AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 14, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST INDUSTRIAL REALTY TRUST, INC. FIRST INDUSTRIAL, L.P.
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
MARYLAND DELAWARE
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)
36-3935116 36-3924586
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
150 N. WACKER DRIVE, SUITE 150
CHICAGO, ILLINOIS 60606
(312) 704-9000
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
MICHAEL T. TOMASZ
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FIRST INDUSTRIAL REALTY TRUST, INC.
150 N. WACKER DRIVE, SUITE 150
CHICAGO, ILLINOIS 60606
(312) 704-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
GERALD S. TANENBAUM, ESQ. ROBERT E. KING, JR., ESQ.
ROGER ANDRUS, ESQ. ROGERS & WELLS
CAHILL GORDON & REINDEL 200 PARK AVENUE
80 PINE STREET NEW YORK, NEW YORK 10166
NEW YORK, NEW YORK 10005 (212) 878-8000
(212) 701-3000
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE PRICE PER OFFERING REGISTRATION
BEING REGISTERED(1)(2) REGISTERED(3)(4)(5) UNIT(6) PRICE(3)(4)(5)(7) FEE(8)
First Industrial Realty Trust,
Inc.
Common Stock
Preferred Stock $150,000,000 N.A. $150,000,000
Depositary Shares
$151,515
First Industrial, L.P.
Debt Securities $350,000,000 N.A. $350,000,000
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(1) This Registration Statement also covers contracts which may be issued by the
Registrants under which the counterparty may be required to purchase Common
Stock, Preferred Stock, Depositary Shares or Debt Securities.
(2) Subject to footnotes (4) and (5), there is being registered hereunder (a) an
indeterminate amount of Preferred Stock, Depositary Shares and Common Stock
as may be sold, from time to time, by First Industrial Realty Trust, Inc.
and (b) an indeterminate amount of Debt Securities as may be sold, from time
to time, by First Industrial, L.P. There is also being registered hereunder
an indeterminate number of shares of Common Stock that may be issued upon
conversion of Preferred Stock or Depositary Shares registered hereunder.
(3) In no event will the aggregate maximum offering price of all securities
registered under this Registration Statement exceed $500,000,000. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(4) In no event will the aggregate maximum offering price of Common Stock,
Preferred Stock and Depositary Shares registered under this Registration
Statement exceed $150,000,000.
(5) In no event will the aggregate maximum offering price of Debt Securities
registered under this Registration Statement exceed $350,000,000.
(6) The proposed maximum offering price per unit (a) has been omitted pursuant
to instruction II.D. of Form S-3 and (b) will be determined, from time to
time, by the Registrants in connection with the issuance by the Registrants
of the securities registered hereunder.
(7) In U.S. dollars or, the equivalent thereof, denominated in one or more
foreign currencies or units of two or more foreign currencies or composite
currencies (such as European Currency Units).
(8) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT CONTAINS A COMBINED PROSPECTUS THAT ALSO RELATES TO $89,525,000 OF
COMMON STOCK REGISTERED ON FORM S-3, FILE NO. 333-13225, WHICH WAS DECLARED
EFFECTIVE ON OCTOBER 4, 1996 (THE "PREVIOUSLY REGISTERED COMMON STOCK"), WHICH
HAS NOT BEEN OFFERED OR SOLD AS OF THE DATE OF THE FILING OF THIS REGISTRATION
STATEMENT. THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO.
1 TO REGISTRATION STATEMENT FILE NO. 333-13225, PURSUANT TO WHICH THE TOTAL
AMOUNT OF UNSOLD PREVIOUSLY REGISTERED COMMON STOCK REGISTERED ON REGISTRATION
STATEMENT FILE NO. 333-13225 MAY BE OFFERED AND SOLD BY THE COMPANY AS COMMON
STOCK. IN THE EVENT THE PREVIOUSLY REGISTERED COMMON STOCK IS OFFERED AND SOLD
PRIOR TO THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, THE AMOUNT OF
PREVIOUSLY REGISTERED COMMON STOCK SO SOLD WILL NOT BE INCLUDED IN THE
PROSPECTUS HEREUNDER.
