UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
[ ] 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 333-57103
Mack-Cali Realty, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-3315804
- -------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11 Commerce Drive, Cranford, New Jersey 07016-3501
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(Address or principal executive office)
(Zip Code)
(908) 272-8000
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(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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 twelve (12) months (or such shorter period that the
Registrant was required to file such report) YES /X/ NO / / and (2) has been
subject to such filing requirements for the past ninety (90) days
YES /X/ NO / /.
MACK-CALI REALTY, L.P.
FORM 10-Q
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 2000
and December 31, 1999.................................... 4
Consolidated Statements of Operations for the three and
nine month periods ended September 30, 2000 and 1999..... 5
Consolidated Statement of Changes in Partners' Capital
for the nine months ended September 30, 2000............. 6
Consolidated Statements of Cash Flows for the nine months
ended September 30, 2000 and 1999........................ 7
Notes to Consolidated Financial Statements.................. 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 34
Item 3. Quantitative and Qualitative Disclosures about Market Risk.. 62
PART II OTHER INFORMATION AND SIGNATURES
Item 1. Legal Proceedings........................................... 63
Item 2. Changes in Securities and Use of Proceeds................... 63
Item 3. Defaults Upon Senior Securities............................. 63
Item 4. Submission of Matters to a Vote of Security Holders......... 63
Item 5. Other Information........................................... 63
Item 6. Exhibits.................................................... 64
Signatures.................................................. 67
2
MACK-CALI REALTY, L.P.
PART I - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
The accompanying unaudited consolidated balance sheets, statements of
operations, of changes in partners' capital, and of cash flows and
related notes, have been prepared in accordance with generally accepted
accounting principles ("GAAP") for interim financial information and in
conjunction with the rules and regulations of the Securities and
Exchange Commission ("SEC"). Accordingly, they do not include all of the
disclosures required by GAAP for complete financial statements. The
financial statements reflect all adjustments consisting only of normal,
recurring adjustments, which are in the opinion of management, necessary
for a fair presentation for the interim periods.
The aforementioned financial statements should be read in conjunction
with the notes to the aforementioned financial statements and
Management's Discussion and Analysis of Financial Condition and Results
of Operations and the financial statements and notes thereto included in
Mack-Cali Realty, L.P.'s Annual Report on Form 10-K and Form 10-K/A for
the fiscal year ended December 31, 1999.
The results of operations for the three and nine month periods ended
September 30, 2000 are not necessarily indicative of the results to be
expected for the entire fiscal year or any other period.
3
MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT UNIT AMOUNTS)
=============================================================================================================
September 30,
2000 December 31,
(UNAUDITED) 1999
- -------------------------------------------------------------------------------------------------------------
ASSETS
Rental property
Land and leasehold interests $ 562,104 $ 549,096
Buildings and improvements 3,008,135 3,014,532
Tenant improvements 97,466 85,057
Furniture, fixtures and equipment 6,208 6,160
- -------------------------------------------------------------------------------------------------------------
3,673,913 3,654,845
Less - accumulated depreciation and amortization (288,976) (256,629)
- -------------------------------------------------------------------------------------------------------------
Total rental property 3,384,937 3,398,216
Cash and cash equivalents 10,590 8,671
Investments in unconsolidated joint ventures 95,440 89,134
Unbilled rents receivable 47,120 53,253
Deferred charges and other assets, net 93,858 66,436
Restricted cash 6,447 7,081
Accounts receivable, net of allowance for doubtful accounts
of $532 and $672 7,770 6,810
- -------------------------------------------------------------------------------------------------------------
Total assets $ 3,646,162 $ 3,629,601
=============================================================================================================
LIABILITIES AND PARTNERS' CAPITAL
Senior unsecured notes $ 783,021 $ 782,785
Revolving credit facilities 264,483 177,000
Mortgages and loans payable 486,823 530,390
Distributions payable 44,610 42,499
Accounts payable and accrued expenses 74,461 63,394
Rents received in advance and security deposits 33,327 36,150
Accrued interest payable 6,505 16,626
- -------------------------------------------------------------------------------------------------------------
Total liabilities 1,693,230 1,648,844
- -------------------------------------------------------------------------------------------------------------
Minority interest in consolidated partially-owned properties 1,925 83,600
Commitments and contingencies
PARTNERS CAPITAL:
Preferred units, 223,124 and 229,304 units outstanding 228,861 235,200
General partner, 58,698,648 and 58,446,552 common units outstanding 1,499,768 1,441,882
Limited partners, 7,991,963 and 8,153,710 common units outstanding 213,854 211,551
Unit warrants, 2,000,000 and 2,000,000 outstanding 8,524 8,524
- -------------------------------------------------------------------------------------------------------------
Total partners' capital 1,951,007 1,897,157
- -------------------------------------------------------------------------------------------------------------
Total liabilities and partners' capital $ 3,646,162 $ 3,629,601
=============================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
4
MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS) (UNAUDITED)
=======================================================================================================================
Three Months Ended Nine Months Ended
September 30, September 30,
REVENUES 2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Base rents $ 123,600 $ 118,086 $ 367,270 $ 350,665
Escalations and recoveries from tenants 13,763 14,829 45,058 46,055
Parking and other 3,534 5,112 12,984 12,073
Equity in earnings of unconsolidated joint ventures 2,194 834 4,401 1,462
Interest income 291 159 2,537 629
- -----------------------------------------------------------------------------------------------------------------------
Total revenues 143,382 139,020 432,250 410,884
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EXPENSES
Real estate taxes 15,732 14,849 45,169 42,900
Utilities 11,604 11,634 31,997 31,055
Operating services 16,855 16,464 51,419 50,980
General and administrative 5,461 5,691 16,733 19,222
Depreciation and amortization 23,320 22,967 68,447 67,401
Interest expense 25,862 26,474 79,123 75,793
Non-recurring charges 27,911 -- 37,139 16,458
- -----------------------------------------------------------------------------------------------------------------------
Total expenses 126,745 98,079 330,027 303,809
- -----------------------------------------------------------------------------------------------------------------------
Income before gain on sales of rental property
and minority interest 16,637 40,941 102,223 107,075
Gain on sales of rental property 10,036 -- 86,205 --
- -----------------------------------------------------------------------------------------------------------------------
Income before minority interest 26,673 40,941 188,428 107,075
Minority interest in consolidated partially-owned properties -- -- 5,072 --
- -----------------------------------------------------------------------------------------------------------------------
Net income 26,673 40,941 183,356 107,075
Preferred unit distributions (3,928) (3,869) (11,562) (11,607)
- -----------------------------------------------------------------------------------------------------------------------
Net income available to common unitholders $ 22,745 $ 37,072 $ 171,794 $ 95,468
=======================================================================================================================
Basic earnings per unit $ 0.34 $ 0.55 $ 2.58 $ 1.42
Diluted earnings per unit $ 0.34 $ 0.55 $ 2.50 $ 1.42
- -----------------------------------------------------------------------------------------------------------------------
Distributions declared per common unit $ 0.61 $ 0.58 $ 1.77 $ 1.68
- -----------------------------------------------------------------------------------------------------------------------
Basic weighted average units outstanding 66,729 66,893 66,595 67,025
Diluted weighted average units outstanding 66,914 67,113 73,276 67,294
- -----------------------------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
5
MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (IN THOUSANDS) (UNAUDITED)
====================================================================================================================================
General Limited
Preferred Partner Partner Preferred General Limited Unit
Units Units Units Unitholders Partner Partners Warrants Total
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 1, 2000 229 58,447 8,154 $ 235,200 $ 1,441,882 $ 211,551 $ 8,524 $ 1,897,157
Net income -- -- -- 11,562 150,935 20,859 -- 183,356
Distributions -- -- -- (11,562) (103,825) (14,267) -- (129,654)
Conversion of preferred units
to limited partner units (6) -- 178 (6,339) -- 6,339 -- --
Redemption of limited partner
units for shares of common stock -- 340 (340) -- 10,628 (10,628) -- --
Contributions - proceeds from
stock options exercised -- 104 -- -- 2,155 -- -- 2,155
Deferred compensation plan
for directors -- -- -- -- 82 -- -- 82
Amortization of stock compensation -- -- -- -- 1,501 -- -- 1,501
Adjustment to fair value
of restricted stock -- -- -- -- 97 -- -- 97
Cancellation of Restricted
Stock Awards -- (5) -- -- -- -- -- --
Repurchase of general partner units -- (187) -- -- (5,237) -- -- (5,237)
Stock options charge -- -- -- -- 1,550 -- -- 1,550
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2000 223 58,699 7,992 $ 228,861 $ 1,499,768 $ 213,854 $ 8,524 $ 1,951,007
====================================================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
6
MACK-CALI REALTY, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
=============================================================================================================
Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES 2000 1999
- --------------------------------------------------------------------------------------------------------------
Net income $ 183,356 $ 107,075
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 68,447 67,401
Amortization of stock compensation 1,598 389
Amortization of deferred financing costs and debt discount 2,857 2,413
Stock options charge 1,550 --
Equity in earnings of unconsolidated joint ventures (4,401) (1,462)
Gain on sales of rental property (86,205) --
Minority interest in consolidated partially-owned properties 5,072 --
Changes in operating assets and liabilities:
Increase in unbilled rents receivable (9,056) (10,318)
Increase in deferred charges and other assets, net (33,840) (17,682)
Increase in accounts receivable, net (960) (1,400)
Increase in accounts payable and accrued expenses 11,067 13,106
(Decrease) increase in rents received in advance and security deposits (1,131) 1,858
(Decrease) increase in accrued interest payable (10,121) 992
- --------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 128,233 $ 162,372
==============================================================================================================
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to rental property $(224,797) $(143,198)
Investments in unconsolidated joint ventures (12,687) (39,626)
Distributions from unconsolidated joint ventures 10,782 12,008
Proceeds from sales of rental property 281,225 --
- --------------------------------------------------------------------------------------------------------------
Decrease (increase) in restricted cash 634 (158)
Net cash provided by (used in) investing activities $ 55,157 $(170,974)
=============================================================================================================
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from senior unsecured notes $ -- $ 782,535
Proceeds from revolving credit facilities 551,618 303,256
Proceeds from mortgages and loans payable -- 45,500
Repayments of revolving credit facilities (464,135) (724,900)
Repayments of mortgages and loans payable (43,567) (249,308)
Distributions to minority interest in partially-owned properties (88,672) --
Repurchase of general partner units (5,237) (25,000)
Payment of financing costs (6,090) (7,039)
Proceeds from stock options exercised 2,155 1,032
Proceeds from dividend reinvestment and stock purchase plan -- 32
- --------------------------------------------------------------------------------------------------------------
Payment of distributions (127,543) (122,247)
Net cash (used in) provided by financing activities $(181,471) $ 3,861
=============================================================================================================
Net increase (decrease) in cash and cash equivalents $ 1,919 $ (4,741)
Cash and cash equivalents, beginning of period $ 8,671 $ 5,809
- --------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 10,590 $ 1,068
=============================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
7
MACK-CALI REALTY, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT
PER UNIT AMOUNTS)
================================================================================
1. ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION
Mack-Cali Realty, L.P., a Delaware limited partnership, and its subsidiaries
(the "Operating Partnership") was formed on August 31, 1994 to conduct the
business of leasing, management, acquisition, development, construction and
tenant-related services for its sole general partner, Mack-Cali Realty
Corporation and its subsidiaries (the "Corporation" or "General Partner"). The
Operating Partnership, through its operating divisions and subsidiaries,
including the Mack-Cali property-owning partnerships and limited liability
companies, (collectively, the "Property Partnerships"), is the entity through
which all of the General Partner's operations are conducted.
The General Partner is a fully integrated, self-administered, self-managed real
estate investment trust ("REIT"). The General Partner controls the Operating
Partnership as its sole general partner, and owned an 88.0 percent and 87.8
percent common unit interest in the Operating Partnership as of September 30,
2000 and December 31, 1999, respectively.
The General Partner's business is the ownership of interests in and operation of
the Operating Partnership, and all of the General Partner's expenses are
incurred for the benefit of the Operating Partnership. The General Partner is
reimbursed by the Operating Partnership for all expenses it incurs relating to
the ownership and operation of the Operating Partnership. The Operating
Partnership earns a management fee of between three percent and five percent of
revenues, as defined, for its management of the Property Partnerships.
As of September 30, 2000, the Operating Partnership owned or had interests in
268 properties plus developable land (collectively, the "Properties"). The
Properties aggregate approximately 28.5 million square feet, and are comprised
of 164 office buildings and 91 office/flex buildings totaling approximately 28.1
million square feet (which includes eight office buildings and four office/flex
buildings, aggregating 1.5 million square feet, owned by unconsolidated joint
ventures in which the Operating Partnership has investment interests), six
industrial/warehouse buildings totaling approximately 387,400 square feet, two
multi-family residential complexes consisting of 451 units, two stand-alone
retail properties and three land leases. The Properties are located in 12
states, primarily in the Northeast, plus the District of Columbia.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include all accounts of the
Operating Partnership and its controlled subsidiaries. See Investments in
Unconsolidated Joint Ventures in Note 2 for the Operating Partnership's
accounting treatment of unconsolidated joint venture interests. All significant
intercompany accounts and transactions have been eliminated.
The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires 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.
2. SIGNIFICANT ACCOUNTING POLICIES
RENTAL
PROPERTY Rental properties are stated at cost less accumulated
depreciation and amortization. Costs directly related to the
acquisition and development of rental properties are
capitalized. Capitalized development costs include interest,
property taxes, insurance and other project costs incurred
during the period of development. Included in total rental
property is construction-in-progress of $127,729 and $98,438 as
of September 30, 2000 and December 31, 1999, respectively.
Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life
of the asset, are capitalized and depreciated over their
estimated useful lives. Fully-depreciated assets are removed
from the accounts.
8
Properties are depreciated using the straight-line method over
the estimated useful lives of the assets. The estimated useful
lives are as follows:
Leasehold interests Remaining lease term
----------------------------------------------------------------
Buildings and improvements 5 to 40 years
----------------------------------------------------------------
Tenant improvements The shorter of the term of
the related lease or useful life
----------------------------------------------------------------
Furniture, fixtures and equipment 5 to 10 years
----------------------------------------------------------------
On a periodic basis, management assesses whether there are any
indicators that the value of the real estate properties may be
impaired. A property's value is impaired only if management's
estimate of the aggregate future cash flows (undiscounted and
without interest charges) to be generated by the property are
less than the carrying value of the property. To the extent
impairment has occurred, the loss shall be measured as the
excess of the carrying amount of the property over the fair
value of the property. Management does not believe that the
value of any of its rental properties is impaired.
When assets are identified by management as held for sale, the
Operating Partnership discontinues depreciating the assets and
estimates the sales price, net of selling costs, of such assets.
If, in management's opinion, the net sales price of the assets
which have been identified for sale is less than the net book
value of the assets, a valuation allowance is established. See
Note 7.
INVESTMENTS IN
UNCONSOLIDATED
JOINT VENTURES The Operating Partnership accounts for its investments in
unconsolidated joint ventures under the equity method of
accounting as the Operating Partnership exercises significant
influence, but does not control these entities. These
investments are recorded initially at cost, as Investments in
Unconsolidated Joint Ventures, and subsequently adjusted for
equity in earnings and cash contributions and distributions. Any
difference between the carrying amount of these investments on
the balance sheet of the Operating Partnership and the
underlying equity in net assets is amortized as an adjustment to
equity in earnings of unconsolidated joint ventures over 40
years. See Note 4.
CASH AND CASH
EQUIVALENTS All highly liquid investments with a maturity of three months or
less when purchased are considered to be cash equivalents.
DEFERRED
FINANCING
COSTS Costs incurred in obtaining financing are capitalized and
amortized on a straight-line basis, which approximates the
effective interest method, over the term of the related
indebtedness. Amortization of such costs is included in interest
expense and was $1,055 and $895 for the three months ended
September 30, 2000 and 1999, respectively, and $2,857 and $2,413
for the nine months ended September 30, 2000 and 1999,
respectively.
DEFERRED
LEASING COSTS Costs incurred in connection with leases are capitalized and
amortized on a straight-line basis over the terms of the related
leases and included in depreciation and amortization.
Unamortized deferred leasing costs are charged to amortization
expense upon early termination of the lease. Certain employees
provide leasing services to the Properties and receive
compensation based on space leased. The portion of such
compensation, which is capitalized and amortized, approximated
$794 and $690 for the three months ended September 30, 2000 and
1999, respectively, and $2,383 and $2,091 for the nine months
ended September 30, 2000 and 1999, respectively.
9
REVENUE
RECOGNITION Base rental revenue is recognized on a straight-line basis over
the terms of the respective leases. Unbilled rents receivable
represents the amount by which straight-line rental revenue
exceeds rents currently billed in accordance with the lease
agreements. Parking revenue includes income from parking spaces
leased to tenants. Rental income on residential property under
operating leases having terms generally of one year or less is
recognized when earned.
Reimbursements are received from tenants for certain costs as
provided in the lease agreements. These costs generally include
real estate taxes, utilities, insurance, common area maintenance
and other recoverable costs. See Note 16.
INCOME AND
OTHER TAXES The Operating Partnership is a partnership and, as a
result, all income and losses of the partnership are allocated
to the partners for inclusion in their respective income tax
returns. Accordingly, no provision or benefit for income taxes
has been made in the accompanying financial statements.
INTEREST RATE
CONTRACTS Interest rate contracts are utilized by the Operating
Partnership to reduce interest rate risks. The Operating
Partnership does not hold or issue derivative financial
instruments for trading purposes. The differentials to be
received or paid under contracts designated as hedges are
recognized over the life of the contracts as adjustments to
interest expense.
In certain situations, the Operating Partnership uses forward
treasury lock agreements to mitigate the potential effects of
changes in interest rates for prospective transactions. Gains
and losses are deferred and amortized as adjustments to interest
expense over the remaining life of the associated debt to the
extent that such debt remains outstanding.
EARNINGS
PER UNIT In accordance with the Statement of Financial Accounting
Standards No. 128 ("FASB No. 128"), the Operating Partnership
presents both basic and diluted earnings per unit ("EPU"). Basic
EPU excludes dilution and is computed by dividing net income
available to common unitholders by the weighted average number
of units outstanding for the period. Diluted EPU reflects the
potential dilution that could occur if securities or other
contracts to issue common units were exercised or converted into
common units, where such exercise or conversion would result in
a lower EPU amount.
DISTRIBUTIONS
PAYABLE The distributions payable at September 30, 2000 represent
distributions payable to common unitholders of record as of
October 4, 2000 (66,692,311 common units), and preferred
distributions payable to preferred unitholders (223,124
preferred units) for the third quarter 2000. The third quarter
2000 common unit distribution of $0.61 per common unit as well
as the third quarter preferred unit distribution of $17.6046 per
preferred unit, were approved by the Board of Directors of the
General Partner on September 25, 2000 and paid on October 23,
2000.
The distributions payable at December 31, 1999 represent
distributions payable to common unitholders of record as of
January 4, 2000 (66,604,262 common units), and preferred
distributions payable to preferred unitholders (229,304
preferred units) for the fourth quarter 1999. The fourth quarter
1999 common unit distribution of $0.58 per common unit
(pro-rated for units issued during the quarter), as well as the
fourth quarter preferred unit distribution of $16.875 per
preferred unit, were approved by the Board of Directors of the
General Partner on December 17, 1999 and paid on January 21,
2000.
10
UNDERWRITING
COMMISSIONS
AND COSTS Underwriting commissions and costs incurred in connection
with the Corporation's stock offerings and subsequent
reinvestment in general partner units are reflected as a
reduction of these unit values.
STOCK OPTIONS The Operating Partnership accounts for stock-based compensation
using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations ("APB No. 25"). Under
APB No. 25, compensation cost is measured as the excess, if any,
of the quoted market price of the Corporation's stock at the
date of grant over the exercise price of the option granted.
Compensation cost for stock options, if any, is recognized
ratably over the vesting period. The Corporation's policy is to
grant options with an exercise price equal to the quoted closing
market price of the Corporation's stock on the business day
preceding the grant date. Accordingly, no compensation cost has
been recognized under the Corporation's stock option plans for
the granting of stock options. See Note 11.
NON-RECURRING
CHARGES The Operating Partnership considers non-recurring charges as
costs incurred specific to significant non-recurring events that
impact the comparative measurement of the Operating
Partnership's performance.
RECLASSIFI-
CATION Certain reclassifications have been made to prior period
amounts in order to conform with current period presentation.
3. ACQUISITIONS, DISPOSITIONS AND OTHER TRANSACTIONS
2000 TRANSACTIONS
OPERATING PROPERTY ACQUISITIONS
The Operating Partnership acquired the following operating properties during the
nine months ended September 30, 2000:
- --------------------------------------------------------------------------------------------------------------------------
Investment by
Acquisition # of Rentable Operating
Date Property/Portfolio Name Location Bldgs. Square Feet Partnership (a)
- --------------------------------------------------------------------------------------------------------------------------
OFFICE
5/23/00 555 & 565 Taxter Road Elmsford, Westchester County, NY 2 341,108 $ 42,980
6/14/00 Four Gatehall Drive Parsippany, Morris County, NJ 1 248,480 42,381
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTY ACQUISITIONS: 3 589,588 $ 85,361
- --------------------------------------------------------------------------------------------------------------------------
OFFICE/FLEX
3/24/00 Two Executive Drive (b) Moorestown, Burlington County, NJ 1 60,800 $ 4,007
7/14/00 915 North Lenola Road (b) Moorestown, Burlington County, NJ 1 52,488 2,542
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTY ACQUISITION: 2 113,288 $ 6,549
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING PROPERTY ACQUISITIONS: 5 702,876 $ 91,910
==========================================================================================================================
SEE FOOTNOTES ON PAGE 14.
11
PROPERTIES PLACED IN SERVICE
The Operating Partnership placed in service the following properties through the
completion of development during the nine months ended September 30, 2000:
- --------------------------------------------------------------------------------------------------------------------------
Investment by
Date Placed # of Rentable Operating
in Service Property Name Location Bldgs. Square Feet Partnership (c)
- --------------------------------------------------------------------------------------------------------------------------
OFFICE
9/01/00 Harborside Plaza 4-A Jersey City, Hudson County, NJ 1 207,670 $ 53,782
9/15/00 Liberty Corner Corp. Center Bernards Township, Somerset County, NJ 1 132,010 16,387
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES PLACED IN SERVICE: 2 339,680 $ 70,169
- --------------------------------------------------------------------------------------------------------------------------
TOTAL PROPERTIES PLACED IN SERVICE: 2 339,680 $ 70,169
==========================================================================================================================
SEE FOOTNOTES ON PAGE 14.
