ ----------- -----------
Balance, end of period 104,467,176 58,983,738 40,795,801
============ =========== ===========
S-8