EXPLANATORY NOTE
This Registration Statement relates to securities which may be offered from
time to time by First Industrial Realty Trust, Inc. (the "Company") and First
Industrial, L.P., a majority-owned subsidiary of the Company (the "Operating
Partnership"). This Registration Statement contains a form of base prospectus
(the "Base Prospectus") relating to both the Company and the Operating
Partnership which will be used in connection with an offering of securities by
the Company or the Operating Partnership. The specific terms of the securities
to be offered will be set forth in a Prospectus Supplement relating to such
securities. To the extent securities of the Operating Partnership, which are
limited to unsecured non-convertible investment grade debt securities, are
offered pursuant to the enclosed Base Prospectus, the Base Prospectus will
include the financial statements, together with notes and schedule, Selected
Financial Data and Management's Discussion and Analysis of Financial Condition
and Results of Operations of the Operating Partnership set forth on pages F-1
through F-37 of the Base Prospectus.
SUBJECT TO COMPLETION, DATED FEBRUARY 14, 1997
PROSPECTUS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
$589,525,000
FIRST INDUSTRIAL REALTY TRUST, INC.
Common Stock, Preferred Stock and Depositary Shares
FIRST INDUSTRIAL, L.P.
Debt Securities
First Industrial Realty Trust, Inc. (the "Company") may from time to time
offer in one or more series (i) shares of common stock, par value $.01 per share
("Common Stock"), (ii) shares of preferred stock, par value $.01 per share
("Preferred Stock"), and (iii) shares of Preferred Stock represented by
depositary shares ("Depositary Shares"), with an aggregate public offering price
of up to $239,525,000, in amounts, at prices and on terms to be determined at
the time of offering. First Industrial, L.P. (the "Operating Partnership") may
from time to time offer in one or more series unsecured non-convertible
investment grade debt securities ("Debt Securities"), with an aggregate public
offering price of up to $350,000,000, in amounts, at prices and on terms to be
determined at the time of offering. The Common Stock, Preferred Stock,
Depositary Shares and Debt Securities (collectively, the "Securities") may be
offered, separately or together, in separate series in amounts, at prices and on
terms to be set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Common Stock, any initial
public offering price; (ii) in the case of Preferred Stock, the specific title
and stated value, any dividend, liquidation, redemption, conversion, voting and
other rights, and any initial public offering price; (iii) in the case of
Depositary Shares, the fractional share of Preferred Stock represented by each
such Depositary Share; and (iv) in the case of Debt Securities, the specific
title, aggregate principal amount, currency, form (which may be registered or
bearer, or certificated or global), authorized denominations, maturity, rate (or
manner of calculation thereof) and time of payment of interest, terms for
redemption at the option of the Operating Partnership or repayment at the option
of the holder, terms for sinking fund payments, covenants and any initial public
offering price. In addition, such specific terms may include limitations on
direct or beneficial ownership and restrictions on transfer of the Securities,
in each case as may be consistent with the Company's Articles of Incorporation
or otherwise appropriate to preserve the status of the Company as a real estate
investment trust ("REIT") for federal income tax purposes. See "Restrictions on
Transfers of Capital Stock."
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement, not contained in this Prospectus.
The Securities may be offered directly to one or more purchasers, through
agents designated from time to time by the Company or the Operating Partnership
or to or through underwriters or dealers. If any agents or underwriters are
involved in the sale of any of the Securities, their names, and any applicable
purchase price, fee, commission or discount arrangement between or among them,
will be set forth, or will be calculable from the information set forth, in an
accompanying Prospectus Supplement. No Securities may be sold by the Company or
the Operating Partnership without delivery of a Prospectus Supplement describing
the method and terms of the offering of such series of Securities. See "Plan of
Distribution."
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE SECURITIES, SEE "RISK FACTORS" COMMENCING ON PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1997
AVAILABLE INFORMATION
The Company is, and upon effectiveness of the Registration Statement (as
hereinafter defined) the Operating Partnership will be, subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and, in accordance therewith, the Company files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission") and the Operating Partnership will file reports
and other information with the Commission. Such reports, proxy statements and
other information can be inspected and copied at prescribed rates at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission at 7 World Trade Center, 13th Floor, New York, New York 10048 and at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material also can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C 20549 at prescribed rates. In addition, the Commission maintains
a Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission
at http://www.sec.gov. Securities of the Company are listed on the New York
Stock Exchange (the "NYSE"), and all such material filed by the Company with the
NYSE also can be inspected at the offices of the NYSE, 20 Broad Street, New
York, New York 10005.