LAND TRANSACTIONS
On January 13, 2000, the Operating Partnership acquired approximately 12.7 acres
of developable land located at the Operating Partnership's Airport Business
Center, Lester, Delaware County, Pennsylvania. The land was acquired for
approximately $2,069.
On August 24, 2000, the Operating Partnership entered into a joint venture with
SJP Properties Company ("SJP Properties") to form Morris V Realty L.L.C. and
Morris VI Realty L.L.C., which acquired approximately 47.5 acres of developable
land located adjacent to the Operating Partnership's Morris County Financial
Center, Parsippany, Morris County, New Jersey. The land was acquired for
approximately $16,193. The Operating Partnership accounts for the joint venture
on a consolidated basis.
OTHER TRANSACTIONS
On September 21, 2000, the Corporation and Prentiss Properties Trust, a Maryland
REIT ("Prentiss"), mutually agreed to terminate the agreement and plan of merger
("Merger Agreement") dated as of June 27, 2000 among the Corporation, the
Operating Partnership, Prentiss and Prentiss Properties Acquisition Partners,
L.P., a Delaware limited partnership of which Prentiss (through a wholly-owned
direct subsidiary) is the sole general partner ("Prentiss Partnership"). In
connection with such termination, the Operating Partnership deposited $25,000
into escrow for the benefit of Prentiss and Prentiss Partnership. All costs
associated with the termination of the Merger Agreement are included in
non-recurring charges for the three and nine month periods ended September 30,
2000.
The Operating Partnership and Prentiss also announced that they had
simultaneously consummated a purchase and sale transaction whereby the Operating
Partnership sold to Prentiss its 270,000 square-foot Cielo Center property
located in Austin, Travis County, Texas (see "2000 Transactions Dispositions").
On June 27, 2000, the Corporation announced that William L. Mack was appointed
Chairman of the Board of Directors and John J. Cali was named Chairman Emeritus
of the Board of Directors. Brant Cali resigned as Executive Vice President,
Chief Operating Officer and Assistant Secretary of the Corporation and as a
member of the Board of Directors, and John R. Cali resigned as Executive Vice
President, Development of the Corporation. John R. Cali was appointed to the
Board of Directors of the Corporation to take the seat previously held by Brant
Cali. (See Note 15).
DISPOSITIONS
On February 25, 2000, the Operating Partnership sold 39.1 acres of vacant land
located at the Operating Partnership's Horizon Center Business Park in Hamilton
Township, Mercer County, New Jersey, for net proceeds, after selling costs, of
approximately $4,179.
On April 17, 2000, the Operating Partnership sold 95 Christopher Columbus Drive
located in Jersey City, Hudson County, New Jersey, for net proceeds, after
selling costs, of approximately $148,222.
On April 20, 2000, the Operating Partnership sold Atrium at Coulter Ridge
located in Amarillo, Potter County, Texas, for net proceeds, after selling
costs, of approximately $1,467.
12
On June 9, 2000, the Operating Partnership sold 412 Mt. Kemble Avenue located in
Morris Township, Morris County, New Jersey, for net proceeds, after selling
costs, of approximately $81,981.
On September 21, 2000, the Operating Partnership sold Cielo Center located in
Austin, Travis County, Texas for net proceeds, after selling costs, of
approximately $45,785.
1999 TRANSACTIONS
OPERATING PROPERTY ACQUISITIONS
The Operating Partnership acquired the following operating properties during the
year ended December 31, 1999:
- --------------------------------------------------------------------------------------------------------------------------
Investment by
Acquisition # of Rentable Operating
Date Property/Portfolio Name Location Bldgs. Square Feet Partnership (c)
- --------------------------------------------------------------------------------------------------------------------------
OFFICE
3/05/99 Pacifica Portfolio - Phase III(d) Colorado Springs, El Paso County, CO 2 94,737 $ 5,709
7/21/99 1201 Connecticut Avenue, NW Washington, D.C. 1 169,549 32,799
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTY ACQUISITIONS: 3 264,286 $ 38,508
- --------------------------------------------------------------------------------------------------------------------------
OFFICE/FLEX
12/21/99 McGarvey Portfolio - Phase III(b) Moorestown, Burlington County, NJ 3 138,600 $ 8,012
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTY ACQUISITION: 3 138,600 $ 8,012
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING PROPERTY ACQUISITIONS: 6 402,886 $ 46,520
==========================================================================================================================
PROPERTIES PLACED IN SERVICE
The Operating Partnership placed in service the following properties through
the completion of development or redevelopment during the year ended
December 31, 1999:
- --------------------------------------------------------------------------------------------------------------------------
Investment by
Date Placed # of Rentable Operating
in Service Property Name Location Bldgs. Square Feet Partnership (c)
- --------------------------------------------------------------------------------------------------------------------------
OFFICE
8/09/99 2115 Linwood Avenue Fort Lee, Bergen County, NJ 1 68,000 $ 8,147
11/01/99 795 Folsom Street (e) San Francisco, San Francisco County, CA 1 183,445 37,337
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES PLACED IN SERVICE: 2 251,445 $ 45,484
- --------------------------------------------------------------------------------------------------------------------------
OFFICE/FLEX
3/01/99 One Center Court Totowa, Passaic County, NJ 1 38,961 $ 2,140
9/17/99 12 Skyline Drive Hawthorne, Westchester County, NY 1 46,850 5,023
12/10/99 600 West Avenue (f) Stamford, Fairfield County, CT 1 66,000 5,429
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTIES PLACED IN SERVICE: 3 151,811 $ 12,592
- --------------------------------------------------------------------------------------------------------------------------
LAND LEASE
2/01/99 Horizon Center Business Park (g) Hamilton Township, Mercer County, NJ N/A 27.7 acres $ 1,007
- --------------------------------------------------------------------------------------------------------------------------
TOTAL LAND LEASE TRANSACTIONS: 27.7 acres $ 1,007
- --------------------------------------------------------------------------------------------------------------------------
TOTAL PROPERTIES PLACED IN SERVICE: 5 403,256 $ 59,083
==========================================================================================================================
SEE FOOTNOTES ON SUBSEQUENT PAGE.
13
(a) Transactions were funded primarily from net proceeds received in the
sale or sales of rental property.
(b) The properties were acquired through the exercise of a purchase option
obtained in the initial acquisition of the McGarvey portfolio in
January 1998.
(c) Unless otherwise noted, transactions were funded by the Operating
Partnership with funds primarily made available through draws on the
Operating Partnership's credit facilities.
(d) William L. Mack, Chairman of the Board of Directors of the Corporation
and an equity holder of the Operating Partnership, was an indirect
owner of an interest in certain of the buildings contained in the
Pacifica portfolio.
(e) On June 1, 1999, the building was acquired for redevelopment for
approximately $34,282.
(f) On May 4, 1999, the Operating Partnership acquired, from an entity
whose principals include Timothy M. Jones, Martin S. Berger and Robert
F. Weinberg, each of whom are affiliated with the Operating Partnership
as the President of the Corporation, a current member of the Board of
Directors and a former member of the Board of Directors of the
Corporation, respectively, approximately 2.5 acres of vacant land in
the Stamford Executive Park, located in Stamford, Fairfield County,
Connecticut. The Operating Partnership acquired the land for
approximately $2,181.
(g) On February 1, 1999, the Operating Partnership entered into a ground
lease agreement to lease 27.7 acres of developable land located at the
Operating Partnership's Horizon Center Business Park, located in
Hamilton Township, Mercer County, New Jersey on which Home Depot
constructed a 134,000 square-foot retail store.
LAND TRANSACTIONS
On February 26, 1999, the Operating Partnership acquired approximately 2.3 acres
of vacant land adjacent to one of the Operating Partnership's operating
properties located in San Antonio, Bexar County, Texas for approximately $1,524,
which was made available from the Operating Partnership's cash reserves.
On March 2, 1999, the Operating Partnership entered into a joint venture
agreement with SJP Vaughn Drive, L.L.C. Under the agreement, the Operating
Partnership has agreed to contribute its vacant land at Three Vaughn Drive,
Princeton, Mercer County, New Jersey, subject to satisfaction of certain
conditions, for an equity interest in the venture.
On March 15, 1999, the Operating Partnership entered into a joint venture with
SJP 106 Allen Road, L.L.C. to form MC-SJP Pinson Development, LLC, which
acquired vacant land located in Bernards Township, Somerset County, New Jersey.
The joint venture subsequently completed construction and placed in service a
132,010 square-foot office building on this site (see "2000 Transactions -
Properties Placed in Service"). The Operating Partnership accounts for the joint
venture on a consolidated basis.
On August 31, 1999, the Operating Partnership acquired, from an entity whose
principals include Brant Cali, a former Executive Vice President and Chief
Operating Officer of the Corporation and a former member of the Board of
Directors of the Corporation, and certain immediate family members of John J.
Cali, Chairman Emeritus of the Board of Directors of the Corporation,
approximately 28.1 acres of developable land adjacent to two of the Operating
Partnership's operating properties located in Roseland, Essex County, New Jersey
for approximately $6,097. The acquisition was funded with cash and the issuance
of 121,624 common units to the seller (see Note 12). The Operating Partnership
has commenced construction of a 220,000 square-foot office building on the
acquired land.
In August 1999, the Operating Partnership entered into an agreement with SJP
Properties which provides a cooperative effort in seeking approvals to develop
up to approximately 1.8 million square feet of office development on certain
vacant land owned or controlled, respectively, by the Operating Partnership and
SJP Properties, in Hanover and Parsippany, Morris County, New Jersey. The
agreement provides that the parties shall share equally in the costs associated
with seeking such requisite approvals. Subsequent to obtaining the requisite
approvals, upon mutual consent, the Operating Partnership and SJP Properties may
enter into one or more joint ventures to construct on the vacant land, or seek
to dispose of their respective vacant land parcels subject to the agreement.
DISPOSITIONS
On November 15, 1999, the Operating Partnership sold its 70,550 square-foot
office building located at 400 Alexander Road in Princeton, Mercer County, New
Jersey for net proceeds, after selling costs, of approximately $8,628.
On December 15, 1999, the Operating Partnership sold its 119,301 square-foot
office building located at 20002 North 19th Avenue in Phoenix, Maricopa County,
Arizona for net proceeds, after selling costs, of approximately $8,772.
14
4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
PRU-BETA 3 (NINE CAMPUS DRIVE)
On March 27, 1998, the Operating Partnership acquired a 50 percent interest in
an existing joint venture with The Prudential Insurance Company of America
("Prudential"), known as Pru-Beta 3, which owns and operates Nine Campus Drive,
a 156,495 square-foot office building, located in the Mack-Cali Business Campus
(formerly Prudential Business Campus) office complex in Parsippany, Morris
County, New Jersey. The Operating Partnership performs management and leasing
services for the property owned by the joint venture and recognized $112 and
$112 in fees for such services in the nine months ended September 30, 2000 and
1999, respectively.
HPMC
On April 23, 1998, the Operating Partnership entered into a joint venture
agreement with HCG Development, L.L.C. and Summit Partners I, L.L.C. to form
HPMC Development Partners, L.P. and, on July 21, 1998, entered into a second
joint venture, HPMC Development Partners II, L.P. (formerly known as HPMC Lava
Ridge Partners, L.P.), with these same parties. HPMC Development Partners,
L.P.'s efforts have focused on two development projects, commonly referred to as
Continental Grand II and Summit Ridge. HPMC Development Partners II, L.P.'s
efforts have focused on three development projects, commonly referred to as Lava
Ridge, Peninsula Gateway and Stadium Gateway. Among other things, the
partnership agreements provide for a preferred return on the Operating
Partnership's invested capital in each venture, in addition to 50 percent of
such venture's profit above the preferred returns, as defined in each agreement.
CONTINENTAL GRAND II
Continental Grand II is a 237,360 square-foot office building located in El
Segundo, Los Angeles County, California, which was constructed and placed in
service by the venture.
SUMMIT RIDGE
Summit Ridge is an office complex of three one-story buildings aggregating
133,750 square feet located in San Diego, San Diego County, California, which
was constructed and placed in service by the venture.
LAVA RIDGE
Lava Ridge is an office complex of three two-story buildings aggregating
183,200 square feet located in Roseville, Placer County, California, which was
constructed and placed in service by the venture.
PENINSULA GATEWAY
Peninsula Gateway is a parcel of land purchased from the City of Daly City,
California, upon which the venture has commenced construction of an office
building and theater and retail complex aggregating 471,379 square feet.
STADIUM GATEWAY
Stadium Gateway is a 1.5 acre site located in Anaheim, Orange County,
California, acquired by the venture upon which it has commenced construction
of a six-story 261,554 square-foot office building.
G&G MARTCO (CONVENTION PLAZA)
On April 30, 1998, the Operating Partnership acquired a 49.9 percent interest in
an existing joint venture, known as G&G Martco, which owns Convention Plaza, a
305,618 square-foot office building, located in San Francisco, San Francisco
County, California. A portion of its initial investment was financed through the
issuance of common units, as well as funds drawn from the Operating
Partnership's credit facilities. Subsequently, on June 4, 1999, the Operating
Partnership acquired an additional 0.1 percent interest in G&G Martco through
the issuance of common units (see Note 12). The Operating Partnership performs
management and leasing services for the property owned by the joint venture and
recognized $157 and $176 in fees for such services in the nine months ended
September 30, 2000 and 1999, respectively.
15
AMERICAN FINANCIAL EXCHANGE L.L.C.
On May 20, 1998, the Operating Partnership entered into a joint venture
agreement with Columbia Development Company, L.L.C. to form American Financial
Exchange L.L.C. The venture was initially formed to acquire land for future
development, located on the Hudson River waterfront in Jersey City, Hudson
County, New Jersey, adjacent to the Operating Partnership's Harborside Financial
Center office complex. The Operating Partnership holds a 50 percent interest in
the joint venture. Among other things, the partnership agreement provides for a
preferred return on the Operating Partnership's invested capital in the venture,
in addition to the Operating Partnership's proportionate share of the venture's
profit, as defined in the agreement. The joint venture acquired land on which it
constructed a parking facility, which is currently leased to a parking operator
under a 10-year agreement. Such parking facility serves a ferry service between
the Operating Partnership's Harborside property and Manhattan. In October 2000,
the Operating Partnership announced plans to construct a 575,000 square-foot
office building and terminate the parking agreement on certain of the land owned
by the venture. The total costs of the project are estimated to be approximately
$140,000. The project, which is currently 52 percent pre-leased, is anticipated
to be completed in early 2002.
RAMLAND REALTY ASSOCIATES L.L.C. (ONE RAMLAND ROAD)
On August 20, 1998, the Operating Partnership entered into a joint venture
agreement with S.B. New York Realty Corp. to form Ramland Realty Associates
L.L.C. The venture was formed to own, manage and operate One Ramland Road, a
232,000 square-foot office/flex building plus adjacent developable land, located
in Orangeburg, Rockland County, New York. In August 1999, the joint venture
completed redevelopment of the property and placed the office/flex building in
service. The Operating Partnership holds a 50 percent interest in the joint
venture. The Operating Partnership performs management, leasing and other
services for the property owned by the joint venture and recognized $170 and $7
in fees for such services in the nine months ended September 30, 2000 and 1999,
respectively.
ASHFORD LOOP ASSOCIATES L.P. (1001 SOUTH DAIRY ASHFORD/2100 WEST LOOP SOUTH) On
September 18, 1998, the Operating Partnership entered into a joint venture
agreement with Prudential to form Ashford Loop Associates L.P. The venture was
formed to own, manage and operate 1001 South Dairy Ashford, a 130,000
square-foot office building acquired on September 18, 1998 and 2100 West Loop
South, a 168,000 square-foot office building acquired on November 25, 1998, both
located in Houston, Harris County, Texas. The Operating Partnership holds a 20
percent interest in the joint venture. The joint venture may be required to pay
additional consideration due to earn-out provisions in the acquisition
contracts. Subsequently, through September 30, 2000, the venture paid $16,519
($3,304 representing the Operating Partnership's share) in accordance with the
earn-out provisions in the acquisition contracts. The Operating Partnership
performs management and leasing services for the properties owned by the joint
venture and recognized $89 and $96 in fees for such services in the nine months
ended September 30, 2000 and 1999, respectively.
ARCAP INVESTORS, L.L.C.
On March 18, 1999, the Operating Partnership invested in ARCap Investors,
L.L.C., a joint venture with several participants, which was formed to invest in
sub-investment grade tranches of commercial mortgage-backed securities ("CMBS").
The Operating Partnership has invested $20,000 in the venture. William L. Mack,
Chairman of the Board of Directors of the Corporation and an equity holder of
the Operating Partnership, is a principal of the managing member of the venture.
At September 30, 2000, the venture held approximately $423,499 face value of
CMBS bonds at an aggregate cost of $199,618.
SOUTH PIER AT HARBORSIDE HOTEL DEVELOPMENT
On November 17, 1999, the Operating Partnership entered into an agreement with
Hyatt Corporation to develop a 350-room luxury hotel on the Operating
Partnership's South Pier at Harborside Financial Center, Jersey City, Hudson
County, New Jersey. In July 2000, the joint venture began development of the
hotel project.
NORTH PIER AT HARBORSIDE RESIDENTIAL DEVELOPMENT
On August 5, 1999, the Operating Partnership entered into an agreement which,
upon satisfaction of certain conditions, provides for the contribution of its
North Pier at Harborside Financial Center, Jersey City, Hudson County, New
Jersey to a joint venture with Lincoln Property Company Southwest, Inc., in
exchange for cash and an equity interest in the venture. The venture intends to
develop residential housing on the property.
16
SUMMARIES OF UNCONSOLIDATED JOINT VENTURES
The following is a summary of the financial position of the unconsolidated joint
ventures in which the Operating Partnership had investment interests as of
September 30, 2000 and December 31, 1999:
September 30, 2000
------------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Rental property, net $ 21,059 $119,789 $ 10,890 $ 11,530 $ 19,169 $ 35,013 $ -- $217,450
Other assets 2,921 13,872 2,660 114 4,136 678 404,197 428,578
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 23,980 $133,661 $ 13,550 $ 11,644 $ 23,305 $ 35,691 $404,197 $646,028
==================================================================================================================================
LIABILITIES AND PARTNERS'/
MEMBERS' CAPITAL:
Mortgages and loans payable $ -- $ 65,347 $ 50,000 $ -- $ 16,839 $ -- $211,955 $344,141
Other liabilities 255 9,976 1,379 386 238 678 67,477 80,389
Partners'/members' capital 23,725 58,338 (37,829) 11,258 6,228 35,013 124,765 221,498
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
partners'/members' capital $ 23,980 $133,661 $ 13,550 $ 11,644 $ 23,305 $ 35,691 $404,197 $646,028
==================================================================================================================================
Operating Partnership's net
investment in unconsolidated
joint ventures $ 16,342 $ 33,500 $ 4,399 $ 11,307 $ 2,682 $ 7,347 $ 19,863 $ 95,440
- ----------------------------------------------------------------------------------------------------------------------------------
December 31, 1999
------------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Rental property, net $ 21,817 $ 72,148 $ 11,552 $ 10,695 $ 19,549 $ 31,476 $ -- $167,237
Other assets 3,319 6,427 2,571 773 5,069 768 239,441 258,368
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 25,136 $ 78,575 $ 14,123 $ 11,468 $ 24,618 $ 32,244 $239,441 $425,605
==================================================================================================================================
LIABILITIES AND PARTNERS'/
MEMBERS' CAPITAL:
Mortgages and loans payable $ -- $ 41,274 $ 43,081 $ -- $ 17,300 $ -- $108,407 $210,062
Other liabilities 186 7,254 1,383 2 1,263 3,536 36,109 49,733
Partners'/members' capital 24,950 30,047 (30,341) 11,466 6,055 28,708 94,925 165,810
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
partners'/members' capital $ 25,136 $ 78,575 $ 14,123 $ 11,468 $ 24,618 $ 32,244 $239,441 $425,605
==================================================================================================================================
Operating Partnership's net
investment in unconsolidated
joint ventures $ 17,072 $ 23,337 $ 8,352 $ 11,571 $ 2,697 $ 6,073 $ 20,032 $ 89,134
- ----------------------------------------------------------------------------------------------------------------------------------
17
The following is a summary of the results of operations of the unconsolidated
joint ventures for the period in which the Operating Partnership had investment
interests during the three and nine month periods ended September 30, 2000 and
1999:
Three Months Ended September 30, 2000
---------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 1,253 $ 2,631 $ 2,783 $ 275 $ 983 $ 1,436 $ 5,357 $ 14,718
Operating and other expenses (391) (78) (890) (41) (280) (658) (876) (3,214)
Depreciation and amortization (307) (747) (384) (27) (252) (211) (70) (1,998)
Interest expense -- (979) (1,075) -- (407) -- (2,780) (5,241)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $ 555 $ 827 $ 434 $ 207 $ 44 $ 567 $ 1,631 $ 4,265
==================================================================================================================================
Operating Partnership's equity
in earnings of unconsolidated
joint ventures $ 239 $ 627 $ 286 $ 207 $ 22 $ 113 $ 700 $ 2,194
- ----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended September 30, 1999
--------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 1,227 -- $ 2,422 $ 250 $ 580 $ 971 $ 3,223 $ 8,673
Operating and other expenses (389) -- (814) (33) (103) (597) (1,201) (3,137)
Depreciation and amortization (304) -- (233) (24) (178) (163) -- (902)
Interest expense -- -- (813) -- -- -- (1,014) (1,827)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $ 534 -- $ 562 $ 193 $ 299 $ 211 $ 1,008 $ 2,807
==================================================================================================================================
Operating Partnership's equity
in earnings of unconsolidated
joint ventures $ 228 -- $ 124 $ 193 $ 150 $ 42 $ 97 $ 834
- ----------------------------------------------------------------------------------------------------------------------------------
Nine Months Ended September 30, 2000
--------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 3,721 $ 6,191 $ 8,064 $ 779 $ 2,930 $ 4,268 $ 16,507 $ 42,460
Operating and other expenses (1,210) (1,087) (2,443) (123) (870) (1,929) (2,168) (9,830)
Depreciation and amortization (918) (2,155) (1,146) (47) (734) (614) (70) (5,684)
Interest expense -- (2,220) (2,989) -- (1,153) -- (4,481) (10,843)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $ 1,593 $ 729 $ 1,486 $ 609 $ 173 $ 1,725 $ 9,788 $ 16,103
==================================================================================================================================
Operating Partnership's equity
in earnings unconsolidated
joint ventures $ 680 $ 729 $ 498 $ 552 $ 84 $ 358 $ 1,500 $ 4,401
- ----------------------------------------------------------------------------------------------------------------------------------
18
Nine Months Ended September 30, 1999
-------------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 3,697 -- $ 6,572 $ 667 $ 580 $ 2,959 $ 5,998 $ 20,473
Operating and other expenses (1,134) -- (2,204) (163) (103) (1,645) (3,213) (8,462)
Depreciation and amortization (929) -- (696) (70) (178) (379) -- (2,252)
Interest expense -- -- (2,261) -- -- -- (1,558) (3,819)
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 1,634 -- $ 1,411 $ 434 $ 299 $ 935 $ 1,227 $ 5,940
====================================================================================================================================
Operating Partnership's equity
in earnings of unconsolidated
joint ventures $ 584 -- $ (153) $ 384 $ 150 $ 176 $ 321 $ 1,462
- ------------------------------------------------------------------------------------------------------------------------------------
5. DEFERRED CHARGES AND OTHER ASSETS
September 30, December 31,
2000 1999
- --------------------------------------------------------------------------------
Deferred leasing costs $ 75,559 $ 62,076
Deferred financing costs 22,781 16,690
- --------------------------------------------------------------------------------
98,340 78,766
Accumulated amortization (24,937) (20,197)
- --------------------------------------------------------------------------------
Deferred charges, net 73,403 58,569
Prepaid expenses and other assets 20,455 7,867
- --------------------------------------------------------------------------------
Total deferred charges and other assets, net $ 93,858 $ 66,436
================================================================================
6. RESTRICTED CASH
Restricted cash includes security deposits for the Operating Partnership's
residential properties and certain commercial properties, and escrow and reserve
funds for debt service, real estate taxes, property insurance, capital
improvements, tenant improvements, and leasing costs established pursuant to
certain mortgage financing arrangements, and is comprised of the following:
September 30, December 31,
2000 1999
- --------------------------------------------------------------------------------
Security deposits $ 6,372 $ 6,021
Escrow and other reserve funds 75 1,060
- --------------------------------------------------------------------------------
Total restricted cash $ 6,447 $ 7,081
================================================================================
7. RENTAL PROPERTY HELD FOR SALE
As of September 30, 2000, included in total rental property are 11 office
properties that the Operating Partnership has identified as held for sale. These
properties have an aggregate carrying value of $119,564 and $119,743 as of
September 30, 2000 and December 31, 1999, respectively, and are all located
in Omaha, Douglas County, Nebraska; San Antonio, Bexar County, Texas or
Houston, Harris County, Texas.