The Company and the Operating Partnership have filed with the Commission a
registration statement on Form S-3 (together with all amendments and exhibits,
the "Registration Statement"), of which this Prospectus is a part, under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities. This Prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information
concerning the Company, the Operating Partnership and the Securities, reference
is made to the Registration Statement. Statements contained in this Prospectus
as to the contents of any contract or other documents are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or documents filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company (File No. 1-13102)
with the Commission are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996;
(c) the Company's Current Report on Form 8-K dated April 3, 1996, as
amended by Form 8-K/A No. 1 filed May 17, 1996;
(d) the Company's Current Report on Form 8-K dated October 24, 1996;
(e) the Company's Current Report on Form 8-K dated February 12, 1997;
and
(f) the description of the Common Stock included in the Company's
Registration Statement on Form 8-A dated June 23, 1994.
All documents filed by the Company or the Operating Partnership pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference in this
Prospectus and made a part hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be
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modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other document subsequently filed with the
Commission which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the information incorporated by
reference herein (not including the exhibits to the information that is
incorporated by reference herein, unless such exhibits are specifically
incorporated by reference into the information that is incorporated by reference
herein). Requests for such copies should be directed to: First Industrial Realty
Trust, Inc., Attn: Investor Relations, 150 N. Wacker Drive, Suite 150, Chicago,
Illinois 60606, telephone (312) 704-9000.
Certain information, including, but not limited to, information relating to
the Operating Partnership's properties, principal security holders, management,
executive compensation, certain relationships and related transactions and legal
proceedings that would be required to be disclosed in a prospectus included in a
registration statement on Form S-11, has been omitted from this Prospectus,
because such information is not materially different from the information
contained in the Company's periodic reports, proxy statements and other
information filed by the Company with the Commission.
3
THE COMPANY AND THE OPERATING PARTNERSHIP
UNLESS THE CONTEXT OTHERWISE REQUIRES, ALL REFERENCES IN THIS PROSPECTUS TO
THE "COMPANY" REFER TO FIRST INDUSTRIAL REALTY TRUST, INC. AND ITS SUBSIDIARIES,
INCLUDING THE OPERATING PARTNERSHIP, AND ALL REFERENCES IN THIS PROSPECTUS TO
THE "OPERATING PARTNERSHIP" REFER TO FIRST INDUSTRIAL, L.P. AND ITS
SUBSIDIARIES.
The Company is a REIT which owns, manages, acquires and develops bulk
warehouse and light industrial properties. Markets in which the Company
currently operates include the following metropolitan areas: Minneapolis/St.
Paul, Minnesota; Detroit, Michigan; Atlanta, Georgia; Chicago, Illinois; Grand
Rapids, Michigan; Indianapolis, Indiana; Central Pennyslvania; Nashville,
Tennessee; St. Louis, Missouri; Columbus, Ohio; Cincinnati, Ohio; Des Moines,
Iowa; Milwaukee, Wisconsin; Dayton, Ohio; and Cleveland, Ohio. As of December
31, 1996, the Company owned 379 in service properties containing an aggregate of
approximately 32.7 million square feet of gross leasable area ("GLA") which was
approximately 97% leased to over 990 tenants. The Company is a self-administered
and fully integrated industrial real estate company.
The Company is the sole general partner of, and, as of January 31, 1997,
held approximately 88.4% of the outstanding units of partnership interest
("Units") in, the Operating Partnership. Approximately 11.6% of the outstanding
Units are held by outside investors, including certain members of the Company's
management. Each Unit, other than those held by the Company, may be exchanged by
the holder thereof for one share (subject to certain adjustments) of Common
Stock. With each such exchange, the number of Units owned by the Company, and,
therefore, the Company's percentage interest in the Operating Partnership, will
increase. Substantially all of the Company's assets are held by or through the
Operating Partnership and the Operating Partnership receives substantially the
same economic benefits as the Company.