19
As of December 31, 1999, included in total rental property were three office
properties that the Operating Partnership had identified as held for sale. The
three office properties had an aggregate carrying value of $77,783 as of
December 31, 1999 and are all located in Omaha, Douglas County, Nebraska; Jersey
City, Hudson County, New Jersey or Amarillo, Potter County, Texas. The office
properties located in Jersey City, Hudson County, New Jersey and Amarillo,
Potter County, Texas were sold in April 2000 in two separate transactions (see
Note 3).
The following is a summary of the condensed results of operations of the rental
properties held for sale at September 30, 2000 for the nine months ended
September 30, 2000 and 1999:
Nine Months
Ended September 30,
2000 1999
- --------------------------------------------------------------------------------
Total revenues $ 22,563 $ 20,743
Operating and other expenses (11,384) (10,489)
Depreciation and amortization (2,370) (2,313)
- --------------------------------------------------------------------------------
Net income $ 8,809 $ 7,941
================================================================================
There can be no assurance if and when sales of the Operating Partnership's
rental properties held for sale will occur.
8. SENIOR UNSECURED NOTES
On March 16, 1999, the Operating Partnership issued $600,000 face amount of
senior unsecured notes with interest payable semi-annually in arrears. The total
proceeds from the issuance (net of selling commissions and discount) of
approximately $593,500 were used to pay down outstanding borrowings under the
Unsecured Facility, as defined in Note 9, and to pay off certain mortgage loans.
The senior unsecured notes were issued at a discount of approximately $2,748,
which is being amortized over the terms of the respective tranches as an
adjustment to interest expense.
On August 2, 1999, the Operating Partnership issued an additional $185,283 of
senior unsecured notes with interest payable monthly. The Operating Partnership
used the proceeds to retire the TIAA Mortgage, as defined in Note 10.
The Operating Partnership's total senior unsecured notes (collectively, "Senior
Unsecured Notes") are redeemable at any time at the option of the Operating
Partnership, subject to certain conditions including yield maintenance.
A summary of the terms of the Senior Unsecured Notes outstanding as of September
30, 2000 and December 31, 1999 is as follows:
September 30, December 31, Effective
2000 1999 Rate (1)
- ------------------------------------------------------------------------------------------------------------------
7.18% Senior Unsecured Notes, due December 31, 2003 $185,283 $185,283 7.23%
7.00% Senior Unsecured Notes, due March 15, 2004 299,724 299,665 7.27%
7.25% Senior Unsecured Notes, due March 15, 2009 298,014 297,837 7.49%
- ------------------------------------------------------------------------------------------------------------------
Total Senior Unsecured Notes $783,021 $782,785 7.34%
==================================================================================================================
(1) Includes the cost of terminated treasury lock agreements (if any), offering
and other transaction costs and the discount on the notes, as applicable.
The terms of the Senior Unsecured Notes include certain restrictions and
covenants which require compliance with financial ratios relating to the maximum
amount of debt leverage, the maximum amount of secured indebtedness, the minimum
amount of debt service coverage and the maximum amount of unsecured debt as a
percent of unsecured assets.
20
9. REVOLVING CREDIT FACILITIES
2000 UNSECURED FACILITY
On June 22, 2000, the Operating Partnership obtained an unsecured revolving
credit facility ("2000 Unsecured Facility") with a current borrowing capacity of
$800,000 from a group of 24 lenders. The interest rate on outstanding borrowings
under the credit line is currently the London Inter-Bank Offered Rate ("LIBOR")
(6.62 percent at September 30, 2000) plus 80 basis points. The Operating
Partnership may instead elect an interest rate representing the higher of the
lender's prime rate or the Federal Funds rate plus 50 basis points. In the event
of a change in the Operating Partnership's unsecured debt rating, the interest
rate will be changed on a sliding scale. The 2000 Unsecured Facility also
requires a 20 basis point facility fee on the current borrowing capacity payable
quarterly in arrears. Subject to certain conditions, the Operating Partnership
has the ability to increase the borrowing capacity of the credit line up to
$1,000,000. The 2000 Unsecured Facility matures in June 2003, with an extension
option of one year, which would require a payment of 25 basis points of the then
borrowing capacity of the credit line upon exercise.
The terms of the 2000 Unsecured Facility include certain restrictions and
covenants which limit, among other things, the payment of dividends (as
discussed below), the incurrence of additional indebtedness, the incurrence
of liens and the disposition of assets, and which require compliance with
financial ratios relating to the maximum leverage ratio, the maximum amount
of secured indebtedness, the minimum amount of tangible net worth, the
minimum amount of debt service coverage, the minimum amount of fixed charge
coverage, the maximum amount of unsecured indebtedness, the minimum amount of
unencumbered property debt service coverage and certain investment
limitations. The dividend restriction referred to above provides that, except
to enable the Corporation to continue to qualify as a REIT under the Code,
the Corporation will not during any four consecutive fiscal quarters make
distributions with respect to common stock or other equity interests in an
aggregate amount in excess of 90 percent of funds from operations (as
defined) for such period, subject to certain other adjustments.
The lending group for the 2000 Unsecured Facility consists of: Chase Manhattan
Bank, as administrative agent; Fleet National Bank, as syndication agent; Bank
of America, N.A., as documentation agent; Bank One, NA, Commerzbank
Aktiengesellschaft and First Union National Bank, as senior managing agents; PNC
Bank, N.A., as managing agent; Bank Austria Creditanstalt Corporate Finance,
Inc., Bayerische Hypo-und Vereinsbank AG, Dresdner Bank AG, Societe Generale,
Summit Bank and Wells Fargo Bank, N.A., as co-agents; and Bayerische Landesbank
Girozentrale; Citizens Bank of Massachusetts; European American Bank; Chevy
Chase Bank; Citicorp Real Estate, Inc.; DG Bank Deutsche Genossenschaftsbank,
AG; Erste Bank; KBC Bank N.V.; SunTrust Bank; Bank Leumi USA and Israel Discount
Bank of New York.
In conjunction with obtaining the 2000 Unsecured Facility, the Operating
Partnership drew funds on the new facility to repay in full and terminate the
Unsecured Facility.
UNSECURED FACILITY
The Operating Partnership had an unsecured revolving credit facility ("Unsecured
Facility") with a borrowing capacity of $1,000,000 from a group of 28 lenders.
The interest rate was based on the Operating Partnership's achievement of
investment grade unsecured debt ratings and, at the Operating Partnership's
election, bore interest at either 90 basis points over LIBOR or the higher of
the lender's prime rate or the Federal Funds rate plus 50 basis points. In
conjunction with obtaining the 2000 Unsecured Facility, the Operating
Partnership repaid in full and terminated the Unsecured Facility on June 22,
2000.
21
PRUDENTIAL FACILITY
The Operating Partnership has a revolving credit facility ("Prudential
Facility") with Prudential Securities Corp. ("PSC") in the amount of $100,000,
which currently bears interest at 110 basis points over one-month LIBOR, with a
maturity date of June 29, 2001. The Prudential Facility is a recourse liability
of the Operating Partnership and is secured by the Operating Partnership's
equity interest in Harborside Plazas 2 and 3. The Prudential Facility limits the
ability of the Operating Partnership to make any distributions during any fiscal
quarter in an amount in excess of 100 percent of the Operating Partnership's
available funds from operations (as defined) for the immediately preceding
fiscal quarter (except to the extent such excess distributions or dividends are
attributable to gains from the sale of the Operating Partnership's assets or are
required for the Corporation to maintain its status as a REIT under the Code);
provided, however, that the Operating Partnership may make distributions and pay
dividends in excess of 100 percent of available funds from operations (as
defined) for the preceding fiscal quarter for not more than three consecutive
quarters. In addition to the foregoing, the Prudential Facility limits the liens
placed upon the subject property and certain collateral, the use of proceeds
from the Prudential Facility, and the maintenance of ownership of the subject
property and assets derived from said ownership.
SUMMARY
As of September 30, 2000 and December 31, 1999, the Operating Partnership had
outstanding borrowings of $264,483 and $177,000, respectively, under its
revolving credit facilities (with aggregate borrowing capacity of $900,000 and
$1,100,000, respectively). The total outstanding borrowings were from the 2000
Unsecured Facility at September 30, 2000 and from the Unsecured Facility at
December 31, 1999, with no outstanding borrowings under the Prudential Facility.
10. MORTGAGES AND LOANS PAYABLE
September 30, December 31,
2000 1999
- --------------------------------------------------------------------------------
Portfolio Mortgages $150,000 $150,000
Property Mortgages 336,823 380,390
- --------------------------------------------------------------------------------
Total mortgages and loans payable $486,823 $530,390
================================================================================
PORTFOLIO MORTGAGES
TIAA MORTGAGE
The Operating Partnership had an aggregate $185,283 non-recourse mortgage loan
with Teachers Insurance and Annuity Association of America, with interest only
payable monthly at a fixed annual rate of 7.18 percent ("TIAA Mortgage"). The
TIAA Mortgage was secured and cross collateralized by 43 properties. The TIAA
Mortgage was prepayable in whole or in part subject to certain provisions,
including yield maintenance.
Using the proceeds from the issuance of $185,283 of senior unsecured notes on
August 2, 1999 (see Note 8), the Operating Partnership repaid in full and
retired the TIAA Mortgage.
$150,000 PRUDENTIAL MORTGAGE LOAN
The Operating Partnership has a $150,000, interest-only, non-recourse mortgage
loan from Prudential ("$150,000 Prudential Mortgage Loan"). The loan, which is
secured by 11 properties, has an effective annual interest rate of 7.10 percent
and a seven-year term. The Operating Partnership has the option to convert the
mortgage loan to unsecured debt as a result of the achievement of an investment
grade credit rating. The mortgage loan is prepayable in whole or in part subject
to certain provisions, including yield maintenance.
PROPERTY MORTGAGES
The Operating Partnership's property mortgages ("Property Mortgages") are
comprised of various non-recourse loans which are collateralized by certain of
the Operating Partnership's rental properties. Payments on Property Mortgages
are generally due in monthly installments of principal and interest, or interest
only.
22
A summary of the Property Mortgages as of September 30, 2000 and December 31,
1999 is as follows:
EFFECTIVE PRINCIPAL BALANCE AT
INTEREST SEPTEMBER 30, DECEMBER 31,
PROPERTY NAME LENDER RATE 2000 1999 MATURITY
- ---------------------------------------------------------------------------------------------------------------------
201 Commerce Drive Sun Life Assurance Co. 6.240% $ -- $ 1,059 09/01/00
3 & 5 Terri Lane First Union National Bank 6.220% 4,404 4,434 10/31/00
101 & 225 Executive Drive Sun Life Assurance Co. 6.270% 2,246 2,375 06/01/01
Mack-Cali Morris Plains Corestates Bank 7.510% 2,186 2,235 12/31/01
Mack-Cali Willowbrook CIGNA 8.670% 9,664 10,250 10/01/03
400 Chestnut Ridge Prudential Insurance Co. 9.440% 13,810 14,446 07/01/04
Mack-Cali Centre VI Principal Life Insurance Co. 6.865% 35,000 35,000 04/01/05
Mack-Cali Bridgewater I New York Life Ins. Co. 7.000% 23,000 23,000 09/10/05
Mack-Cali Woodbridge II New York Life Ins. Co. 7.500% 17,500 17,500 09/10/05
Mack-Cali Short Hills Prudential Insurance Co. 7.740% 26,076 26,604 10/01/05
500 West Putnam Avenue New York Life Ins. Co. 6.520% 10,259 10,784 10/10/05
Harborside - Plaza 1 U.S. West Pension Trust 5.610% 53,508 51,015 01/01/06
Harborside - Plaza 2 and 3 Northwestern Mutual Life Ins. 7.320% 96,492 98,985 01/01/06
Mack-Cali Airport Allstate Life Insurance Co. 7.050% 10,500 10,500 04/01/07
Kemble Plaza II Mitsubishi Tr & Bk Co. LIBOR+0.65% -- 40,025 01/31/08
Kemble Plaza I Mitsubishi Tr & Bk Co. LIBOR+0.65% 32,178 32,178 01/31/09
- ---------------------------------------------------------------------------------------------------------------------
Total Property Mortgages $336,823 $380,390
=====================================================================================================================
INTEREST RATE CONTRACTS
On May 24, 1995, the Operating Partnership entered into an interest rate swap
agreement with a commercial bank. The swap agreement fixed the Operating
Partnership's one-month LIBOR base to 6.285 percent per annum on a notional
amount of $24,000. The swap agreement expired in August 1999.
On January 23, 1996, the Operating Partnership entered into an interest rate
swap agreement with a commercial bank. The swap agreement fixed the Operating
Partnership's one-month LIBOR base to 5.265 percent per annum on a notional
amount of $26,000. The swap agreement expired in January 1999.
On November 20, 1997, the Operating Partnership entered into a forward treasury
rate lock agreement with a commercial bank. The agreement locked an interest
rate of 5.88 percent per annum for the interpolated seven-year U.S. Treasury
Note effective March 1, 1998, on a notional amount of $150,000. The agreement
was used to fix the interest rate on the $150,000 Prudential Mortgage Loan. On
March 2, 1998, the Operating Partnership paid $2,035 in settlement of the
agreement, which is being amortized to interest expense over the term of the
$150,000 Prudential Mortgage Loan.
On October 1, 1998, the Operating Partnership entered into a forward treasury
rate lock agreement with a commercial bank. The agreement locked an interest
rate of 4.089 percent per annum for the three-year U.S. Treasury Note effective
November 4, 1999, on a notional amount of $50,000. The agreement was used to fix
the Index Rate on $50,000 of the Harborside-Plaza 1 mortgage, for which the
interest rate was re-set to the three-year U.S. Treasury Note (5.82 percent)
plus 110 basis points for the three years beginning November 4, 1999 (see
"Property Mortgages: Harborside-Plaza 1"). The Operating Partnership received
$2,208 in settlement of the agreement, which is being amortized to interest
expense over the three year-period.
In connection with the issuance of the $600,000 face amount of Senior Unsecured
Notes in March 1999, the Operating Partnership entered into and settled forward
treasury rate lock agreements. These agreements were settled at a cost of
approximately $517, which is being amortized to interest expense over the terms
of the respective tranches.
23
SCHEDULED PRINCIPAL PAYMENTS
Scheduled principal payments and related weighted average annual interest rates
for the Operating Partnership's Senior Unsecured Notes (Note 8), revolving
credit facilities (Note 9) and mortgages and loans payable as of September 30,
2000 are as follows:
WEIGHTED AVG.
SCHEDULED PRINCIPAL INTEREST RATE OF
YEAR AMORTIZATION MATURITIES TOTAL FUTURE REPAYMENTS (A)
- ---------------------------------------------------------------------------------------------------------------
October through December 2000 $ 1,021 $ 4,400 $ 5,421 7.02%
2001 3,257 4,211 7,468 7.44%
2002 3,458 -- 3,458 8.20%
2003 3,518 456,577 460,095 7.37%
2004 2,332 309,863 312,195 7.34%
Thereafter 970 744,720 745,690 7.28%
===============================================================================================================
Totals/Weighted Average $ 14,556 $ 1,519,771 $ 1,534,327 7.32%
===============================================================================================================
(a) Assumes weighted average LIBOR at September 30, 2000 of 6.62 percent
in calculating revolving credit facility and other variable rate debt
interest rates.
Scheduled principal payments during the nine months ended September 30, 2000 and
1999 amounted to $2,288 and $2,621, respectively.
CASH PAID FOR INTEREST AND INTEREST CAPITALIZED
Cash paid for interest for the nine months ended September 30, 2000 and 1999 was
$93,903 and $76,902, respectively. Interest capitalized by the Operating
Partnership for the nine months ended September 30, 2000 and 1999 was $7,482 and
$4,726, respectively.
SUMMARY OF INDEBTEDNESS
As of September 30, 2000, the Operating Partnership's total indebtedness of
$1,534,327 (weighted average interest rate of 7.32 percent) was comprised of
$296,661 of revolving credit facility borrowings and other variable rate
mortgage debt (weighted average rate of 7.41 percent) and fixed rate debt of
$1,237,666 (weighted average rate of 7.24 percent).
As of December 31, 1999, the Operating Partnership's total indebtedness of
$1,490,175 (weighted average interest rate of 7.27 percent) was comprised of
$249,204 of revolving credit facility borrowings and other variable rate
mortgage debt (weighted average rate of 7.42 percent) and fixed rate debt of
$1,240,971 (weighted average rate of 7.24 percent).
11. PARTNERS' CAPITAL
Partners' capital in the accompanying financial statements of the Operating
Partnership relates to common units held by the Corporation in the Operating
Partnership, common units held by the limited partners, preferred units
("Preferred Units") held by the preferred unitholders of the Operating
Partnership, and warrants to purchase common units ("Units Warrants") in the
Operating Partnership issued in connection with the Operating Partnership's
December 1997 acquisition of 54 office properties ("Mack Properties") from the
Mack Company and Patriot American Office Group ("Mack Transaction").
Net income allocated to the preferred unitholders and limited partners reflects
their pro-rata share of net income and distributions.
24
COMMON STOCK
On August 6, 1998, the Board of Directors of the Corporation authorized a share
repurchase program under which the Corporation was permitted to purchase up to
$100,000 of the Corporation's outstanding common stock ("Repurchase Program").
Under the Repurchase Program, the Corporation purchased for constructive
retirement 1,869,200 shares of its outstanding common stock for an aggregate
cost of approximately $52,562 from August 1998 through December 1999.
Subsequently on September 13, 2000, the Board of Directors authorized an
increase to the Repurchase Program under which the Corporation is permitted to
purchase up to an additional $150,000 of the Corporation's outstanding common
stock above the $52,562 that had previously been purchased. Purchases could be
made from time to time in open market transactions at prevailing prices or
through privately negotiated transactions.
Since the increase of the Repurchase Program, the Corporation purchased for
constructive retirement 186,600 shares of its outstanding common stock for an
aggregate cost of approximately $5,237 from September 25, 2000 through September
30, 2000.
Through September 30, 2000, under the Repurchase Program, the Corporation
purchased for constructive retirement, a total of 2,055,800 shares of its
outstanding common stock for an aggregate cost of approximately $57,799.
Concurrent with these purchases, the Corporation sold to the Operating
Partnership 2,055,800 common units for approximately $57,799.
Subsequent to quarter end through November 1, 2000, the Corporation purchased
for constructive retirement 605,500 shares of its outstanding common stock for
an aggregate cost of approximately $16,451 under the Repurchase Program.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Corporation filed a registration statement with the SEC for the
Corporation's dividend reinvestment and stock purchase plan ("Plan") which was
declared effective in February 1999. The Plan commenced on March 1, 1999.
During the year ended December 31, 1999, 1,082 shares were issued and proceeds
of approximately $32 were received from stock purchases and/or dividend
reinvestments under the Plan. The proceeds of the shares issued were contributed
by the Corporation to the Operating Partnership in exchange for common units.
The Corporation did not issue any shares under the Plan during the nine months
ended September 30, 2000.
SHAREHOLDER RIGHTS PLAN
On June 10, 1999, the Board of Directors of the Corporation authorized a
dividend distribution of one preferred share purchase right ("Right") for each
outstanding share of common stock which were distributed to all holders of
record of the common stock on July 6, 1999. Each Right entitles the registered
holder to purchase from the Corporation one one-thousandth of a share of Series
A junior participating preferred stock, par value $0.01 per share ("Preferred
Shares"), at a price of $100.00 per one one-thousandth of a Preferred Share
("Purchase Price"), subject to adjustment as provided in the rights agreement.
The Rights expire on July 6, 2009, unless the expiration date is extended or the
Right is redeemed or exchanged earlier by the Corporation.
The Rights are attached to each share of common stock. The Rights are generally
exercisable only if a person or group becomes the beneficial owner of 15 percent
or more of the outstanding common stock or announces a tender offer for 15
percent or more of the outstanding common stock ("Acquiring Person"). In the
event that a person or group becomes an Acquiring Person, each holder of a Right
will have the right to receive, upon exercise, common stock having a market
value equal to two times the Purchase Price of the Right.
On June 27, 2000, the Corporation amended its shareholder rights plan to prevent
the triggering of such plan as a result of the Merger Agreement.
STOCK OPTION PLANS
In September 2000, the Corporation established the 2000 Employee Stock Option
Plan ("2000 Employee Plan") and the 2000 Director Stock Option Plan ("2000
Director Plan") under which a total of 2,700,000 shares (subject to adjustment)
of the Corporation's common stock have been reserved for issuance (2,500,000
shares under the 2000 Employee Plan and 200,000 shares under the 2000 Director
Plan. In 1994, and as subsequently amended, the Corporation established the
Mack-Cali Employee Stock Option Plan ("Employee Plan") and the Mack-Cali
Director Stock Option Plan ("Director Plan") under which a total of 5,380,188
shares (subject to adjustment) of the
25
Corporation's common stock have been reserved for issuance (4,980,188 shares
under the Employee Plan and 400,000 shares under the Director Plan). Stock
options granted under the Employee Plan in 1994 and 1995 have become exercisable
over a three-year period and those options granted under both the 2000
Employee Plan and Employee Plan in 1996, 1997, 1998, 1999 and 2000 become
exercisable over a five-year period. All stock options granted under both the
2000 Director Plan and Director Plan become exercisable in one year. All
options were granted at the fair market value at the dates of grant and have
terms of ten years. As of September 30, 2000 and December 31, 1999, the stock
options outstanding had a weighted average remaining contractual life of
approximately 7.3 and 7.4 years, respectively.
Information regarding the Corporation's stock option plans is summarized below:
Weighted
Shares Average
Under Exercise
Options Price
- -------------------------------------------------------------------------------------------
Outstanding at January 1, 1999 3,939,982 $33.22
Granted 426,400 $25.23
Exercised (47,583) $22.31
Lapsed or canceled (591,648) $36.92
- -------------------------------------------------------------------------------------------
Outstanding at December 31, 1999 3,727,151 $31.86
Granted 1,003,900 $26.72
Exercised (104,693) $20.93
Lapsed or canceled (385,062) $34.52
- -------------------------------------------------------------------------------------------
Outstanding at September 30, 2000 4,241,296 $30.67
===========================================================================================
Options exercisable at December 31, 1999 1,724,920 $29.78
Options exercisable at September 30, 2000 2,149,718 $31.24
- -------------------------------------------------------------------------------------------
Available for grant at December 31, 1999 662,878
Available for grant at September 30, 2000 2,749,140
- -------------------------------------------------------------------------------------------
STOCK WARRANTS
The Corporation has outstanding 380,000 warrants to purchase an equal number of
shares of common stock ("Stock Warrants") at $33 per share (the market price at
date of grant). Such warrants are all currently exercisable and expire on
January 31, 2007.
The Corporation also has outstanding 389,976 Stock Warrants to purchase an equal
number of shares of common stock at $38.75 per share (the market price at date
of grant). Such warrants vest equally over a five-year period through December
31, 2001 and expire on December 12, 2007.
As of September 30, 2000 and December 31, 1999, there were a total of 769,976
and 914,976 Stock Warrants outstanding, respectively. As of September 30, 2000
and December 31, 1999, there were 613,985 and 585,989 Stock Warrants
exercisable, respectively. During the nine months ended September 30, 2000 and
1999, 145,000 and no Stock Warrants were canceled, respectively. No Stock
Warrants have been exercised through September 30, 2000.
STOCK COMPENSATION
In July 1999, the Corporation entered into amended and restated employment
contracts with six of its then key executive officers which provided for, among
other things, compensation in the form of stock awards and associated tax
obligation payments. In addition, in December 1999, the Corporation granted
stock awards to certain other officers of the Corporation. In connection with
the stock awards (collectively, "Restricted Stock Awards"), the executive
officers and certain other officers are to receive up to a total of 211,593
shares of the Corporation's common stock vesting over a five-year period
contingent upon the Corporation meeting certain performance and/or stock price
appreciation objectives. The Restricted Stock Awards provided to the executive
officers and certain other officers were granted under the Employee Plan.
Effective January 1, 2000, 31,737 shares of the Corporation's common stock were
issued to the executive officers and certain other officers upon meeting the
required objectives. Pursuant to the Cali Agreement, an aggregate of 38,649
shares of the Corporation's common stock were issued to Brant Cali and John R.
Cali upon vesting of their remaining Restricted Stock Awards. For the nine
months ended September 30, 2000, 5,100 unvested Restricted Stock Awards were
canceled.
26
DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS
The Deferred Compensation Plan for Directors ("Deferred Compensation Plan"),
which commenced January 1, 1999, is a plan which allows non-employee directors
of the Corporation to elect to defer up to 100 percent of their annual retainer
fee into deferred stock units. The deferred stock units are convertible into an
equal number of shares of common stock upon the directors' termination of
service from the Board of Directors or a change in control of the Corporation,
as defined in the plan. Deferred stock units are credited to each director
quarterly using the closing price of the Corporation's common stock on the
applicable dividend record date for the respective quarter. Each participating
director's account is also credited for an equivalent amount of deferred stock
units based on the dividend rate for each quarter.
During 1999, 3,319 deferred stock units were earned. During the nine months
ended September 30, 2000, 3,196 deferred stock units were earned.
EARNINGS PER UNIT
FASB No. 128 requires a dual presentation of basic and diluted EPU on the face
of the income statement for all companies with complex capital structures even
where the effect of such dilution is not material. Basic EPU excludes dilution
and is computed by dividing net income available to common unitholders by the
weighted average number of units outstanding for the period. Diluted EPU
reflects the potential dilution that could occur if securities or other
contracts to issue common units were exercised or converted into common units.
The following information presents the Operating Partnership's results for the
three and nine month periods ended September 30, 2000 and 1999 in accordance
with FASB No. 128:
Three Months Ended September 30,
2000 1999
-------------------------------------------------------
Basic EPU Diluted EPU Basic EPU Diluted EPU
- --------------------------------------------------------------------------------------------------------------
Net income available to common unitholders $22,745 $22,745 $37,072 $37,072
Add: Net income attributable to
Operating Partnership - preferred units -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Adjusted net income $22,745 $22,745 $37,072 $37,072
==============================================================================================================
Weighted average units 66,729 66,914 66,893 67,113
- --------------------------------------------------------------------------------------------------------------
Per Unit $ 0.34 $ 0.34 $ 0.55 $ 0.55
==============================================================================================================
Nine Months Ended September 30,
2000 1999
-------------------------------------------------------
Basic EPU Diluted EPU Basic EPU Diluted EPU
--------- ----------- --------- -----------
Net income available to common unitholders $171,794 $171,794 $ 95,468 $ 95,468
Add: Net income attributable to
Operating Partnership - preferred units -- 11,562 -- --
- --------------------------------------------------------------------------------------------------------------
Adjusted net income $171,794 $183,356 $ 95,468 $ 95,468
==============================================================================================================
Weighted average units 66,595 73,276 67,025 67,294
- --------------------------------------------------------------------------------------------------------------
Per Unit $ 2.58 $ 2.50 $ 1.42 $ 1.42
==============================================================================================================
The following schedule reconciles the units used in the basic EPU calculation to
the units used in the diluted EPU calculation:
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
- --------------------------------------------------------------------------------------------------------------
Basic EPU Units: 66,729 66,893 66,595 67,025
Add: Operating Partnership - preferred units -- -- 6,504 --
(after conversion to common units)
Stock options 185 220 177 269
- --------------------------------------------------------------------------------------------------------------
Diluted EPU Units: 66,914 67,113 73,276 67,294
==============================================================================================================
27
Contingent Units and Restricted Stock Awards outstanding in 2000 and 1999, if
any, were not included in the computation of diluted EPU as such units were
anti-dilutive during each of the periods. Preferred Units outstanding in 1999
and three months ended September 30, 2000 were not included in the 1999 and
three months ended September 30, 2000 computation of diluted EPU as such units
were anti-dilutive during the periods.
Pursuant to the Repurchase Program, during 1999, the Corporation purchased for
constructive retirement 1,014,500 shares of its outstanding common stock for
approximately $27,500. Additionally, during the nine months ended September 30,
2000, the Corporation purchased for constructive retirement 186,600 shares of
its outstanding common stock for approximately $5,237. Concurrent with these
purchases, the Corporation sold an equivalent number of common units to the
Operating Partnership.
12. REDEEMABLE PARTNERSHIP UNITS
PREFERRED UNITS
In connection with the Mack Transaction in December 1997, the Operating
Partnership issued 15,237 Series A Preferred Units and 215,325 Series B
Preferred Units, with an aggregate value of $236,491. The Preferred Units have a
stated value of $1,000 per unit and are preferred as to assets over any class of
common units or other class of preferred units of the Operating Partnership,
based on circumstances per the applicable unit certificates.
The quarterly distribution on each Preferred Unit is an amount equal to the
greater of (i) $16.875 (representing 6.75 percent of the Preferred Unit stated
value of $1,000 on an annualized basis) or (ii) the quarterly distribution
attributable to a Preferred Unit determined as if such unit had been converted
into common units, subject to adjustment for customary anti-dilution rights.
Each of the Series A Preferred Units may be converted at any time into common
units at a conversion price of $34.65 per unit, and, after the one year
anniversary of the date of the Series A Preferred Units' initial issuance,
common units received pursuant to such conversion may be redeemed into common
stock. Each of the Series B Preferred Units may be converted at any time into
common units at a conversion price of $34.65 per unit, and, after the three year
anniversary of the date of the Series B Preferred Units' initial issuance,
common units received pursuant to such conversion may be redeemed into common
stock. Each of the common units are redeemable for an equal number of shares of
common stock.
During 1999, 20,952 Series A Preferred Units were converted into 604,675 common
units. During the nine months ended September 30, 2000, 6,180 Series A Preferred
Units were converted into 178,355 common units.
As of September 30, 2000, there were 223,124 Series B Preferred Units
outstanding (convertible into 6,439,366 common units). There were no Series A
Preferred Units outstanding as of September 30, 2000.
COMMON UNITS
Certain individuals and entities own common units in the Operating Partnership.
A common unit and a share of common stock of the General Partner have
substantially the same economic characteristics in as much as they effectively
share equally in the net income or loss of the Operating Partnership.
Common units are redeemable by the common unitholders at their option, subject
to certain restrictions, on the basis of one common unit for either one share of
common stock or cash equal to the fair market value of a share at the time of
the redemption. The General Partner has the option to deliver shares of common
stock in exchange for all or any portion of the cash requested. When a
unitholder redeems a common unit for common stock of the Corporation, limited
partners' capital is reduced and the General Partner's capital is increased.
Effective August 21, 1998, the partnership agreement was amended to vest this
right in the Operating Partnership, rather than in the General Partnership.
Common units held by the General Partner are not redeemable.
On June 4, 1999, in connection with the acquisition of a 0.1 percent interest in
the G&G Martco joint venture (see Note 4), the Operating Partnership issued 437
common units, valued at approximately $17.
On August 31, 1999, in connection with the acquisition of 28.1 acres of
developable land located in Roseland, New Jersey, the Operating Partnership
issued 121,624 common units, valued at approximately $3,345.
28
During 1999, an aggregate of 1,934,657 common units were redeemed for an
equivalent number of shares of common stock in the Corporation.
During 1999, the Operating Partnership also issued 275,046 common units, valued
at approximately $8,141, in connection with the achievement of certain
performance goals at the Mack Properties in redemption of an equivalent number
of contingent common units.
During the nine months ended September 30, 2000, an aggregate of 340,103 common
units were redeemed for an equivalent number of shares of common stock in the
Corporation.
As of September 30, 2000, there were 7,991,963 common units outstanding.
CONTINGENT COMMON & PREFERRED UNITS
In connection with the Mack Transaction in December 1997, 2,006,432 contingent
common units, 11,895 Series A contingent Preferred Units and 7,799 Series B
contingent Preferred Units were issued as contingent non-participating units
("Contingent Units"). Redemption of such Contingent Units occurred upon the
achievement of certain performance goals relating to certain of the Mack
Properties, specifically the achievement of certain leasing activity. When
Contingent Units are redeemed for common and Preferred Units, an adjustment to
the purchase price of certain of the Mack Properties is recorded, based on the
value of the units issued.
On account of certain of the performance goals at the Mack Properties having
been achieved during 1999, the Operating Partnership redeemed 275,046 contingent
common units and issued an equivalent number of common units, as indicated
above. There were no Contingent Units outstanding as of December 31, 1999.
UNIT WARRANTS
The Operating Partnership has 2,000,000 Unit Warrants outstanding. The Unit
Warrants are exercisable at $37.80 per common unit and expire on December 11,
2002.
13. MINORITY INTEREST IN CONSOLIDATED PARTIALLY-OWNED PROPERTIES
On December 28, 1999, the Operating Partnership sold an interest in six office
properties located in Parsippany, Morris County, New Jersey for $83,600. Amongst
other things, the operating agreements provide for a preferred return to the
joint venture members. On June 29, 2000, the Operating Partnership acquired a
100 percent interest in these properties and the Operating Partnership paid an
additional $836 to the minority interest member in excess of its investment.
On August 24, 2000, Morris V Realty L.L.C. and Morris VI Realty L.L.C.
acquired land in which SJP Properties has a minority interest amounting to
$1,925.
The Operating Partnership controls these operations and has consolidated the
financial position and results of operations of partially-owned properties in
the financial statements of the Operating Partnership. The equity interests of
the other members are reflected as minority interests: partially-owned
properties in the consolidated financial statements of the Operating
Partnership.
14. EMPLOYEE BENEFIT PLAN
All employees of the Corporation who meet certain minimum age and period of
service requirements are eligible to participate in a 401(k) defined
contribution plan (the "401(k) Plan"). The 401(k) Plan allows eligible employees
to defer up to 15 percent of their annual compensation, subject to certain
limitations imposed by federal law. The amounts contributed by employees are
immediately vested and non-forfeitable. The Corporation, at management's
discretion, may match employee contributions and/or make discretionary
contributions. Total expense recognized by the Operating Partnership for the
nine months ended September 30, 2000 and 1999 was $300 and $0, respectively.
29
15. COMMITMENTS AND CONTINGENCIES
TAX ABATEMENT AGREEMENTS
HARBORSIDE FINANCIAL CENTER
Pursuant to an agreement with the City of Jersey City, New Jersey obtained by
the former owner of the Harborside property in 1988 and assumed by the
Operating Partnership as part of the acquisition of the property in November
1996, the Operating Partnership is required to make payments in lieu of
property taxes ("PILOT") on its Harborside Plaza 2 and 3 properties. The
agreement, which commenced in 1990, is for a term of 15 years. Such PILOT is
equal to two percent of Total Project Costs, as defined, in year one and
increases by $75 per annum through year fifteen. Total Project Costs, as
defined, are $145,644. The PILOT totaled $2,002 and $1,955 for the nine months
ended September 30, 2000 and 1999, respectively. The Operating Partnership has
entered into a similar agreement with the City of Jersey City, New Jersey on
its Harborside Plaza 4-A property which was placed in service in September
2000.
GROUND LEASE AGREEMENTS
Future minimum rental payments under the terms of all non-cancelable ground
leases under which the Operating Partnership is the lessee, as of September 30,
2000, are as follows:
YEAR AMOUNT
- ------------------------------------------------------------------------------
October through December 2000 $ 133
2001 531
2002 531
2003 531
2004 534
Thereafter 22,532
- ------------------------------------------------------------------------------
Total $24,792
==============================================================================
Ground lease expense incurred during the nine months ended September 30, 2000
and 1999 amounted to $427 and $392, respectively.
OTHER
On April 19, 1999, the Corporation announced the following changes in the
membership of its Board of Directors and the identities, titles and
responsibilities of its executive officers: (i) Thomas A. Rizk resigned from the
Board of Directors, the Executive Committee of the Board of Directors, his
position as Chief Executive Officer and as an employee of the Corporation; (ii)
Mitchell E. Hersh was appointed Chief Executive Officer of the Corporation
simultaneous with his resignation from his positions as President and Chief
Operating Officer of the Corporation; (iii) Timothy M. Jones was appointed
President of the Corporation simultaneous with his resignation from his
positions as Executive Vice President and Chief Investment Officer of the
Corporation; and (iv) Brant Cali was appointed to the Board of Directors of the
Corporation to fill the remainder of Thomas A. Rizk's term as a Class III
Director and was appointed Chief Operating Officer of the Corporation, also
remaining as an Executive Vice President and Assistant Secretary of the
Corporation.
Pursuant to the terms of Mr. Rizk's employment agreement entered into with the
Corporation in December 1997 and an agreement entered into simultaneous with his
resigning from the Corporation, Mr. Rizk received a payment of approximately
$14,490 in April 1999, $500 in April 2000 and $500 annually over the next two
years. All costs associated with Mr. Rizk's resignation are included in
non-recurring charges for the nine months ended September 30, 1999.
On June 27, 2000, pursuant to the Cali agreement, both Brant Cali and John R.
Cali resigned their positions as officers of the Corporation and Brant Cali
resigned as director of the Corporation ("Cali Agreement"). As required by Brant
Cali and John R. Cali's amended and restated employment agreements, under the
Cali Agreement: (i) the Corporation paid $2,820 and $2,806 (less applicable
withholding) to Brant Cali and John R. Cali, respectively; and (ii) all options
to acquire shares of the Corporation's common stock and Restricted Stock Awards
held by Brant Cali and John R. Cali became fully vested on the effective date of
their resignations from the Corporation. All costs associated with Brant Cali
and John R. Cali's resignations are included in non-recurring charges for the
nine months ended September 30, 2000.
30
The Operating Partnership is a defendant in certain litigation arising in the
normal course of business activities. Management does not believe that the
resolution of these matters will have a materially adverse effect upon the
Operating Partnership.
16. TENANT LEASES
The Properties are leased to tenants under operating leases with various
expiration dates through 2016. Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the tenant's
proportionate share of and/or increases in real estate taxes and certain
operating costs, as defined, and the pass through of charges for electrical
usage.
17. SEGMENT REPORTING
The Operating Partnership operates in one business segment - real estate. The
Operating Partnership provides leasing, management, acquisition, development,
construction and tenant-related services for its portfolio. The Operating
Partnership does not have any foreign operations. The accounting policies of the
segments are the same as those described in Note 2, excluding straight-line rent
adjustments, depreciation and amortization and non-recurring charges.
The Operating Partnership evaluates performance based upon net operating income
from the combined properties in the segment.
31
Selected results of operations for the three and nine month periods ended
September 30, 2000 and 1999 and selected asset information as of September 30,
2000 and December 31, 1999 regarding the Operating Partnership's
operating segment are as follows:
Total Corporate & Total
Segment Other (e) Operating Partnership
- ------------------------------------------------------------------------------------------------------------------
TOTAL CONTRACT REVENUES (A):
Three months ended:
September 30, 2000 $ 137,920 $ 1,978 $ 139,898 (f)
September 30, 1999 135,350 594 135,944 (g)
Nine months ended:
September 30, 2000 $ 418,178 $ 4,998 $ 423,176 (h)
September 30, 1999 399,469 961 400,430 (i)
TOTAL OPERATING AND INTEREST EXPENSES (B):
Three months ended:
September 30, 2000 $ 48,365 $ 27,149 $ 75,514 (j)
September 30, 1999 46,130 28,982 75,112 (k)
Nine months ended:
September 30, 2000 $ 141,174 $ 83,267 $ 224,441 (l)
September 30, 1999 133,853 86,097 219,950 (m)
NET OPERATING INCOME (C):
Three months ended:
September 30, 2000 $ 89,555 $ (25,171) $ 64,384 (f) (j)
September 30, 1999 89,220 (28,388) 60,832 (g) (k)
Nine months ended:
September 30, 2000 $ 277,004 $ (78,269) $ 198,735 (h) (l)
September 30, 1999 265,616 (85,136) 180,480 (i) (m)
TOTAL ASSETS:
September 30, 2000 $ 3,570,130 $ 76,032 $ 3,646,162
December 31, 1999 3,576,806 52,795 3,629,601
TOTAL LONG-LIVED ASSETS (D):
September 30, 2000 $ 3,480,555 $ 46,942 $ 3,527,497
December 31, 1999 3,510,285 30,318 3,540,603
===================================================================================================================
(a) Total contract revenues represent all revenues during the period
(including the Operating Partnership's share of net income from
unconsolidated joint ventures), excluding adjustments for straight-lining
of rents and the Operating Partnership's share of straight-line rent
adjustments from unconsolidated joint ventures. All interest income is
excluded from segment amounts and is classified in Corporate & Other for
all periods.
(b) Total operating and interest expenses represent the sum of real estate
taxes, utilities, operating services, general and administrative and
interest expense. All interest expense (including for property-level
mortgages) is excluded from segment amounts and is classified in Corporate
& Other for all periods.
(c) Net operating income represents total contract revenues [as defined in
Note (a)] less total operating and interest expenses [as defined in Note
(b)] for the period.
(d) Long-lived assets are comprised of total rental property, unbilled rents
receivable and investments in unconsolidated joint ventures.
(e) Corporate & Other represents all corporate-level items (including interest
and other investment income, interest expense and non-property general and
administrative expense) as well as intercompany eliminations necessary to
reconcile to consolidated Operating Partnership totals.
(f) Excludes $3,520 of adjustments for straight-lining of rents and ($36) for
the Operating Partnership's share of straight-line rent adjustments from
unconsolidated joint ventures.
(g) Excludes $2,921 of adjustments for straight-lining of rents and $155 for
the Operating Partnership's share of straight-line rent adjustments from
unconsolidated joint ventures.