The Company was incorporated in Maryland in August 1993. The Operating
Partnership was formed in Delaware in November 1993. The Company's and the
Operating Partnership's executive offices are located at 150 N. Wacker Drive,
Suite 150, Chicago, Illinois 60606, and their telephone number is (312)
704-9000.
RISK FACTORS
In evaluating an investment in the Securities, investors should consider the
following factors, in addition to other matters set forth or incorporated in
this Prospectus and in any applicable Prospectus Supplement.
REAL ESTATE INVESTMENT CONSIDERATIONS
GENERAL
Income from real property investments, and the Company's resulting ability
to make expected distributions to stockholders, may be adversely affected by the
general economic climate, local conditions such as oversupply or a reduction in
demand in the area, the attractiveness of the properties to tenants, tenant
defaults, zoning or other regulatory restrictions, competition from other
available real estate, the ability of the Company to provide adequate
maintenance and insurance and increased operating costs (including insurance
premiums and real estate taxes). The Company's income would also be adversely
affected if tenants were unable to pay rent or the Company were unable to rent
properties on favorable terms. In addition, certain expenditures associated with
real estate investment (such as real estate taxes and maintenance costs)
generally are not reduced when circumstances cause a reduction in income from
the investment. Furthermore, real estate investments are relatively illiquid
and, therefore, will tend to limit the ability of the Company to vary its
portfolio promptly in response to changes in economic or other conditions.
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RENEWAL OF LEASES AND RELETTING OF SPACE
The Company will be subject to the risks that, upon expiration of leases,
the leases may not be renewed, the space subject to such leases may not be relet
or the terms of renewal or reletting (including the cost of required
renovations) may be less favorable than expiring lease terms. If the Company
were unable promptly to renew a significant number of expiring leases or
promptly to relet the space covered by such leases, or if the rental rates upon
such renewal or reletting were significantly lower than the then current rates,
the Company's funds from operations and ability to make expected distributions
to stockholders might be adversely affected. Leases with respect to
approximately 5.5 million, 5.9 million and 5.4 million square feet of GLA expire
in 1997, 1998 and 1999, respectively.
POTENTIAL ENVIRONMENTAL LIABILITY
Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real estate may be liable for the costs of clean-up of
certain conditions relating to the presence of hazardous or toxic materials on,
in or emanating from the property, and any related damages to natural resources.
Such laws often impose liability without regard to whether the owner or operator
knew of, or was responsible for, the presence of hazardous or toxic materials.
The presence of such materials, or the failure to address such conditions
properly, may adversely affect the ability to rent or sell the property or to
borrow using the property as collateral. Persons who dispose of or arrange for
the disposal or treatment of hazardous or toxic materials may also be liable for
the costs of clean-up of such materials, or for related natural resource
damages, at or from an off-site disposal or treatment facility, whether or not
such facility is owned or operated by such persons. No assurance can be given
that existing environmental assessments with respect to any of the Company's
properties reveal all environmental liabilities, that any prior owner or
operator of any of the properties did not create any material environmental
condition not known to the Company or that a material environmental condition
does not otherwise exist as to any one or more properties.
TAX RISKS
CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
The Company intends to operate so as to qualify as a REIT under the Internal
Revenue Code of 1986, as amended (the "Code"). Although the Company believes
that it is organized and will operate in a manner so as to qualify as a REIT,
qualification as a REIT involves the satisfaction of numerous requirements (some
of which must be met on a recurring basis) established under highly technical
and complex Code provisions of which there are only limited judicial or
administrative interpretations, and involves the determination of various
factual matters and circumstances not entirely within the Company's control. If
the Company were to fail to qualify as a REIT in any taxable year, the Company
would be subject to federal income tax (including any applicable alternative
minimum tax) on its taxable income at corporate rates and, unless entitled to
relief under certain statutory provisions, the Company also would be
disqualified from treatment as a REIT for the four taxable years that follow.
See "Certain Federal Income Tax Considerations."