(h) Excludes $9,056 of adjustments for straight-lining of rents and $18 for
the Operating Partnership's share of straight-line rent adjustments from
unconsolidated joint ventures.
(i) Excludes $10,343 of adjustments for straight-lining of rents and $111 for
the Operating Partnership's share of straight-line rent adjustments from
unconsolidated joint ventures.
(j) Excludes $23,320 of depreciation and amortization and non-recurring
charges of $27,911.
(k) Excludes $22,967 of depreciation and amortization.
(l) Excludes $68,447 of depreciation and amortization and non-recurring
charges of $37,139.
(m) Excludes $67,401 of depreciation and amortization and non-recurring
charges of $16,458.
32
18. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities ("FASB No.
133"). FASB No. 133 is effective for all fiscal quarters of all fiscal years
beginning after June 15, 1999. In June 1999, the FASB delayed the implementation
date of FASB No. 133 by one year (January 1, 2001 for the Operating
Partnership). FASB No. 133 requires that all derivative instruments be recorded
on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. Management of the
Operating Partnership anticipates that, due to its limited use of derivative
instruments, the adoption of FASB No. 133 will not have a significant effect on
the Operating Partnership's results of operations or its financial position.
33
MACK-CALI REALTY, L.P. AND SUBSIDIARIES
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated
Financial Statements of Mack-Cali Realty, L.P. and the notes thereto. Certain
defined terms used herein have the meaning ascribed to them in the Consolidated
Financial Statements.
The following comparisons for the three and nine month periods ended September
30, 2000 ("2000"), as compared to the three and nine month periods ended
September 30, 1999 ("1999") make reference to the following: (i) the effect of
the "Same-Store Properties," which represents all in-service properties owned by
the Operating Partnership at June 30, 1999 (for the three-month period
comparisons), and which represents all in-service properties owned by the
Operating Partnership at December 31, 1998 (for the nine-month period
comparisons), all such properties being owned by the Operating Partnership for
the entirety of both periods being compared, (ii) the effect of the "Acquired
Properties," which represents all properties acquired or placed in service by
the Operating Partnership from July 1, 1999 through September 30, 2000 (for the
three-month period comparisons), and which represents all properties acquired or
placed in service by the Operating Partnership from January 1, 1999 through
September 30, 2000 (for the nine-month period comparisons), and (iii) the effect
of the "Dispositions," which represents the Operating Partnership's sales of
rental property during the respective periods.
34
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1999
Quarter Ended
September 30, Dollar Percent
(IN THOUSANDS) 2000 1999 Change Change
- ---------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $ 123,600 $ 118,086 $ 5,514 4.7%
Escalations and recoveries from tenants 13,763 14,829 (1,066) (7.2)
Parking and other 3,534 5,112 (1,578) (30.9)
- ---------------------------------------------------------------------------------------------------
Sub-total 140,897 138,027 2,870 2.1
Equity in earnings of
unconsolidated joint ventures 2,194 834 1,360 163.1
Interest income 291 159 132 83.0
- ---------------------------------------------------------------------------------------------------
Total revenues 143,382 139,020 4,362 3.1
- ---------------------------------------------------------------------------------------------------
PROPERTY EXPENSES:
Real estate taxes 15,732 14,849 883 5.9
Utilities 11,604 11,634 (30) (0.3)
Operating services 16,855 16,464 391 2.4
- ---------------------------------------------------------------------------------------------------
Sub-total 44,191 42,947 1,244 2.9
General and administrative 5,461 5,691 (230) (4.0)
Depreciation and amortization 23,320 22,967 353 1.5
Interest expense 25,862 26,474 (612) (2.3)
Non-recurring charges 27,911 -- 27,911 --
- ---------------------------------------------------------------------------------------------------
Total expenses 126,745 98,079 28,666 29.2
- ---------------------------------------------------------------------------------------------------
Income before gain on sales of
rental property 16,637 40,941 (24,304) (59.4)
Gain on sales of rental property 10,036 -- 10,036 --
- ---------------------------------------------------------------------------------------------------
Net income 26,673 40,941 (14,268) (34.9)
Preferred unit distributions (3,928) (3,869) (59) (1.5)
- ---------------------------------------------------------------------------------------------------
Net income available to
common unitholders $ 22,745 $ 37,072 $ (14,327) (38.6)%
===================================================================================================
35
The following is a summary of the changes in revenue from rental operations and
property expenses divided into Same-Store Properties, Acquired Properties, and
Dispositions (in thousands):
Total Same-Store Acquired
Operating Partnership Properties Properties Dispositions
--------------------- ---------- ---------- ------------
Dollar Percent Dollar Percent Dollar Percent Dollar Percent
Change Change Change Change Change Change Change Change
- ----------------------------------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $ 5,514 4.7% $ 5,248 4.5% $ 5,941 5.0% $ (5,675) (4.8)%
Escalations and recoveries
from tenants (1,066) (7.2) 308 2.0 380 2.6 (1,754) (11.8)
Parking and other (1,578) (30.9) (1,387) (27.2) 54 1.1 (245) (4.8)
- ----------------------------------------------------------------------------------------------------------------------------
Totals $ 2,870 2.1% $ 4,169 3.1% $ 6,375 4.6% $ (7,674) (5.6)%
============================================================================================================================
PROPERTY EXPENSES:
Real estate taxes $ 883 5.9% $ 717 4.8% $ 678 4.5% $ (512) (3.4)%
Utilities (30) (0.3) 11 0.1 491 4.2 (532) (4.6)
Operating services 391 2.4 380 2.3 801 4.9 (790) (4.8)
- ----------------------------------------------------------------------------------------------------------------------------
Totals $ 1,244 2.9% $ 1,108 2.6% $ 1,970 4.6% $ (1,834) (4.3)%
============================================================================================================================
OTHER DATA:
Number of Consolidated Properties 256 243 13 6
Square feet (in thousands) 26,986 25,523 1,463 1,629
Base rents for the Same-Store Properties increased $5.2 million, or 4.5 percent,
for 2000 as compared to 1999, due primarily to rental rate and portfolio
occupancy increases in 2000. Escalations and recoveries from tenants for the
Same-Store Properties increased $0.3 million, or 2.0 percent, for 2000 over
1999, due primarily to the recovery of an increased amount of total property
expenses, as well as additional settle-up billings during the same period in
2000. Parking and other income for the Same-Store Properties decreased $1.4
million, or 27.2 percent, due primarily to fewer lease termination fees in 2000.
Real estate taxes on the Same-Store Properties increased $0.7 million, or 4.8
percent, for 2000 as compared to 1999, due primarily to property tax rate
increases in certain municipalities in 2000. Utilities for the Same-Store
Properties were relatively unchanged in 2000 as compared to 1999. Operating
services for the Same-Store Properties increased $0.4 million, or 2.3 percent,
due primarily to increased maintenance costs.
Equity in earnings of unconsolidated joint ventures increased $1.4 million, or
163.1 percent, in 2000 as compared to 1999. This is due primarily to properties
developed by joint ventures being placed in service in 2000 (see Note 4 to the
Financial Statements).
Interest income increased $0.1 million, or 83.0 percent, for 2000 as compared to
1999, due primarily to income from a mortgage receivable in 2000.
General and administrative expense decreased by $0.2 million, or 4.0 percent,
for 2000 as compared to 1999. This decrease is due primarily to decreased
payroll and related costs in 2000.
Depreciation and amortization increased by $0.4 million, or 1.5 percent, for
2000 over 1999. Of this increase, $1.0 million or 4.2 percent, is attributable
to the Acquired Properties, and $0.6 million, or 2.4 percent, due to the
Same-Store Properties, partially offset by a decrease of $1.2 million, or 5.1
percent, due to the Dispositions.
Interest expense decreased $0.6 million, or 2.3 percent, for 2000 as compared to
1999. This decrease is due primarily to the retirement of a mortgage in
connection with the sale of 412 Mt. Kemble Avenue in June 2000.
Non-recurring charges of $27.9 million were incurred in 2000 as a result of
costs associated with the termination of the Prentiss merger agreement (see Note
3 to the Financial Statements).
36
Income before gain on sales of rental property decreased to $16.6 million in
2000 from $40.9 million in 1999. The decrease of approximately $24.3 million is
due to the factors discussed above.
Net income available to common unitholders decreased by $14.4 million, from
$37.1 million in 1999 to $22.7 million in 2000. This decrease was a result of a
decrease in income before gain on sales of rental property of $24.3 million and
an increase in preferred unit distributions of $0.1 million. This was partially
offset by gain on sales of rental property of $10.0 million in 2000.
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1999
Nine Months Ended
September 30, Dollar Percent
(IN THOUSANDS) 2000 1999 Change Change
- ---------------------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $ 367,270 $350,665 $16,605 4.7%
Escalations and recoveries from tenants 45,058 46,055 (997) (2.2)
Parking and other 12,984 12,073 911 7.5
- ---------------------------------------------------------------------------------------------------------------
Sub-total 425,312 408,793 16,519 4.0
Equity in earnings of
unconsolidated joint ventures 4,401 1,462 2,939 201.0
Interest income 2,537 629 1,908 303.3
- ---------------------------------------------------------------------------------------------------------------
Total revenues 432,250 410,884 21,366 5.2
- ---------------------------------------------------------------------------------------------------------------
PROPERTY EXPENSES:
Real estate taxes 45,169 42,900 2,269 5.3
Utilities 31,997 31,055 942 3.0
Operating services 51,419 50,980 439 0.9
- ---------------------------------------------------------------------------------------------------------------
Sub-total 128,585 124,935 3,650 2.9
General and administrative 16,733 19,222 (2,489) (12.9)
Depreciation and amortization 68,447 67,401 1,046 1.6
Interest expense 79,123 75,793 3,330 4.4
Non-recurring charges 37,139 16,458 20,681 125.7
- ---------------------------------------------------------------------------------------------------------------
Total expenses 330,027 303,809 26,218 8.6
- ---------------------------------------------------------------------------------------------------------------
Income before gain on sales
of rental property
and minority interest 102,223 107,075 (4,852) (4.5)
Gain on sales of rental property 86,205 -- 86,205 --
- ---------------------------------------------------------------------------------------------------------------
Income before minority interest 188,428 107,075 81,353 76.0
Minority interest in consolidated
partially-owned properties 5,072 -- 5,072 --
- ---------------------------------------------------------------------------------------------------------------
Net income 183,356 107,075 76,281 71.2
Preferred unit distributions (11,562) (11,607) 45 0.4
- ---------------------------------------------------------------------------------------------------------------
Net income available to
common unitholders $ 171,794 $ 95,468 $76,326 79.9%
===============================================================================================================
37
The following is a summary of the changes in revenue from rental operations and
property expenses divided into Same-Store Properties, Acquired Properties and
Dispositions (in thousands):
Total Same-Store Acquired
Operating Partnership Properties Properties Dispositions
--------------------- ---------- ---------- ------------
Dollar Percent Dollar Percent Dollar Percent Dollar Percent
Change Change Change Change Change Change Change Change
- --------------------------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $ 16,605 4.7% $11,728 3.3% $ 14,577 4.2% $ (9,700) (2.8)%
Escalations and recoveries
from tenants (997) (2.2) 898 1.9 968 2.1 (2,863) (6.2)
Parking and other 911 7.5 1,253 10.3 116 1.0 (458) (3.8)
- ------------------------------------------------------------------------------------------------------------------
Totals $ 16,519 4.0% $13,879 3.4% $ 15,661 3.8% $(13,021) (3.2)%
==================================================================================================================
PROPERTY EXPENSES:
Real estate taxes $ 2,269 5.3% $ 1,601 3.7% $ 1,611 3.8% $ (943) (2.2)%
Utilities 942 3.0 1,044 3.3 957 3.1 (1,059) (3.4)
Operating services 439 0.9 (406) (0.7) 2,313 4.5 (1,468) (2.9)
- ------------------------------------------------------------------------------------------------------------------
Totals $ 3,650 2.9% $ 2,239 1.8% $ 4,881 3.9% $ (3,470) (2.8)%
==================================================================================================================
OTHER DATA:
Number of Consolidated Properties 256 238 18 6
Square feet (in thousands) 26,986 25,205 1,781 1,629
Base rents for the Same-Store Properties increased $11.7 million, or 3.3
percent, for 2000 as compared to 1999, due primarily to rental rate and
portfolio occupancy increases in 2000. Escalations and recoveries from tenants
for the Same-Store Properties increased $0.9 million, or 1.9 percent, for 2000
over 1999, due primarily to the recovery of an increased amount of total
property expenses, as well as additional settle-up billings in 2000. Parking and
other income for the Same-Store Properties increased $1.3 million, or 10.3
percent, due primarily to increased lease termination fees in 2000.
Real estate taxes on the Same-Store Properties increased $1.6 million, or 3.7
percent, for 2000 as compared to 1999, due primarily to property tax rate
increases in certain municipalities in 2000. Utilities for the Same-Store
Properties increased $1.0 million, or 3.3 percent, for 2000 as compared to 1999,
due primarily to increased usage in 2000. Operating services for the Same-Store
Properties decreased $0.4 million, or 0.7 percent, due primarily to decreased
property management payroll costs.
Equity in earnings of unconsolidated joint ventures increased $2.9 million, or
201.0 percent, in 2000 as compared to 1999. This is due primarily to properties
developed by joint ventures being placed in service in 2000 (see Note 4 to the
Financial Statements).
Interest income increased $1.9 million, or 303.3 percent, for 2000 as compared
to 1999, due primarily to the effect of proceeds from the Dispositions in 2000
being invested in cash and cash equivalents as well as income from a mortgage
receivable in 2000.
General and administrative expense decreased by $2.5 million, or 12.9 percent,
for 2000 as compared to 1999. This decrease is due primarily to decreased
payroll and related costs in 2000.
Depreciation and amortization increased by $1.0 million, or 1.6 percent, for
2000 over 1999. Of this increase, $2.5 million, or 3.8 percent, is attributable
to the Acquired Properties and $1.5 million, or 2.3 percent, due to the
Same-Store Properties, partially offset by a decrease of $3.0 million, or 4.5
percent, due to the Dispositions.
Interest expense increased $3.3 million, or 4.4 percent, for 2000 as compared to
1999. This increase is due primarily to the replacement in 1999 of short-term
credit facility borrowings with long-term fixed rate unsecured notes. This was
partially offset by the retirement of a mortgage in connection with the sale of
412 Kemble Avenue in June 2000.
38
Non-recurring charges of $37.1 million were incurred in 2000, as a result of
costs associated with the termination of the Prentiss merger agreement (see Note
3 to the Financial Statements) in September 2000 and costs associated with the
resignations of Brant Cali and John R. Cali (see Note 15 to the Financial
Statements) in June 2000. Non-recurring charges of $16.5 million were incurred
in 1999, as a result of the resignation of Thomas A. Rizk (see Note 15 to the
Financial Statements).
Income before gain on sales of rental property and minority interest decreased
to $102.2 million in 2000 from $107.1 million in 1999. The decrease of
approximately $4.9 million is due to the factors discussed above.
Net income available to common unitholders increased by $76.3 million, from
$95.5 million in 1999 to $171.8 million in 2000. This increase was a result of a
gain on sales of rental property of $86.2 million in 2000 and a decrease in
preferred unit distributions of $0.1 million. This was partially offset by a
decrease in 2000 in income before gain on sales of rental property and minority
interest of $4.9 million and an increase in 2000 in minority interests of $5.1
million.
LIQUIDITY AND CAPITAL RESOURCES
STATEMENT OF CASH FLOWS
During the nine months ended September 30, 2000, the Operating Partnership
generated $128.2 million in cash flows from operating activities, and together
with $551.6 million in borrowings from the Operating Partnership's revolving
credit facilities, $281.2 million in proceeds from sales of rental property,
$10.8 million in distributions received from unconsolidated joint ventures, $2.2
million in proceeds from stock options exercised and $0.6 million from
restricted cash, used an aggregate of approximately $974.6 million to acquire
properties and land parcels and pay for other tenant and building improvements
totaling $224.8 million, repay outstanding borrowings on its revolving credit
facilities and other mortgage debt of $507.7 million, pay quarterly dividends
and distributions of $127.5 million, invest $12.7 million in unconsolidated
joint ventures, distribute $88.7 million to minority interest in partially-owned
properties, pay financing costs of $6.1 million, repurchase 186,600 shares of
the Corporation's outstanding common stock for $5.2 million and increase the
Operating Partnership's cash and cash equivalents by $1.9 million.
CAPITALIZATION
In September 2000, the Operating Partnership announced plans to implement a
highly focused growth strategy geared to attractive opportunities in
high-barrier-to-entry markets, including locations such as California, but
primarily predicated on the Operating Partnership's strong presence in the
Northeast region. Consistent with this strategy, the Operating Partnership plans
to sell substantially all of its properties located in the Southwestern and
Western regions, using such proceeds to invest in property acquisitions and
development projects in its core Northeast markets, as well as fund stock
repurchases and repay debt.
Consistent with its growth strategy, in October 2000, the Operating Partnership
started construction of a 915,000 square-foot office property, to be known as
Plaza 5, at its Harborside Financial Center office complex in Jersey City,
Hudson County, New Jersey. The total cost of the project is estimated to be
approximately $260 million and is anticipated to be completed in third quarter
2002. Additionally, in November, the Operating Partnership, through a joint
venture with Columbia Development Corp., will start construction of a 575,000
square-foot office property, to be known as Plaza 10, on land owned by the joint
venture located adjacent to the Operating Partnership's Harborside complex. The
total cost of the project is estimated to be approximately $140 million and is
anticipated to be completed in third quarter 2002. Prior to commencement of
construction, the joint venture signed a 15-year lease with Charles Schwab for
300,000 square feet of Plaza 10, representing 52 percent of the project. The
lease agreement obligates the Operating Partnership, among other things, to
deliver space to the tenant by required timelines and offers expansion options,
at the tenant's election, to additional space in Plaza 10, or, if not available,
in any adjacent Harborside projects. Such options may obligate the Operating
Partnership to construct an additional building at Harborside if vacant space is
not available in any of its existing Harborside properties. Should the Operating
Partnership be unable to or choose not to provide such expansion space, the
Operating Partnership could be liable to Schwab for its actual damages, in no
event to exceed $15.0 million. The Operating Partnership expects to finance its
funding requirements under both Plazas 5 and 10 projects through drawing on its
revolving credit facilities, construction financing, or through joint venture
arrangements.
39
On August 6, 1998, the Board of Directors of the Corporation authorized a
Repurchase Program under which the Corporation was permitted to purchase up to
$100.0 million of the Corporation's outstanding common stock. Under the
Repurchase Program, the Corporation purchased for constructive retirement
1,869,200 shares of its outstanding common stock for an aggregate cost of
approximately $52.6 million from August 1998 through December 1999. Subsequently
on September 13, 2000, the Board of Directors authorized an increase to the
Repurchase Program under which the Corporation is permitted to purchase up to an
additional $150.0 million of the Corporation's outstanding common stock above
the $52.6 million that had previously been purchased. Purchases could be made
from time to time in open market transactions at prevailing prices or through
privately negotiated transactions.
Through November 1, 2000, the Corporation purchased for constructive retirement
2,661,300 shares of its outstanding common stock for an aggregate cost of
approximately $74.3 million under the Repurchase Program. The Corporation has
authorization to repurchase up to an additional $128.3 million of its
outstanding common stock under the Repurchase Program.
As of September 30, 2000, the Operating Partnership's total indebtedness of $1.5
billion (weighted average interest rate of 7.32 percent) was comprised of $296.7
million of revolving credit facility borrowings and other variable rate mortgage
debt (weighted average rate of 7.41 percent) and fixed rate debt of $1.2 billion
(weighted average rate of 7.24 percent).
As of September 30, 2000, the Operating Partnership had outstanding borrowings
of $264.5 million under its revolving credit facilities (with aggregate
borrowing capacity of $900.0 million). The total outstanding borrowings were
from the 2000 Unsecured Facility, with no outstanding borrowings under the
Prudential Facility. The interest rate on outstanding borrowings under the 2000
Unsecured Facility is currently LIBOR plus 80 basis points. The Operating
Partnership may instead elect an interest rate representing the higher of the
lender's prime rate or the Federal Funds rate plus 50 basis points. In the event
of a change in the Operating Partnership's unsecured debt rating, the interest
rate will be changed on a sliding scale. The 2000 Unsecured Facility also
requires a 20 basis point facility fee on the current borrowing capacity payable
quarterly in arrears. Subject to certain conditions, the Operating Partnership
has the ability to increase the borrowing capacity of the 2000 Unsecured
Facility up to $1.0 billion. The 2000 Unsecured Facility matures in June 2003,
with an extension option of one year, which would require a payment of 25 basis
points of the then borrowing capacity of the credit line upon exercise. The
Prudential Facility carries an interest rate of 110 basis points over LIBOR and
matures in June 2001.
The terms of the 2000 Unsecured Facility include certain restrictions and
covenants which limit, among other things, the payment of dividends (as
discussed below), the incurrence of additional indebtedness, the incurrence of
liens and the disposition of assets, and which require compliance with financial
ratios relating to the maximum leverage ratio, the maximum amount of secured
indebtedness, the minimum amount of tangible net worth, the minimum amount of
debt service coverage, the minimum amount of fixed charge coverage, the maximum
amount of unsecured indebtedness, the minimum amount of unencumbered property
debt service coverage and certain investment limitations. The dividend
restriction referred to above provides that, except to enable the Corporation to
continue to qualify as a REIT under the Code, the Corporation will not during
any four consecutive fiscal quarters make distributions with respect to common
stock or other equity interests in an aggregate amount in excess of 90 percent
of funds from operations (as defined) for such period, subject to certain other
adjustments.
The terms of the Operating Partnership's unsecured corporate debt include
certain restrictions and covenants which require compliance with financial
ratios relating to the maximum amount of debt leverage, the maximum amount of
secured indebtedness, the minimum amount of debt service coverage and the
maximum amount of unsecured debt as a percent of unsecured assets.
The Operating Partnership has three investment grade credit ratings. Standard &
Poor's Rating Services ("S&P") and Fitch IBCA ("Fitch") have each assigned their
BBB rating to existing and prospective senior unsecured debt of the Operating
Partnership. S&P and Fitch have also assigned their BBB- rating to prospective
preferred stock offerings of the Corporation. Moody's Investors Service has
assigned its Baa3 rating to the existing and prospective senior unsecured debt
of the Operating Partnership and its Ba1 rating to prospective preferred stock
offerings of the Corporation.
As of September 30, 2000, the Operating Partnership had 227 unencumbered
properties, totaling 20.4 million square feet, representing 76.0 percent of the
Operating Partnership's total portfolio on a square footage basis.
40
The Operating Partnership and Corporation have an effective shelf registration
statement with the SEC for an aggregate of $2.0 billion in debt securities,
preferred stock and preferred stock represented by depositary shares, under
which the Operating Partnership has issued an aggregate of $785.3 million of
unsecured corporate debt.
Historically, rental revenue has been the principal source of funds to pay
operating expenses, debt service and capital expenditures, excluding
non-recurring capital expenditures. Management believes that the Operating
Partnership will have access to the capital resources necessary to expand and
develop its business. To the extent that the Operating Partnership's cash flow
from operating activities is insufficient to finance its non-recurring capital
expenditures such as property acquisition and construction project costs and
other capital expenditures, the Operating Partnership expects to finance such
activities through borrowings under its revolving credit facilities and other
debt and equity financing.
The Operating Partnership expects to meet its short-term liquidity requirements
generally through its working capital and net cash provided by operating
activities, along with the 2000 Unsecured Facility and the Prudential Facility.
The Operating Partnership is frequently examining potential property
acquisitions and construction projects and, at any given time, one or more of
such acquisitions or construction projects may be under consideration.
Accordingly, the ability to fund property acquisitions and construction projects
is a major part of the Operating Partnership's financing requirements. The
Operating Partnership expects to meet its financing requirements through funds
generated from operating activities, proceeds from property sales, long-term or
short-term borrowings (including draws on the Operating Partnership's revolving
credit facilities) and the issuance of additional debt or equity securities.
As of September 30, 2000, the Operating Partnership's total debt had a weighted
average term to maturity of 4.7 years. The Operating Partnership does not intend
to reserve funds to retire the Operating Partnership's unsecured corporate debt,
Harborside mortgages, $150.0 Million Prudential Mortgage Loan, its other
property mortgages or other long-term mortgages and loans payable upon maturity.
Instead, the Operating Partnership will seek to refinance such debt at maturity
or retire such debt through the issuance of additional equity or debt
securities. The Operating Partnership is reviewing various refinancing options,
including the issuance of additional unsecured corporate debt, preferred stock,
and/or obtaining additional mortgage debt, some or all of which may be completed
during 2000. The Operating Partnership anticipates that its available cash and
cash equivalents and cash flows from operating activities, together with cash
available from borrowings and other sources, will be adequate to meet the
Operating Partnership's capital and liquidity needs both in the short and
long-term. However, if these sources of funds are insufficient or unavailable,
the Operating Partnership's ability to make the expected distributions discussed
below may be adversely affected.
To maintain its qualification as a REIT, the Corporation must make annual
distributions to its stockholders of at least 95 percent of its REIT taxable
income, determined without regard to the dividends paid deduction and by
excluding net capital gains. The Corporation currently relies on the
distributions it receives from the Operating Partnership to make distributions
to its stockholders. Moreover, the Operating Partnership intends to continue to
make regular quarterly distributions to its unitholders which, based upon
current policy, in the aggregate would equal approximately $161.4 million on an
annualized basis. However, any such distribution, would only be paid out of
available cash after meeting operating requirements, scheduled debt service on
mortgages and loans payable, and preferred unit distributions.
41
SIGNIFICANT TENANTS
The following table sets forth a schedule of the Operating Partnership's 20
largest tenants for the Consolidated Properties as of September 30, 2000, based
upon annualized base rents:
Percentage of Percentage of
Annualized Operating Partnership Square Total Year of
Number of Base Rental Annualized Base Feet Operating Partnership Lease
Properties Revenue ($)(1) Rental Revenue(%) Leased Leased Sq. Ft. (%) Expiration
- ------------------------------------------------------------------------------------------------------------------------------------
Donaldson, Lufkin &
Jenrette Securities Corp. 1 8,316,096 1.7 271,953 1.1 2011
AT&T Wireless Services 2 8,199,960 1.7 382,030 1.5 2007 (2)
AT&T Corporation 3 8,030,828 1.7 516,546 2.0 2009 (3)
Keystone Mercy Health Plan 3 7,429,219 1.6 325,843 1.3 2015 (4)
IBM Corporation 4 7,028,473 1.5 362,753 1.4 2007 (5)
Prentice-Hall Inc. 1 6,744,495 1.4 474,801 1.9 2014
Allstate Insurance Company 9 5,863,006 1.2 270,154 1.0 2009 (6)
Nabisco Inc. 3 5,694,073 1.2 310,243 1.2 2005 (7)
Toys 'R' Us - NJ, Inc. 1 5,342,672 1.1 242,518 0.9 2012
Waterhouse Securities, Inc. 1 5,253,555 1.1 184,222 0.7 2015
American Institute of Certified
Public Accountants 1 4,981,357 1.0 249,768 1.0 2012
Board of Gov./Federal Reserve 1 4,705,391 1.0 117,008 0.5 2009 (8)
Dean Witter Trust Company 1 4,319,507 0.9 221,019 0.9 2008
Winston & Strawn 1 4,302,008 0.9 108,100 0.4 2003
CMP Media Inc. 1 4,206,598 0.9 206,274 0.8 2014
KPMG Peat Marwick, LLP 2 3,824,080 0.8 161,760 0.6 2007 (9)
Move.com Operations, Inc. 1 3,701,763 0.8 94,917 0.4 2006
Bank of Tokyo - Mitsubishi Ltd. 1 3,378,924 0.7 137,076 0.5 2009
Bankers Trust Harborside Inc. 1 3,272,500 0.7 385,000 1.5 2003
Cendant Operations Inc. 1 3,117,051 0.7 148,431 0.6 2008
- ------------------------------------------------------------------------------------------------------------------------------------
Totals 107,711,556 22.6 5,170,416 20.2
====================================================================================================================================
(1) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000,
annualized base rental revenue is based on the first full month's billing
times 12. As annualized base rental revenue is not derived from historical
GAAP results, historical results may differ from those set forth above.
(2) 12,150 square feet expire September 2004; 345,799 square feet expire March
2007; 24,081 square feet expire June 2007.
(3) 66,268 square feet expire December 2000; 63,278 square feet expire May
2004; 387,000 square feet expire January 2009.
(4) 22,694 square feet expire January 2003; 303,149 square feet expire April
2015.
(5) 1,065 square feet expire November 2000; 28,289 square feet expire January
2002; 85,000 square feet expire December 2005; 248,399 square feet expire
December 2007.
(6) 22,444 square feet expire July 2001; 47,364 square feet expire September
2002; 18,882 square feet expire April 2003; 2,867 square feet expire
January 2004; 36,305 square feet expire January 2005; 23,024 square feet
expire October 2005; 6,108 square feet expire August 2006; 70,517 square
feet expire June 2007; 31,143 square feet expire April 2008; 11,500 square
feet expire April 2009.
(7) 9,865 square feet expire September 2001; 300,378 square feet expire
December 2005.
(8) 94,719 square feet expire May 2005; 22,289 square feet expire July 2009.
(9) 104,556 square feet expire September 2002; 57,204 square feet expire July
2007.
42
SCHEDULE OF LEASE EXPIRATIONS
The following table sets forth a schedule of the lease expirations for the total
of the Operating Partnership's office, office/flex, industrial/warehouse and
stand-alone retail properties, included in the Consolidated Properties,
beginning October 1, 2000, assuming that none of the tenants exercise renewal
options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring(1) (Sq. Ft.) Leases (%)(2) Leases ($)(3) Leases($) Leases(%)
- ------------------------------------------------------------------------------------------------------------------------------
2000.......... 148 894,766 3.5 15,187,953 16.97 3.2
2001.......... 509 2,676,232 10.4 42,714,473 15.96 8.9
2002.......... 526 3,476,104 13.6 60,234,599 17.33 12.6
2003.......... 479 3,845,066 15.0 66,571,285 17.31 14.0
2004.......... 338 2,344,632 9.1 44,880,367 19.14 9.4
2005.......... 313 3,061,998 11.9 60,416,528 19.73 12.7
2006.......... 124 1,562,751 6.1 32,853,037 21.02 6.9
2007.......... 70 1,552,681 6.1 32,440,045 20.89 6.8
2008.......... 42 1,100,853 4.3 18,528,030 16.83 3.9
2009.......... 36 1,127,196 4.4 21,791,717 19.33 4.6
2010.......... 71 1,080,376 4.2 21,925,633 20.29 4.6
2011 and thereafter 58 2,935,854 11.4 58,980,091 20.09 12.4
- ------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 2,714 25,658,509 100.0 476,523,758 18.57 100.0
==============================================================================================================================
(1) Includes office, office/flex, industrial/warehouse and stand-alone retail
property tenants only. Excludes leases for amenity, retail, parking and
month-to-month tenants. Some tenants have multiple leases.
(2) Excludes all unleased space as of September 30, 2000.
(3) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
(4) Reconciliation to Operating Partnership's total net rentable square footage
is as follows:
Square Feet Percentage of Total
----------- -------------------
Square footage leased to commercial tenants 25,658,509 95.1%
Square footage used for corporate offices, management offices,
building use, retail tenants, food services, other ancillary
service tenants and occupancy adjustments 427,751 1.6
Square footage unleased 900,096 3.3
----------- ---------
Total net rentable square footage (does not include
residential, land lease, retail or not-in-service properties) 26,986,356 100.0%
========== ==========
43
SCHEDULE OF LEASE EXPIRATIONS: OFFICE PROPERTIES
The following table sets forth a schedule of the lease expirations for the
office properties beginning October 1, 2000, assuming that none of the tenants
exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring(1) (Sq. Ft.) Leases(%)(2) Leases($)(3) Leases($) Leases(%)
- -------------------------------------------------------------------------------------------------------------------------------
2000.......... 115 666,211 3.2 12,422,310 18.65 2.9
2001.......... 425 2,052,625 9.7 36,358,740 17.71 8.5
2002.......... 420 2,597,727 12.3 51,074,486 19.66 12.0
2003.......... 399 3,198,170 15.1 60,219,181 18.83 14.2
2004.......... 286 1,815,421 8.6 38,790,477 21.37 9.1
2005.......... 259 2,600,424 12.3 54,815,528 21.08 12.9
2006.......... 105 1,285,488 6.1 28,350,841 22.05 6.7
2007.......... 62 1,417,250 6.7 30,468,811 21.50 7.2
2008.......... 37 933,806 4.4 17,378,500 18.61 4.1
2009.......... 26 996,136 4.7 19,963,197 20.04 4.7
2010.......... 53 855,944 4.1 18,703,411 21.85 4.4
2011 and thereafter 51 2,714,830 12.8 56,415,731 20.78 13.3
- -------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 2,238 21,134,032 100.0 424,961,213 20.11 100.0
===============================================================================================================================
(1) Includes office tenants only. Excludes leases for amenity, retail, parking
and month-to-month office tenants. Some tenants have multiple leases.
(2) Excludes all unleased space as of September 30, 2000.
(3) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
44
SCHEDULE OF LEASE EXPIRATIONS: OFFICE/FLEX PROPERTIES
The following table sets forth a schedule of the lease expirations for the
office/flex properties beginning October 1, 2000, assuming that none of the
tenants exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring(1) (Sq. Ft.) Leases(%)(2) Leases($)(3) Leases($) Leases(%)
- ------------------------------------------------------------------------------------------------------------------------------
2000.......... 30 227,220 5.5 2,748,747 12.10 5.8
2001.......... 81 614,160 14.9 6,263,456 10.20 13.2
2002.......... 104 831,937 20.2 8,659,361 10.41 18.3
2003.......... 76 548,922 13.3 5,850,986 10.66 12.3
2004.......... 41 319,791 7.7 3,597,398 11.25 7.6
2005.......... 51 448,420 10.9 5,419,124 12.08 11.4
2006.......... 19 277,263 6.7 4,502,196 16.24 9.5
2007.......... 8 135,431 3.3 1,971,234 14.56 4.2
2008.......... 5 167,047 4.0 1,149,530 6.88 2.4
2009.......... 9 119,260 2.9 1,722,320 14.44 3.6
2010.......... 18 224,432 5.4 3,222,222 14.36 6.8
2011 and thereafter 6 213,024 5.2 2,299,360 10.79 4.9
- ------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 448 4,126,907 100.0 47,405,934 11.49 100.0
==============================================================================================================================
(1) Includes office/flex tenants only. Excludes leases for amenity, retail,
parking and month-to-month office/flex tenants. Some tenants have multiple
leases.
(2) Excludes all unleased space as of September 30, 2000.
(3) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
45
SCHEDULE OF LEASE EXPIRATIONS: INDUSTRIAL/WAREHOUSE PROPERTIES
The following table sets forth a schedule of the lease expirations for the
industrial/warehouse properties beginning October 1, 2000, assuming that none of
the tenants exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring(1) (Sq. Ft.) Leases(%)(2) Leases($)(3) Leases($) Leases(%)
- ----------------------------------------------------------------------------------------------------------------------------
2000.......... 3 1,335 0.3 16,896 12.66 0.5
2001.......... 3 9,447 2.5 92,277 9.77 2.5
2002.......... 2 46,440 12.2 500,752 10.78 13.5
2003.......... 4 97,974 25.8 501,118 5.11 13.6
2004.......... 10 200,120 52.6 2,297,492 11.48 62.1
2005.......... 3 13,154 3.5 181,876 13.83 4.9
2009.......... 1 11,800 3.1 106,200 9.00 2.9
- ----------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 26 380,270 100.0 3,696,611 9.72 100.0
============================================================================================================================
(1) Includes industrial/warehouse tenants only. Excludes leases for amenity,
retail, parking and month-to-month industrial/warehouse tenants. Some
tenants have multiple leases.
(2) Excludes all unleased space as of September 30, 2000.
(3) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
the historical results may differ from those set forth above.
SCHEDULE OF LEASE EXPIRATIONS: STAND-ALONE RETAIL PROPERTIES
The following table sets forth a schedule of the lease expirations for the
stand-alone retail properties beginning October 1, 2000, assuming that none of
the tenants exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring(1) (Sq. Ft.) Leases(%) Leases($)(2) Leases($) Leases(%)
- -----------------------------------------------------------------------------------------------------------------------------
2004.......... 1 9,300 53.8 195,000 20.97 42.4
2012 ......... 1 8,000 46.2 265,000 33.12 57.6
- -----------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 2 17,300 100.0 460,000 26.59 100.0
=============================================================================================================================
(1) Includes stand-alone retail property tenants only.
(2) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
46
INDUSTRY DIVERSIFICATION
The following table lists the Operating Partnership's 30 largest industry
classifications based on annualized contractual base rent of the Consolidated
Properties:
Percentage of
Annualized Percentage of Total Operating
Base Rental Operating Partnership Square Partnership
Revenue Annualized Base Feet Leased
Industry Classification(3) ($)(1)(2) Rental Revenue(%) Leased Sq. Ft.(%)
- ------------------------------------------------------------------------------------------------------------------------------------
Securities, Commodity Contracts & Other Financial 55,729,695 11.7 2,432,166 9.5
Manufacturing 45,708,719 9.6 2,783,481 10.8
Computer System Design Svcs. 33,084,068 6.9 1,741,300 6.8
Telecommunications 33,039,867 6.9 1,916,338 7.5
Insurance Carriers & Related Activities 32,862,919 6.9 1,691,347 6.6
Legal Services 28,284,033 5.9 1,290,600 5.0
Credit Intermediation & Related Activities 22,207,798 4.7 1,292,770 5.0
Health Care & Social Assistance 21,182,902 4.4 1,092,651 4.3
Wholesale Trade 17,242,929 3.6 1,258,651 4.9
Accounting/Tax Prep. 16,003,515 3.4 756,209 2.9
Other Professional 14,220,519 3.0 854,137 3.3
Retail Trade 14,065,403 3.0 835,520 3.3
Information Services 13,351,863 2.8 620,886 2.4
Publishing Industries 12,477,476 2.6 554,908 2.2
Arts, Entertainment & Recreation 11,127,747 2.3 762,687 3.0
Public Administration 10,342,969 2.2 364,158 1.4
Transportation 8,942,683 1.9 681,303 2.7
Other Services (except Public Administration) 8,884,731 1.9 692,497 2.7
Advertising/Related Services 8,834,682 1.8 416,075 1.6
Real Estate & Rental & Leasing 8,071,699 1.7 406,442 1.6
Management/Scientific 7,619,815 1.6 383,322 1.5
Management of Companies & Finance 7,004,618 1.5 358,259 1.4
Architectural/Engineering 6,719,221 1.4 350,015 1.4
Scientific Research/Development 6,314,351 1.3 361,423 1.4
Data Processing Services 6,089,948 1.3 279,577 1.1
Construction 4,673,760 1.0 261,426 1.0
Educational Services 3,738,237 0.8 210,296 0.8
Utilities 3,709,825 0.8 181,388 0.7
Specialized Design Services 3,444,366 0.7 163,686 0.6
Admin. & Support, Waste Mgt. & Remediation Svc. 3,423,484 0.7 226,448 0.9
Other 8,119,916 1.7 438,543 1.7
- ------------------------------------------------------------------------------------------------------------------------------------
Totals 476,523,758 100.0 25,658,509 100.0
====================================================================================================================================
(1) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000,
annualized base rental revenue is based on the first full month's billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above.
(2) Includes office, office/flex, industrial/warehouse and stand-alone retail
tenants only. Excludes leases for amenity, retail, parking and
month-to-month office tenants. Some tenants have multiple leases.
(3) The Operating Partnership's tenants are classified according to the U.S.
Government's new North American Industrial Classification System (NAICS)
which has replaced the Standard Industrial Code (SIC) system.
47
MARKET DIVERSIFICATION
The following table lists the Operating Partnership's 25 largest markets (MSAs),
based on annualized contractual base rent of the Consolidated Properties:
Annualized Percentage of
Base Rental Operating Partnership Total
Revenue Annualized Base Property Size Percentage of
Market (MSA) ($)(1)(2) Rental Revenue(%) Rentable Area Rentable Area(%)
- ------------------------------------------------------------------------------------------------------------------------------------
Bergen-Passaic, NJ 82,647,106 17.4 4,530,091 16.8
New York, NY (Westchester-Rockland Counties) 79,852,486 16.8 4,696,178 17.4
Newark, NJ (Essex-Morris-Union Counties) 72,472,482 15.2 3,444,598 12.8
Jersey City, NJ 42,369,281 8.9 2,094,470 7.8
Philadelphia, PA-NJ 38,159,668 8.0 2,710,346 10.0
Washington, DC-MD-VA 18,961,873 4.0 616,549 2.3
Denver, CO 17,158,536 3.6 1,007,931 3.7
Middlesex-Somerset-Hunterdon, NJ 14,943,187 3.1 791,051 2.9
Dallas, TX 14,887,035 3.1 959,463 3.6
Trenton, NJ (Mercer County) 12,175,360 2.6 672,365 2.5
San Francisco, CA 12,137,821 2.5 450,891 1.7
San Antonio, TX 11,882,673 2.5 940,302 3.5
Stamford-Norwalk, CT 9,254,783 1.9 527,250 1.9
Houston, TX 8,761,211 1.8 700,008 2.6
Monmouth-Ocean, NJ 7,272,457 1.5 577,423 2.1
Nassau-Suffolk, NY 5,762,698 1.2 261,849 1.0
Phoenix-Mesa, AZ 5,535,201 1.2 416,967 1.5
Tampa-St. Petersburg-Clearwater, FL 3,645,220 0.8 297,429 1.1
Boulder-Longmont, CO 3,600,741 0.8 270,421 1.0
Bridgeport, CT 3,260,251 0.7 145,487 0.5
Omaha, NE-IA 3,050,207 0.6 319,535 1.2
Colorado Springs, CO 2,810,124 0.6 209,987 0.8
Dutchess County, NY 2,217,687 0.5 118,727 0.4
Atlantic-Cape May, NJ 1,464,090 0.3 80,344 0.3
Fort Worth-Arlington, TX 1,102,116 0.2 74,429 0.3
Other 1,139,464 0.2 72,265 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Totals 476,523,758 100.0 26,986,356 100.0
====================================================================================================================================
(1) Annualized base rental revenue is based on actual September 2000 billings
times 12. For leases whose rent commences after October 1, 2000, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
(2) Includes office, office/flex, industrial/warehouse and stand-alone retail
tenants only. Excludes leases for amenity, retail, parking and
month-to-month office tenants. Some tenants have multiple leases.