EFFECT OF DISTRIBUTION REQUIREMENTS
The Company could, in certain instances, have taxable income without
sufficient cash to enable the Company to meet the distribution requirements of
the REIT provisions of the Code. Accordingly, the Company could be required to
borrow funds or sell properties on adverse terms in order to meet such
distribution requirements. In addition, because the Company must distribute to
its stockholders at least 95% of its REIT taxable income each year, the
Company's ability to accumulate capital may be limited. Thus, it may be more
dependent on outside sources of financing, such as debt financing or issuances
of
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additional capital stock, in connection with future acquisitions. See "Certain
Federal Income Tax Considerations."
RISKS ASSOCIATED WITH DEBT FINANCING AND LEVERAGE
Where possible, the Company intends to continue to use leverage to increase
the rate of return on its investments and to allow the Company to make more
investments than it otherwise could. Such use of leverage presents an additional
element of risk in the event that the cash flow from the Company's properties is
insufficient to meet both debt payment obligations and the distribution
requirements of the REIT provisions of the Code.
BALLOON PAYMENTS
The Company is required to make lump-sum or "balloon" payments pursuant to
the terms of certain of its indebtedness, including a mortgage loan under which
First Industrial Financing Partnership, L.P (the "Financing Partnership")
borrowed $300 million (the "Mortgage Loan") and a $200 million unsecured
revolving credit facility (the "Acquisition Facility") under which the Company,
through the Operating Partnership, may borrow to finance the acquisition of
additional properties and for other corporate purposes, including working
capital. The Mortgage Loan and the Acquisition Facility provide for the
repayment of principal in a lump-sum or "balloon" payment at maturity in 1999
(subject to a two-year extension at the Financing Partnership's option, subject
to certain conditions) and 2000 (subject to successive one-year extensions at
the Operating Partnership's option, subject to certain conditions),
respectively. The Company's ability to make such payments may depend on its
ability either to refinance the applicable indebtedness or to sell properties.
The Company has no commitments to refinance the Mortgage Loan or the Acquisition
Facility. The Mortgage Loan and certain other existing debt obligations of the
Company are secured by its properties, and therefore such obligations will
permit the lender to foreclose on those properties in the event of a default.
NO LIMITATION ON DEBT IN ORGANIZATIONAL DOCUMENTS
The Company currently has a policy of maintaining a ratio of debt to total
market capitalization (I.E., total consolidated debt of the Company as a
percentage of the aggregate market value of all outstanding shares of Common
Stock, assuming the exchange of all Units for Common Stock, plus the aggregate
stated value of all outstanding shares of preferred stock, plus total
consolidated debt) which generally will not exceed 50% and a coverage ratio
(computed as total revenues minus property expenses and general and
administrative expenses divided by interest expense plus dividends on preferred
stock) of at least 2.0:1. However, the organizational documents of the Company
do not contain any limitation on the amount or percentage of indebtedness the
Company may incur. Accordingly, the Company could become more highly leveraged,
resulting in an increase in debt service that could adversely affect the
Company's ability to make expected distributions to stockholders and in an
increased risk of default on its obligations.
RISING INTEREST RATES
The Acquisition Facility bears interest at a floating rate. Increases in the
interest rate payable on balances outstanding under the Acquisition Facility
would have an adverse effect on the Company's cash available for distribution.
RISKS ASSOCIATED WITH POSSIBLE CONFLICTS OF INTEREST
COMPETITION FROM OTHER BUSINESS INTERESTS OF CERTAIN OFFICERS AND DIRECTORS
Entities affiliated with or controlled by certain officers and directors of
the Company hold equity interests in industrial properties not owned by the
Company. Some of these properties may compete with
6
properties owned by the Company. There can be no assurance that decisions by
officers and directors of the Company will fully represent the interests of
stockholders of the Company rather than such individuals and their affiliates.