48
PROPERTY LISTING
OFFICE PROPERTIES
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- ------------------------------------------------------------------------------------------------------------------------------
ATLANTIC COUNTY, NEW JERSEY
EGG HARBOR
100 Decadon Drive........................... 1987 40,422 100.0 784 0.16 19.40
200 Decadon Drive........................... 1991 39,922 95.3 732 0.15 19.24
BERGEN COUNTY, NEW JERSEY
FAIR LAWN
17-17 Route 208 North....................... 1987 143,000 96.0 3,476 0.70 25.32
FORT LEE
One Bridge Plaza............................ 1981 200,000 92.9 4,711 0.95 25.36
2115 Linwood Avenue......................... 1981 68,000 99.7 947 0.19 13.97
LITTLE FERRY
200 Riser Road.............................. 1974 286,628 100.0 1,885 0.38 6.58
MONTVALE
95 Chestnut Ridge Road...................... 1975 47,700 100.0 570 0.12 11.95
135 Chestnut Ridge Road..................... 1981 66,150 99.7 801 0.16 12.15
PARAMUS
15 East Midland Avenue...................... 1988 259,823 100.0 6,636 1.34 25.54
461 From Road............................... 1988 253,554 99.8 6,028 1.22 23.82
650 From Road............................... 1978 348,510 100.0 7,485 1.52 21.48
140 Ridgewood Avenue........................ 1981 239,680 100.0 5,212 1.06 21.75
61 South Paramus Avenue..................... 1985 269,191 100.0 5,953 1.21 22.11
ROCHELLE PARK
120 Passaic Street.......................... 1972 52,000 99.6 750 0.15 14.48
365 West Passaic Street..................... 1976 212,578 92.4 3,802 0.77 19.36
UPPER SADDLE RIVER
1 Lake Street...............................1973/94 474,801 100.0 7,466 1.51 15.72
10 Mountainview Road........................ 1986 192,000 100.0 3,877 0.78 20.19
WOODCLIFF LAKE
400 Chestnut Ridge Road..................... 1982 89,200 100.0 2,130 0.43 23.88
470 Chestnut Ridge Road..................... 1987 52,500 100.0 1,192 0.24 22.70
530 Chestnut Ridge Road..................... 1986 57,204 100.0 1,166 0.24 20.38
50 Tice Boulevard........................... 1984 235,000 100.0 4,744 0.96 20.19
300 Tice Boulevard.......................... 1991 230,000 100.0 5,014 1.02 21.80
BURLINGTON COUNTY, NEW JERSEY
MOORESTOWN
224 Strawbridge Drive....................... 1984 74,000 98.1 1,261 0.26 17.37
228 Strawbridge Drive....................... 1984 74,000 100.0 1,434 0.29 19.38
ESSEX COUNTY, NEW JERSEY
MILLBURN
150 J.F. Kennedy Parkway.................... 1980 247,476 100.0 5,860 1.19 23.68
ROSELAND
101 Eisenhower Parkway...................... 1980 237,000 95.1 4,158 0.84 18.45
103 Eisenhower Parkway...................... 1985 151,545 100.0 3,295 0.67 21.74
HUDSON COUNTY, NEW JERSEY
JERSEY CITY
95 Christopher Columbus Drive (7)........... 1989 n/a n/a 7,000 1.42 n/a
Harborside Financial Center Plaza 1......... 1983 400,000 99.0 3,311 0.67 8.36
Harborside Financial Center Plaza 2......... 1990 761,200 100.0 18,228 3.69 23.95
Harborside Financial Center Plaza 3......... 1990 725,600 100.0 17,375 3.52 23.95
Harborside Financial Center Plaza 4-A (4)... 2000 207,670 88.7 3,306 0.67 31.49(8)
SEE FOOTNOTES ON PAGE 59.
49
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
MERCER COUNTY, NEW JERSEY
PRINCETON
400 Alexander Road (6)........... 1987 n/a n/a 148 0.03 n/a
103 Carnegie Center.............. 1984 96,000 100.0 2,286 0.46 23.81
100 Overlook Center ............. 1988 149,600 68.6 3,659 0.74 35.65
5 Vaughn Drive................... 1987 98,500 100.0 2,297 0.47 23.32
MIDDLESEX COUNTY, NEW JERSEY
EAST BRUNSWICK
377 Summerhill Road.............. 1977 40,000 100.0 374 0.08 9.33
PLAINSBORO
500 College Road East............ 1984 158,235 100.0 3,402 0.69 21.50
SOUTH BRUNSWICK
3 Independence Way............... 1983 111,300 100.0 2,186 0.44 19.64
WOODBRIDGE
581 Main Street.................. 1991 200,000 100.0 4,645 0.94 23.23
MONMOUTH COUNTY, NEW JERSEY
NEPTUNE
3600 Route 66.................... 1989 180,000 100.0 2,413 0.49 13.41
WALL TOWNSHIP
1305 Campus Parkway.............. 1988 23,350 76.1 486 0.10 27.35
1350 Campus Parkway.............. 1990 79,747 99.9 1,358 0.27 17.05
MORRIS COUNTY, NEW JERSEY
FLORHAM PARK
325 Columbia Turnpike............ 1987 168,144 100.0 4,119 0.83 24.50
MORRIS PLAINS
201 Littleton Road............... 1979 88,369 100.0 1,831 0.37 20.72
250 Johnson Road................. 1977 75,000 100.0 1,174 0.24 15.65
MORRIS TOWNSHIP
340 Mt. Kemble Avenue............ 1985 387,000 100.0 5,529 1.12 14.29
412 Mt. Kemble Avenue (7)........ 1986 n/a n/a 4,755 0.96 n/a
PARSIPPANY
7 Campus Drive................... 1982 154,395 100.0 2,553 0.52 16.54
8 Campus Drive .................. 1987 215,265 100.0 5,365 1.09 24.92
2 Dryden Way..................... 1990 6,216 100.0 68 0.01 10.94
4 Gatehall Drive (4)............. 1988 248,480 92.3 5,819 1.18 25.37
2 Hilton Court................... 1991 181,592 99.7 4,633 0.94 25.59
600 Parsippany Road.............. 1978 96,000 100.0 1,446 0.29 15.06
1 Sylvan Way..................... 1989 150,557 100.0 3,519 0.71 23.37
5 Sylvan Way..................... 1989 151,383 100.0 3,448 0.70 22.78
7 Sylvan Way..................... 1987 145,983 100.0 2,920 0.59 20.00
PASSAIC COUNTY, NEW JERSEY
CLIFTON
777 Passaic Avenue............... 1983 75,000 70.1 966 0.21 18.37
TOTOWA
999 Riverview Drive.............. 1988 56,066 100.0 948 0.19 16.91
WAYNE
201 Willowbrook Boulevard........ 1970 178,329 99.0 2,422 0.49 13.72
SEE FOOTNOTES ON PAGE 59.
50
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
SOMERSET COUNTY, NEW JERSEY
BASKING RIDGE
222 Mt. Airy Road................ 1986 49,000 100.0 744 0.15 15.18
233 Mt. Airy Road................ 1987 66,000 100.0 762 0.15 11.55
BERNARDS TOWNSHIP
106 Allen Road (4)............... 2000 132,010 72.5 960 0.19 25.31(8)
BRIDGEWATER
721 Route 202/206................ 1989 192,741 100.0 4,152 0.84 21.54
UNION COUNTY, NEW JERSEY
CLARK
100 Walnut Avenue................ 1985 182,555 100.0 4,617 0.93 25.29
CRANFORD
6 Commerce Drive................. 1973 56,000 90.3 954 0.19 18.87
11 Commerce Drive................ 1981 90,000 91.2 1,031 0.21 12.56
12 Commerce Drive................ 1967 72,260 96.3 610 0.12 8.77
20 Commerce Drive................ 1990 176,600 98.8 3,962 0.80 22.71
65 Jackson Drive................. 1984 82,778 100.0 1,571 0.32 18.98
NEW PROVIDENCE
890 Mountain Road................ 1977 80,000 100.0 2,054 0.42 25.68
- ---------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE 11,430,809 98.0 236,775 47.95 21.14
- ---------------------------------------------------------------------------------------------------------------
DUTCHESS COUNTY, NEW YORK
FISHKILL
300 South Lake Drive............. 1987 118,727 98.3 2,176 0.44 18.64
NASSAU COUNTY, NEW YORK
NORTH HEMPSTEAD
111 East Shore Road.............. 1980 55,575 100.0 1,516 0.31 27.28
600 Community Drive.............. 1983 206,274 100.0 4,820 0.98 23.37
ROCKLAND COUNTY, NEW YORK
SUFFERN
400 Rella Boulevard.............. 1988 180,000 100.0 3,616 0.73 20.09
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
100 Clearbrook Road.............. 1975 60,000 100.0 960 0.19 16.00
101 Executive Boulevard.......... 1971 50,000 79.5 806 0.16 20.28
555 Taxter Road (4).............. 1986 170,554 100.0 4,029 0.82 23.62
565 Taxter Road (4).............. 1988 170,554 85.4 3,235 0.66 22.21
570 Taxter Road.................. 1972 75,000 95.0 1,405 0.28 19.72
HAWTHORNE
30 Saw Mill River Road........... 1982 248,400 100.0 5,216 1.06 21.00
1 Skyline Drive.................. 1980 20,400 99.0 261 0.05 12.92
2 Skyline Drive.................. 1987 30,000 98.9 510 0.10 17.19
17 Skyline Drive................. 1989 85,000 100.0 1,234 0.25 14.52
7 Skyline Drive.................. 1987 109,000 100.0 2,157 0.44 19.79
TARRYTOWN
200 White Plains Road............ 1982 89,000 88.1 1,718 0.35 21.91
220 White Plains Road............ 1984 89,000 99.4 2,049 0.41 23.16
WHITE PLAINS
1 Barker Avenue.................. 1975 68,000 96.3 1,604 0.32 24.49
3 Barker Avenue.................. 1983 65,300 93.3 1,265 0.26 20.76
50 Main Street................... 1985 309,000 100.0 7,710 1.56 24.95
11 Martine Avenue................ 1987 180,000 100.0 4,520 0.92 25.11
1 Water Street................... 1979 45,700 99.8 1,020 0.21 22.36
SEE FOOTNOTES ON PAGE 59.
51
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
YONKERS
1 Executive Boulevard............ 1982 112,000 100.0 2,379 0.48 21.24
3 Executive Plaza................ 1987 58,000 100.0 1,403 0.28 24.19
- ---------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE 2,595,484 97.7 55,609 11.26 21.93
- ---------------------------------------------------------------------------------------------------------------
CHESTER COUNTY, PENNSYLVANIA
BERWYN
1000 Westlakes Drive............. 1989 60,696 93.0 1,481 0.30 26.24
1055 Westlakes Drive............. 1990 118,487 100.0 2,298 0.47 19.39
1205 Westlakes Drive............. 1988 130,265 99.8 2,880 0.58 22.15
1235 Westlakes Drive............. 1986 134,902 99.7 3,155 0.64 23.46
DELAWARE COUNTY, PENNSYLVANIA
LESTER
100 Stevens Drive................ 1986 95,000 100.0 1,161 0.24 12.22
200 Stevens Drive................ 1987 208,000 100.0 3,900 0.79 18.75
300 Stevens Drive................ 1992 68,000 93.3 1,282 0.26 20.21
MEDIA
1400 Providence Road - Center I.. 1986 100,000 81.3 1,780 0.36 21.89
1400 Providence Road - Center II. 1990 160,000 80.3 3,026 0.61 23.55
MONTGOMERY COUNTY, PENNSYLVANIA
LOWER PROVIDENCE
1000 Madison Avenue.............. 1990 100,700 100.0 1,890 0.38 18.77
PLYMOUTH MEETING
1150 Plymouth Meeting Mall....... 1970 167,748 89.4 2,746 0.56 18.31
Five Sentry Parkway East......... 1984 91,600 100.0 1,499 0.30 16.36
Five Sentry Parkway West......... 1984 38,400 100.0 676 0.14 17.60
- ---------------------------------------------------------------------------------------------------------------
TOTAL PENNSYLVANIA OFFICE 1,473,798 94.7 27,774 5.63 19.89
- ---------------------------------------------------------------------------------------------------------------
FAIRFIELD COUNTY, CONNECTICUT
GREENWICH
500 West Putnam.................. 1973 121,250 98.3 2,865 0.58 24.04
NORWALK
40 Richards Avenue............... 1985 145,487 99.2 2,885 0.58 19.99
SHELTON
1000 Bridgeport Avenue........... 1986 133,000 94.9 2,243 0.45 17.77
- ---------------------------------------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE 399,737 97.5 7,993 1.61 20.51
- ---------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA
WASHINGTON
1201 Connecticut Avenue, NW...... 1940 169,549 96.6 4,864 0.98 29.70
1400 L Street, NW................ 1987 159,000 98.7 5,871 1.19 37.41
1709 New York Avenue, NW......... 1972 166,000 100.0 7,209 1.46 43.43
- ---------------------------------------------------------------------------------------------------------------
TOTAL DISTRICT OF COLUMBIA OFFICE 494,549 98.4 17,944 3.63 36.87
- ---------------------------------------------------------------------------------------------------------------
SEE FOOTNOTES ON PAGE 59.
52
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
PRINCE GEORGE'S COUNTY, MARYLAND
LANHAM
4200 Parliament Place............ 1989 122,000 92.9 2,443 0.49 21.55
- ---------------------------------------------------------------------------------------------------------------
TOTAL MARYLAND OFFICE 122,000 92.9 2,443 0.49 21.55
- ---------------------------------------------------------------------------------------------------------------
BEXAR COUNTY, TEXAS
SAN ANTONIO
200 Concord Plaza Drive.......... 1986 248,700 94.8 4,339 0.88 18.40
1777 N.E. Loop 410............... 1986 256,137 91.1 3,728 0.75 15.98
84 N.E. Loop 410................. 1971 187,312 89.9 2,530 0.51 15.02
111 Soledad...................... 1918 248,153 93.0 2,519 0.51 10.92
COLLIN COUNTY, TEXAS
PLANO
555 Republic Place............... 1986 97,889 80.8 1,464 0.30 18.51
DALLAS COUNTY,TEXAS
DALLAS
3030 LBJ Freeway................. 1984 367,018 95.4 6,438 1.30 18.39
3100 Monticello.................. 1984 173,837 93.8 2,723 0.55 16.70
8214 Westchester................. 1983 95,509 81.3 1,292 0.26 16.64
IRVING
2300 Valley View................. 1985 142,634 88.6 2,057 0.42 16.28
RICHARDSON
1122 Alma Road................... 1977 82,576 100.0 607 0.12 7.35
HARRIS COUNTY, TEXAS
HOUSTON
14511 Falling Creek.............. 1982 70,999 98.8 891 0.18 12.70
5225 Katy Freeway................ 1983 112,213 93.3 1,494 0.30 14.27
5300 Memorial.................... 1982 155,099 99.3 2,219 0.45 14.41
1717 St. James Place............. 1975 109,574 91.7 1,349 0.27 13.43
1770 St. James Place............. 1973 103,689 89.3 1,398 0.28 15.10
10497 Town & Country Way......... 1981 148,434 77.6 1,824 0.37 15.84
POTTER COUNTY, TEXAS
AMARILLO
6900 IH - 40 West (7)............ 1986 n/a n/a 320 0.06 n/a
TARRANT COUNTY, TEXAS
EULESS
150 West Parkway................. 1984 74,429 95.9 1,044 0.21 14.63
TRAVIS COUNTY, TEXAS
AUSTIN
1250 Capital of Texas Hwy.
South (7)...................... 1985 n/a n/a 5,682 1.15 n/a
- ---------------------------------------------------------------------------------------------------------------
TOTAL TEXAS OFFICE 2,674,202 91.8 43,918 8.87 17.88
- ---------------------------------------------------------------------------------------------------------------
SEE FOOTNOTES ON PAGE 59.
53
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
MARICOPA COUNTY, ARIZONA
GLENDALE
5551 West Talavi Boulevard....... 1991 181,596 100.0 1,613 0.33 8.88
PHOENIX
19640 North 31st Street.......... 1990 124,171 100.0 1,192 0.24 9.60
20002 North 19th Avenue (6)...... 1986 n/a n/a 137 0.04 n/a
SCOTTSDALE
9060 E. Via Linda Boulevard...... 1984 111,200 100.0 2,408 0.49 21.65
- ---------------------------------------------------------------------------------------------------------------
TOTAL ARIZONA OFFICE 416,967 100.0 5,350 1.10 12.83
- ---------------------------------------------------------------------------------------------------------------
ARAPAHOE COUNTY, COLORADO
AURORA
750 South Richfield Street....... 1997 108,240 100.0 2,911 0.59 26.89
DENVER
400 South Colorado Boulevard..... 1983 125,415 97.8 2,134 0.43 17.40
ENGLEWOOD
9359 East Nichols Avenue......... 1997 72,610 100.0 903 0.18 12.44
5350 South Roslyn Street......... 1982 63,754 96.2 1,068 0.22 17.41
BOULDER COUNTY, COLORADO
BROOMFIELD
105 South Technology Court....... 1997 37,574 100.0 547 0.11 14.56
303 South Technology Court-A..... 1997 34,454 100.0 427 0.09 12.39
303 South Technology Court-B..... 1997 40,416 100.0 427 0.09 10.57
LOUISVILLE
1172 Century Drive............... 1996 49,566 100.0 568 0.12 11.46
248 Centennial Parkway........... 1996 39,266 100.0 567 0.11 14.44
285 Century Place................ 1997 69,145 100.0 1,115 0.23 16.13
DENVER COUNTY, COLORADO
DENVER
3600 South Yosemite.............. 1974 133,743 100.0 1,291 0.26 9.65
DOUGLAS COUNTY, COLORADO
ENGLEWOOD
384 Inverness Drive South........ 1985 51,523 100.0 820 0.17 15.92
400 Inverness Drive.............. 1997 111,608 99.9 2,759 0.56 24.75
67 Inverness Drive East.......... 1996 54,280 100.0 674 0.14 12.42
5975 South Quebec Street......... 1996 102,877 99.8 2,374 0.48 23.12
PARKER
9777 Pyramid Court............... 1995 120,281 100.0 1,323 0.27 11.00
EL PASO COUNTY, COLORADO
COLORADO SPRINGS
8415 Explorer.................... 1998 47,368 100.0 602 0.12 12.71
1975 Research Parkway............ 1997 115,250 100.0 1,680 0.34 14.58
2375 Telstar Drive............... 1998 47,369 100.0 602 0.12 12.71
SEE FOOTNOTES ON PAGE 59.
54
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
JEFFERSON COUNTY, COLORADO
LAKEWOOD
141 Union Boulevard.............. 1985 63,600 98.9 1,087 0.22 17.28
- ---------------------------------------------------------------------------------------------------------------
TOTAL COLORADO OFFICE 1,488,339 99.6 23,879 4.85 16.11
- ---------------------------------------------------------------------------------------------------------------
SAN FRANCISCO COUNTY, CALIFORNIA
SAN FRANCISCO
795 Folsom Street (4)............ 1977 183,445 100.0 5,468 1.11 29.81
760 Market Street................ 1908 267,446 96.8 8,148 1.65 31.47
- ---------------------------------------------------------------------------------------------------------------
TOTAL CALIFORNIA OFFICE 450,891 98.1 13,616 2.76 30.78
- ---------------------------------------------------------------------------------------------------------------
HILLSBOROUGH COUNTY, FLORIDA
TAMPA
501 Kennedy Boulevard............ 1982 297,429 91.4 3,861 0.78 14.20
- ---------------------------------------------------------------------------------------------------------------
TOTAL FLORIDA OFFICE 297,429 91.4 3,861 0.78 14.20
- ---------------------------------------------------------------------------------------------------------------
POLK COUNTY, IOWA
WEST DES MOINES
2600 Westown Parkway............. 1988 72,265 100.0 1,127 0.23 15.60
- ---------------------------------------------------------------------------------------------------------------
TOTAL IOWA OFFICE 72,265 100.0 1,127 0.23 15.60
- ---------------------------------------------------------------------------------------------------------------
DOUGLAS COUNTY, NEBRASKA
OMAHA
210 South 16th Street............ 1894 319,535 93.4 3,291 0.67 11.03
- ---------------------------------------------------------------------------------------------------------------
TOTAL NEBRASKA OFFICE 319,535 93.4 3,291 0.67 11.03
- ---------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES 22,236,005 97.0 443,580 89.83 20.57
===============================================================================================================
SEE FOOTNOTES ON PAGE 59.
55
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
BURLINGTON COUNTY, NEW JERSEY
BURLINGTON
3 Terri Lane..................... 1991 64,500 61.4 370 0.07 9.34
5 Terri Lane..................... 1992 74,555 83.9 362 0.07 5.79
MOORESTOWN
2 Commerce Drive (4)............. 1986 49,000 100.0 363 0.07 7.42
101 Commerce Drive............... 1988 64,700 100.0 336 0.07 5.19
102 Commerce Drive (4)........... 1987 38,400 87.5 182 0.04 5.43
201 Commerce Drive............... 1986 38,400 100.0 196 0.04 5.10
202 Commerce Drive (4)........... 1988 51,200 100.0 268 0.05 5.24
1 Executive Drive................ 1989 20,570 100.0 138 0.03 6.71
2 Executive Drive (4)............ 1988 60,800 100.0 475 0.10 5.43
101 Executive Drive.............. 1990 29,355 70.5 124 0.03 5.99
102 Executive Drive.............. 1990 64,000 80.0 406 0.08 7.93
225 Executive Drive.............. 1990 50,600 100.0 336 0.07 6.64
97 Foster Road................... 1982 43,200 100.0 187 0.04 4.33
1507 Lancer Drive................ 1995 32,700 100.0 139 0.03 4.25
1510 Lancer Drive................ 1998 88,000 100.0 370 0.07 4.20
1256 North Church................ 1984 63,495 68.9 262 0.05 8.27
840 North Lenola Road............ 1995 38,300 100.0 271 0.05 10.27
844 North Lenola Road............ 1995 28,670 100.0 213 0.04 7.43
915 North Lenola Road (4)........ 1998 52,488 100.0 283 0.06 5.38
30 Twosome Drive................. 1997 39,675 100.0 224 0.05 5.65
40 Twosome Drive................. 1996 40,265 63.1 172 0.03 6.77
50 Twosome Drive................. 1997 34,075 100.0 268 0.05 7.87
WEST DEPTFORD
1451 Metropolitan Drive.......... 1996 21,600 100.0 148 0.03 6.85
MERCER COUNTY, NEW JERSEY
HAMILTON TOWNSHIP
100 Horizon Drive................ 1989 13,275 -- -- -- --
200 Horizon Drive................ 1991 45,770 100.0 447 0.09 9.77
300 Horizon Drive................ 1989 69,780 73.8 752 0.15 14.60
500 Horizon Drive................ 1990 41,205 57.8 276 0.06 11.59
MONMOUTH COUNTY, NEW JERSEY
WALL TOWNSHIP
1325 Campus Parkway.............. 1988 35,000 100.0 310 0.06 8.86
1340 Campus Parkway.............. 1992 72,502 100.0 802 0.16 11.06
1345 Campus Parkway.............. 1995 76,300 100.0 709 0.14 9.29
1433 Highway 34.................. 1985 69,020 89.5 490 0.10 7.93
1320 Wyckoff Avenue.............. 1986 20,336 100.0 88 0.02 4.33
1324 Wyckoff Avenue.............. 1987 21,168 100.0 183 0.04 8.65
PASSAIC COUNTY, NEW JERSEY
TOTOWA
1 Center Court................... 1999 38,961 37.8 141 0.03 9.57
2 Center Court................... 1998 30,600 99.3 351 0.07 11.55
11 Commerce Way.................. 1989 47,025 100.0 510 0.10 10.85
20 Commerce Way.................. 1992 42,540 100.0 433 0.09 10.18
29 Commerce Way.................. 1990 48,930 100.0 493 0.10 10.08
40 Commerce Way.................. 1987 50,576 100.0 559 0.11 11.05
45 Commerce Way.................. 1992 51,207 100.0 498 0.10 9.73
60 Commerce Way.................. 1988 50,333 100.0 396 0.08 7.87
80 Commerce Way.................. 1996 22,500 100.0 282 0.06 12.53
SEE FOOTNOTES ON PAGE 59.