TAX CONSEQUENCES TO CERTAIN OFFICERS AND DIRECTORS
Certain officers and directors of the Company own Units which may be
exchanged for Common Stock. Prior to the exchange of Units for Common Stock,
officers and directors of the Company who own Units may suffer different and
more adverse tax consequences than holders of Common Stock upon the sale of
certain of the Company's properties, the refinancing of debt associated with
those properties or in connection with a proposed tender offer or merger
involving the Company and, therefore, such individuals and the Company, as
partners in the Operating Partnership, may have different objectives regarding
the appropriate terms of any such transaction.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Company and the Operating Partnership intend to use the net proceeds from the
sale of Securities offered by this Prospectus and the applicable Prospectus
Supplement for general corporate purposes, which may include the acquisition of
additional properties, the repayment of outstanding debt or the improvement of
certain properties already in the Company's portfolio. Any proceeds from the
sale of Common Stock, Preferred Stock or Depositary Shares by the Company will
be invested in the Operating Partnership, which will use such proceeds for the
above-described purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges plus preferred dividend
requirements for the nine months ended September 30, 1996 and for the years
ended December 31, 1995 and 1994 were 1.80, 1.56 and 1.33, respectively. The
Operating Partnership's ratios of earnings to fixed charges plus fixed preferred
distributions of a limited partnership subsidiary of the Operating Partnership
for the nine months ended September 30, 1996 and the years ended December 31,
1995 and 1994 were 1.83, 1.54 and 1.33, respectively.
For purposes of computing the ratios of earnings to fixed charges, earnings
have been calculated by adding fixed charges (excluding capitalized interest) to
income (loss) before disposition of interest rate protection agreement, gain on
sales of properties, minority interest and extraordinary items. Fixed charges
consist of interest costs, whether expensed or capitalized, and amortization of
interest rate protection agreement and deferred financing costs.
With respect to the Company and the Operating Partnership, earnings were
inadequate to cover fixed charges by approximately $3.4 million, $4.3 million
and $3.9 million for the years ended December 31, 1993, 1992 and 1991,
respectively, which periods were prior to the Company's initial public offering.
No preferred stock of the Company was outstanding and no fixed preferred
distributions were required during such years.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an indenture (the "Indenture"),
dated as of a date prior to the issuance of the Debt Securities to which it
relates, between the Operating Partnership and a trustee (a "Trustee"), and in
the form that has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part, subject to such amendments or supplements as
may be adopted from time to time. The Indenture will be subject to and governed
by the Trust Indenture Act of 1939, as amended (the "TIA"). The statements made
under this heading relating to the Debt Securities and the Indenture are
7
summaries of certain provisions thereof, do not purport to be complete and are
qualified in their entirety by reference to the Indenture and such Debt
Securities.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the Indenture.
The Debt Securities to be offered hereby and in any applicable Prospectus
Supplement will be "investment grade" securities, meaning at the time of the
offering of such Debt Securities, at least one nationally recognized statistical
rating organization (as defined in the Exchange Act) will have rated such Debt
Securities in one of its generic rating categories which signifies investment
grade (typically the four highest rating categories, within which there may be
sub-categories or gradations indicating relative standing, signify investment
grades). An investment grade rating is not a recommendation to buy, sell or hold
securities, is subject to revision or withdrawal at any time by the assigning
entity and should be evaluated independently of any other rating.
TERMS
GENERAL. The Debt Securities will be direct unsecured obligations of the
Operating Partnership. The indebtedness represented by the Debt Securities will
rank equally with all other unsecured and unsubordinated indebtedness of the
Operating Partnership. No partner (whether limited or general, including the
Company) of the Operating Partnership has any obligation for the payment of
principal of (or premium, if any) or interest, if any, on, or any other amount
with respect to, the Debt Securities. The particular terms of the Debt
Securities offered by a Prospectus Supplement will be described in the
applicable Prospectus Supplement, along with any applicable modifications of or
additions to the general terms of the Debt Securities as described herein and in
the Indenture and any applicable federal income tax considerations. Accordingly,
for a description of the terms of any series of Debt Securities, reference must
be made to both the Prospectus Supplement relating thereto and the description
of the Debt Securities set forth in this Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities may be
issued without limit as to aggregate principal amount, in one or more series, in
each case as established from time to time by the Operating Partnership or as
set forth in the Indenture or in one or more indentures supplemental to the
Indenture. All Debt Securities of one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the holders of the Debt Securities of such series, for issuance of additional
Debt Securities of such series.