56
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
100 Commerce Way................. 1996 24,600 100.0 299 0.06 11.79
120 Commerce Way................. 1994 9,024 100.0 95 0.04 21.05
140 Commerce Way................. 1994 26,881 99.5 286 0.04 7.10
- ---------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE/FLEX 1,996,081 90.5 14,493 2.92 8.02
- ---------------------------------------------------------------------------------------------------------------
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
11 Clearbrook Road............... 1974 31,800 100.0 321 0.06 10.09
75 Clearbrook Road............... 1990 32,720 100.0 816 0.17 24.94
150 Clearbrook Road.............. 1975 74,900 93.8 1,041 0.21 14.82
175 Clearbrook Road.............. 1973 98,900 98.5 1,439 0.29 14.77
200 Clearbrook Road.............. 1974 94,000 99.8 1,198 0.24 12.77
250 Clearbrook Road.............. 1973 155,000 94.5 1,315 0.27 8.98
50 Executive Boulevard........... 1969 45,200 97.2 384 0.08 8.74
77 Executive Boulevard........... 1977 13,000 55.4 137 0.03 19.02
85 Executive Boulevard........... 1968 31,000 99.4 446 0.09 14.47
300 Executive Boulevard.......... 1970 60,000 99.7 589 0.12 9.85
350 Executive Boulevard.......... 1970 15,400 98.8 243 0.05 15.97
399 Executive Boulevard.......... 1962 80,000 100.0 968 0.20 12.10
400 Executive Boulevard.......... 1970 42,200 100.0 610 0.12 14.45
500 Executive Boulevard.......... 1970 41,600 100.0 594 0.12 14.28
525 Executive Boulevard.......... 1972 61,700 100.0 874 0.18 14.17
1 Westchester Plaza.............. 1967 25,000 100.0 298 0.06 11.92
2 Westchester Plaza.............. 1968 25,000 100.0 421 0.09 16.84
3 Westchester Plaza.............. 1969 93,500 98.5 1,123 0.23 12.19
4 Westchester Plaza.............. 1969 44,700 99.8 629 0.13 14.10
5 Westchester Plaza.............. 1969 20,000 100.0 298 0.06 14.90
6 Westchester Plaza.............. 1968 20,000 100.0 302 0.06 15.10
7 Westchester Plaza.............. 1972 46,200 100.0 650 0.13 14.07
8 Westchester Plaza.............. 1971 67,200 100.0 872 0.18 12.98
HAWTHORNE
200 Saw Mill River Road.......... 1965 51,100 100.0 616 0.12 12.05
4 Skyline Drive.................. 1987 80,600 100.0 1,255 0.25 15.57
8 Skyline Drive.................. 1985 50,000 98.9 828 0.17 16.74
10 Skyline Drive................. 1985 20,000 100.0 283 0.06 14.15
11 Skyline Drive................. 1989 45,000 100.0 689 0.14 15.31
12 Skyline Drive................. 1999 46,850 100.0 760 0.15 16.22
15 Skyline Drive................. 1989 55,000 100.0 952 0.19 17.31
YONKERS
100 Corporate Boulevard.......... 1987 78,000 98.2 1,342 0.27 17.52
200 Corporate Boulevard South.... 1990 84,000 99.8 1,387 0.28 16.54
4 Executive Plaza................ 1986 80,000 99.9 1,039 0.21 13.00
6 Executive Plaza................ 1987 80,000 100.0 1,069 0.22 13.36
1 Odell Plaza.................... 1980 106,000 100.0 1,269 0.26 11.97
5 Odell Plaza.................... 1983 38,400 99.6 519 0.11 13.57
7 Odell Plaza.................... 1984 42,600 99.6 665 0.13 15.67
- ---------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE/FLEX 2,076,570 98.7 28,241 5.73 13.78
- ---------------------------------------------------------------------------------------------------------------
SEE FOOTNOTES ON PAGE 59.
57
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
(CONTINUED)
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
FAIRFIELD COUNTY, CONNECTICUT
STAMFORD
419 West Avenue.................. 1986 88,000 96.8 1,426 0.29 16.74
500 West Avenue.................. 1988 25,000 100.0 384 0.08 15.36
550 West Avenue.................. 1990 54,000 100.0 779 0.16 14.43
600 West Avenue (4).............. 1999 66,000 100.0 684 0.14 10.36
650 West Avenue.................. 1998 40,000 100.0 631 0.13 15.78
- ---------------------------------------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE/FLEX 273,000 99.0 3,904 0.80 14.45
- ---------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTIES..... 4,345,651 95.0 46,638 9.45 11.30
===============================================================================================================
SEE FOOTNOTES ON PAGE 59.
58
PROPERTY LISTING
INDUSTRIAL/WAREHOUSE PROPERTIES
PERCENTAGE OF
PERCENTAGE TOTAL OFFICE,
NET LEASED ANNUAL OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 9/30/00 RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2) BASE RENT(%) ($)(3)(5)
- -----------------------------------------------------------------------------------------------------------------
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
1 Warehouse Lane................. 1957 6,600 100.0 57 0.01 8.64
2 Warehouse Lane................. 1957 10,900 100.0 118 0.02 10.83
3 Warehouse Lane................. 1957 77,200 100.0 290 0.06 3.76
4 Warehouse Lane................. 1957 195,500 97.4 1,943 0.39 10.20
5 Warehouse Lane................. 1957 75,100 97.1 753 0.15 10.33
6 Warehouse Lane................. 1982 22,100 100.0 514 0.09 23.26
- ---------------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIAL/WAREHOUSE PROPERTIES 387,400 98.1 3,675 0.72 9.67
- ---------------------------------------------------------------------------------------------------------------
TOTAL OFFICE, OFFICE/FLEX,
AND INDUSTRIAL/WAREHOUSE
PROPERTIES 26,969,056 96.7 493,893 100.0 18.95
===============================================================================================================
(1) Based on all leases in effect as of September 30, 2000.
(2) Total base rent for 12 months ended September 30, 2000, determined in
accordance with GAAP. Substantially all of the leases provide for annual
base rents plus recoveries and escalation charges based upon the tenant's
proportionate share of and/or increases in real estate taxes and certain
operating costs, as defined, and the pass through of charges for electrical
usage. For those properties acquired or placed in service during the 12
months ended September 30, 2000, amounts are annualized, as per Note 4.
(3) Base rent for the 12 months ended September 30, 2000 divided by net
rentable square feet leased at September 30, 2000. For those properties
acquired or placed in service during 12 months ended September 30, 2000,
amounts are annualized, as per Note 4.
(4) As this property was acquired or placed in service during the 12 months
ended September 30, 2000, the amounts represented for base rent are
annualized. These annualized amounts may not be indicative of the
property's results had the Operating Partnership owned or placed such
property in service for the entire 12 months ended September 30, 2000.
(5) Excludes office space leased by the Operating Partnership.
(6) The property was sold by the Operating Partnership in 1999.
(7) The property was sold by the Operating Partnership in 2000.
(8) Calculation based on square feet in service as of September 30, 2000.
59
FUNDS FROM OPERATIONS
The Operating Partnership considers funds from operations ("FFO"), after
adjustment for straight-lining of rents and non-recurring charges, one measure
of REIT performance. Funds from operations is defined as net income (loss)
before distributions to preferred unitholders, computed in accordance with GAAP,
excluding gains (or losses) from debt restructuring, other extraordinary items,
and sales of depreciable rental property, plus real estate-related depreciation
and amortization. Funds from operations should not be considered as an
alternative to net income as an indication of the Operating Partnership's
performance or to cash flows as a measure of liquidity. Funds from operations
presented herein is not necessarily comparable to funds from operations
presented by other real estate companies due to the fact that not all real
estate companies use the same definition. However, the Operating Partnership's
funds from operations is comparable to the funds from operations of real estate
companies that use the current definition of the National Association of Real
Estate Investment Trusts ("NAREIT"), after the adjustment for straight-lining of
rents and non-recurring charges.
Funds from operations for the three and nine month periods ended September 30,
2000 and 1999 as calculated in accordance with NAREIT's definition as published
in October 1999, after adjustment for straight-lining of rents and non-recurring
charges, are summarized in the following table (IN THOUSANDS):
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------
Income before gain on sales of rental property
and minority interest $ 16,637 $ 40,941 $ 102,223 $107,075
Add: Real estate-related depreciation and
amortization (1) 23,920 23,419 70,072 69,139
Gain on sale of land -- -- 2,248 --
Non-recurring charges 27,911 -- 37,139 16,458
Deduct: Rental income adjustment for
straight-lining of rents (2) (3,484) (3,076) (9,074) (10,454)
Minority interest in consolidated
partially-owned properties -- -- (5,072) --
- -----------------------------------------------------------------------------------------------------------------
Funds from operations, after adjustment
for straight-lining of rents and
non-recurring charges $ 64,984 $ 61,284 $ 197,536 $182,218
Deduct: Distributions to preferred unitholders (3,928) (3,869) (11,562) (11,607)
- -----------------------------------------------------------------------------------------------------------------
Funds from operations, after adjustment for
straight-lining of rents and non-recurring
charges, after distributions to
preferred unitholders $ 61,056 $ 57,415 $ 185,974 $ 170,611
=================================================================================================================
Cash flows provided by operating activities $ 128,233 $ 162,372
Cash flows provided by (used in)
investing activities $ 55,157 $(170,974)
Cash flows (used in) provided by financing activities $ (181,471) $ 3,861
- -----------------------------------------------------------------------------------------------------------------
Basic weighted average units outstanding (3) 66,729 66,893 66,595 67,025
- -----------------------------------------------------------------------------------------------------------------
Diluted weighted average units outstanding (3) 73,353 73,731 73,276 73,936
- -----------------------------------------------------------------------------------------------------------------
(1) Includes the Operating Partnership's share from unconsolidated joint
ventures of $784 and $611 for the three months ended September 30, 2000 and
1999, respectively, and $2,204 and $2,221 for the nine months ended
September 30, 2000 and 1999, respectively.
(2) Includes the Operating Partnership's share from unconsolidated joint
ventures of ($36) and $155 for the three months ended September 30, 2000
and 1999, respectively, and $18 and $111 for the nine months ended
September 30, 2000 and 1999, respectively.
(3) See calculations for the amounts presented in the following reconciliation.
60
The following schedule reconciles the Operating Partnership's basic weighted
average units to the diluted weighted average units presented above:
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------
Basic weighted average units: 66,729 66,893 66,595 67,075
Add: Weighted average preferred units 6,439 6,618 6,504 6,642
(after conversion to common units)
Stock options 185 220 177 269
- -----------------------------------------------------------------------------------------------------------------
Diluted weighted average units: 73,353 73,731 73,276 73,936
=================================================================================================================
INFLATION
The Operating Partnership's leases with the majority of its tenants provide for
recoveries and escalation charges based upon the tenant's proportionate share
of, and/or increases in, real estate taxes and certain operating costs, which
reduce the Operating Partnership's exposure to increases in operating costs
resulting from inflation.
61
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Approximately $1.2 billion of the Operating Partnership's long-term debt bears
interest at fixed rates, and therefore the fair value of these instruments is
affected by changes in the market interest rates. The following table presents
principal cash flows (in thousands) based upon maturity dates of the debt
obligations and the related weighted-average interest rates by expected maturity
dates for the fixed rate debt. The interest rate on the variable rate debt as of
September 30, 2000 ranged from LIBOR plus 65 basis points to LIBOR plus 80 basis
points.
SEPTEMBER 30, 2000
LONG-TERM
DEBT, INCLUDING 10/1/00- FAIR
CURRENT PORTION 12/31/00 2001 2002 2003 2004 THEREAFTER TOTAL VALUE
- ---------------- -------- ---- ---- ---- ---- ---------- ----- -----
Fixed Rate....... $5,421 $7,468 $3,458 $195,612 $312,195 $713,512 $1,237,666 $1,193,295
Average Interest
Rate......... 7.02% 7.44% 8.20% 7.30% 7.34% 7.34% 7.33%
Variable Rate.... $264,483 $ 32,178 $ 296,661 $ 296,661
62
MACK-CALI REALTY, L.P.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Reference is made to "Other" in Note 15 (Commitments and Contingencies)
to the Consolidated Financial Statements, which is specifically
incorporated by reference herein.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not Applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
Item 5. OTHER INFORMATION
Not Applicable.
63
MACK-CALI REALTY, L.P.
PART II - OTHER INFORMATION (CONTINUED)
ITEM 6 - EXHIBITS
(a) Exhibits
The following exhibits are filed herewith or are incorporated by reference
to exhibits previously filed:
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ -------------
3.1 Restated Charter of Mack-Cali Realty Corporation dated June 2, 1999,
together with Articles Supplementary thereto (filed as Exhibit 3.1
to the General Partner's Form 8-K dated June 10, 1999 and as Exhibit
4.2 to the Operating Partnership's Form 8-K dated July 6, 1999 and
each incorporated herein by reference).
3.2 Amended and Restated Bylaws of Mack-Cali Realty Corporation dated
June 10, 1999 (filed as Exhibit 3.2 to the General Partner's Form
8-K dated June 10, 1999 and incorporated herein by reference).
3.3 Second Amended and Restated Agreement of Limited Partnership dated
December 11, 1997, for Mack-Cali Realty, L.P. (filed as Exhibit
10.110 to the General Partner's Form 8-K dated December 11, 1997 and
incorporated herein by reference).
3.4 Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of Mack-Cali Realty, L.P. (filed as Exhibit 3.1
to the General Partner's and the Operating Partnership's
Registration Statement on Form S-3, Registration No. 333-57103, and
incorporated herein by reference).
3.5 Second Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Mack-Cali Realty, L.P. (filed as Exhibit 10.2
to the Operating Partnership's Form 8-K dated July 6, 1999 and
incorporated herein by reference).
4.1 Amended and Restated Shareholder Rights Agreement, dated as of March
7, 2000, between Mack-Cali Realty Corporation and Equiserve Trust
Company, N.A., as Rights Agent (filed as Exhibit 4.1 to the
Operating Partnership's Form 8-K dated March 7, 2000 and
incorporated herein by reference).
4.2 Amendment No. 1 to the Amended and Restated Shareholder Rights
Agreement, dated as of June 27, 2000, by and among Mack-Cali Realty
Corporation and Equiserve Trust Company, N.A. (filed as Exhibit 4.1
to the Operating Partnership's Form 8-K dated June 27, 2000).
4.3 Indenture dated as of March 16, 1999, by and among Mack-Cali Realty,
L.P., as issuer, Mack-Cali Realty Corporation, as guarantor, and
Wilmington Trust Company, as trustee (filed as Exhibit 4.1 to the
Operating Partnership's Form 8-K dated March 16, 1999 and
incorporated herein by reference).
4.4 Supplemental Indenture No. 1 dated as of March 16, 1999, by and
among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
Company, as trustee (filed as Exhibit 4.2 to the Operating
Partnership's Form 8-K dated March 16, 1999 and incorporated herein
by reference).
64
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ -------------
4.5 Supplemental Indenture No. 2 dated as of August 2, 1999, by and
among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
Company, as trustee (filed as Exhibit 4.4 to the Operating
Partnership's Form 10-Q dated September 30, 1999 and incorporated
herein by reference).
10.1 Amended and Restated Employment Agreement dated as of July 1, 1999
between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as
Exhibit 10.2 to the Operating Partnership's Form 10-Q dated
September 30, 1999 and incorporated herein by reference).
10.2 Second Amended and Restated Employment Agreement dated as of July 1,
1999 between Timothy M. Jones and Mack-Cali Realty Corporation
(filed as Exhibit 10.3 to the Operating Partnership's Form 10-Q
dated September 30, 1999 and incorporated herein by reference).
10.3 Amended and Restated Employment Agreement dated as of July 1, 1999
between John R. Cali and Mack-Cali Realty Corporation (filed as
Exhibit 10.4 to the Operating Partnership's Form 10-Q dated
September 30, 1999 and incorporated herein by reference).
10.4 Amended and Restated Employment Agreement dated as of July 1, 1999
between Brant Cali and Mack-Cali Realty Corporation (filed as
Exhibit 10.5 to the Operating Partnership's Form 10-Q dated
September 30, 1999 and incorporated herein by reference).
10.5 Second Amended and Restated Employment Agreement dated as of July 1,
1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed
as Exhibit 10.6 to the Operating Partnership's Form 10-Q dated
September 30, 1999 and incorporated herein by reference).
10.6 Second Amended and Restated Employment Agreement dated as of July 1,
1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed
as Exhibit 10.7 to the Operating Partnership's Form 10-Q dated
September 30, 1999 and incorporated herein by reference).
10.7 Restricted Share Award Agreement dated as of July 1, 1999 between
Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit
10.8 to the Operating Partnership's Form 10-Q dated September 30,
1999 and incorporated herein by reference).
10.8 Restricted Share Award Agreement dated as of July 1, 1999 between
Timothy M. Jones and Mack-Cali Realty Corporation (filed as Exhibit
10.9 to the Operating Partnership's Form 10-Q dated September 30,
1999 and incorporated herein by reference).
10.9 Restricted Share Award Agreement dated as of July 1, 1999 between
John R. Cali and Mack-Cali Realty Corporation (filed as Exhibit
10.10 to the Operating Partnership's Form 10-Q dated September 30,
1999 and incorporated herein by reference).
10.10 Restricted Share Award Agreement dated as of July 1, 1999 between
Brant Cali and Mack-Cali Realty Corporation (filed as Exhibit 10.11
to the Operating Partnership's Form 10-Q dated September 30, 1999
and incorporated herein by reference).
10.11 Restricted Share Award Agreement dated as of July 1, 1999 between
Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit
10.12 to the Operating Partnership's Form 10-Q dated September 30,
1999 and incorporated herein by reference).
10.12 Restricted Share Award Agreement dated as of July 1, 1999 between
Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit
10.13 to the Operating Partnership's Form 10-Q dated September 30,
1999 and incorporated herein by reference).
65
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ -------------
10.13 Credit Agreement, dated as of December 10, 1997, by and among Cali
Realty, L.P. and the other signatories thereto (filed as Exhibit
10.122 to the General Partner's Form 8-K dated December 11, 1997 and
incorporated herein by reference).
10.14 Amendment No. 1 to Revolving Credit Agreement dated July 20, 1998,
by and among Mack-Cali Realty, L.P. and The Chase Manhattan Bank,
Fleet National Bank and Other Lenders Which May Become Parties
Thereto (filed as Exhibit 10.5 to the Operating Partnership's Form
10-K dated December 31, 1998 and incorporated herein by reference).
10.15 Amendment No. 2 to Revolving Credit Agreement dated December 30,
1998, by and among Mack-Cali Realty, L.P. and The Chase Manhattan
Bank, Fleet National Bank and Other Lenders Which May Become Parties
Thereto (filed as Exhibit 10.6 to the Operating Partnership's Form
10-K dated December 31, 1998 and incorporated herein by reference).
10.16 Contribution and Exchange Agreement among The MK Contributors, The
MK Entities, The Patriot Contributors, The Patriot Entities, Patriot
American Management and Leasing Corp., Cali Realty, L.P. and Cali
Realty Corporation, dated September 18, 1997 (filed as Exhibit 10.98
to the General Partner's Form 8-K dated September 19, 1997 and
incorporated herein by reference).
10.17 First Amendment to Contribution and Exchange Agreement, dated as of
December 11, 1997, by and among Mack-Cali Realty Corporation and the
Mack Group (filed as Exhibit 10.99 to the General Partner's Form 8-K
dated December 11, 1997 and incorporated herein by reference).
10.18 Termination and Release Agreement, dated September 21, 2000, by and
among Mack-Cali Realty Corporation, Mack-Cali Realty, L.P., Prentiss
Properties Trust and Prentiss Properties Acquisition Partners, L.P.
(filed as Exhibit 10.1 to the Operating Partnership's Form 8-K dated
September 21, 2000 and incorporated herein by reference).
10.19 Escrow Agreement, dated September 21, 2000, by and among
Mack-Cali Realty Corporation, Mack-Cali Realty, L.P., Prentiss
Properties Trust, Prentiss Properties Acquisition Partners, L.P.
and Chicago Title Insurance Company, as escrow agent (filed as
Exhibit 10.2 to the Operating Partnership's Form 8-K dated
September 21, 2000 and incorporated herein by reference).
10.20 Purchase and Sale Contract, dated September 21, 2000, by and between
Mack-Cali Texas Property L.P. and Prentiss Properties Acquisition
Partners, L.P. (filed as Exhibit 10.3 to the Operating Partnership's
Form 8-K dated September 21, 2000 and
incorporated herein by reference).
*27 Financial Data Schedule
(b) Reports on Form 8-K
On July 10, 2000, the Operating Partnership filed with the SEC a
Current Report on Form 8-K dated June 27, 2000, announcing under Item 5 that
the Corporation, Operating Partnership, Prentiss Properties Trust, a Maryland
real estate investment trust and Prentiss Properties Acquisition Partners,
L.P. ("Prentiss") had entered into a definitive Agreement and Plan of Merger
(the "Merger Agreement").
On July 17, 2000, the Operating Partnership filed with the SEC a Current
Report on Form 8-K dated June 27, 2000, filing under Item 5 the Merger Agreement
and related exhibits.
On September 22, 2000, the Operating Partnership filed with the SEC a
Current Report on Form 8-K dated September 21, 2000, reporting under Item 5
that (1) the Operating Partnership and Prentiss terminated the Merger
Agreement and (2) the Operating Partnership and Prentiss consummated a
purchase and sale transaction whereby the Operating Partnership sold to
Prentiss a property located in Austin, Texas.
- ----------
*filed herewith
66
MACK-CALI REALTY, L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MACK-CALI REALTY, L.P.
--------------------------------------
(Registrant)
By:Mack-Cali Realty Corporation,
as its General Partner
Date: November 13, 2000 /s/ Mitchell E. Hersh
--------------------------------------
Mitchell E. Hersh
Chief Executive Officer
Date: November 13, 2000 /s/ Barry Lefkowitz
--------------------------------------
Barry Lefkowitz
Executive Vice President &
Chief Financial Officer
67