The Indenture will provide that the Operating Partnership may, but need not,
designate more than one Trustee thereunder, each with respect to one or more
series of Debt Securities. Any Trustee under the Indenture may resign or be
removed with respect to one or more series of Debt Securities, and a successor
Trustee may be appointed to act with respect to such series. In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each such Trustee shall be a Trustee of a trust under the
Indenture separate and apart from the trust administered by any other Trustee,
and, except as otherwise indicated herein, any action described herein to be
taken by each Trustee may be taken by each such Trustee with respect to, and
only with respect to, the one or more series of Debt Securities for which it is
Trustee under the Indenture.
The following summaries set forth certain general terms and provisions of
the Indenture and the Debt Securities. The Prospectus Supplement relating to the
series of Debt Securities being offered will contain further terms of such Debt
Securities, including the following specific terms:
(1) The title of such Debt Securities;
(2) The aggregate principal amount of such Debt Securities and any limit on
such aggregate principal amount;
8
(3) The price (expressed as a percentage of the principal amount thereof)
at which such Debt Securities will be issued and, if other than the
principal amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity thereof;
(4) The date or dates, or the method for determining such date or dates, on
which the principal of such Debt Securities will be payable;
(5) The rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(6) The date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the dates on which any such
interest will be payable, the record dates for such interest payment
dates, or the method by which such dates shall be determined, the
persons to whom such interest shall be payable, and the basis upon
which interest shall be calculated if other than that of a 360-day year
of twelve 30-day months;
(7) The place or places where the principal of (and premium or Make-Whole
Amount, if any) and interest, if any, on such Debt Securities will be
payable, where such Debt Securities may be surrendered for registration
of transfer or exchange and where notices or demands to or upon the
Operating Partnership in respect of such Debt Securities and the
Indenture may be served;
(8) The period or periods, if any, within which, the price or prices at
which and the other terms and conditions upon which such Debt
Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, as a whole or in part, at the option of the
Operating Partnership;
(9) The obligation, if any, of the Operating Partnership to redeem, repay
or purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a holder thereof, and the
period or periods within which, the price or prices at which and the
other terms and conditions upon which such Debt Securities will be
redeemed, repaid or purchased, as a whole or in part, pursuant to such
obligation;
(10) If other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies, and the terms and conditions relating thereto;
(11) Whether the amount of payments of principal of (and premium or
Make-Whole Amount, if any, including any amount due upon redemption, if
any) or interest, if any, on such Debt Securities may be determined
with reference to an index, formula or other method (which index,
formula or method may, but need not be, based on the yield on or
trading price of other securities, including United States Treasury
securities, or on a currency, currencies, currency unit or units, or
composite currency or currencies) and the manner in which such amounts
shall be determined;
(12) Whether the principal of (and premium or Make-Whole Amount, if any) or
interest on the Debt Securities of the series are to be payable, at the
election of the Operating Partnership or a holder thereof, in a
currency or currencies, currency unit or units or composite currency or
currencies other than that in which such Debt Securities are
denominated or stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may be
made, and the time and manner of, and identity of the exchange rate
agent with responsibility for, determining the exchange rate between
the currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are denominated or
stated to be payable and the currency or currencies, currency unit or
units or composite currency or currencies in which such Debt Securities
are to be so payable;
9
(13) Provisions, if any, granting special rights to the holders of Debt
Securities of the series upon the occurrence of such events as may be
specified;
(14) Any deletions from, modifications of or additions to the Events of
Default or covenants of the Operating Partnership with respect to Debt
Securities of the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants
described herein;
(15) Whether and under what circumstances the Operating Partnership will pay
any additional amounts on such Debt Securities in respect of any tax,
assessment or governmental charge and, if so, whether the Operating
Partnership will have the option to redeem such Debt Securities in lieu
of making such payment;
(16) Whether Debt Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may
be exchanged for Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any Debt
Securities of the series are to be issuable initially in temporary
global form and whether any Debt Securities of the series are to be
issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Debt Securities of such series
and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than
in the manner provided in the Indenture, and, if Registered Securities
of the series are to be issuable as a Global Security, the identity of
the depository for such series;
(17) The date as of which any Bearer Securities of the series and any
temporary Global Security representing outstanding Debt Securities of
the series shall be dated if other than the date of original issuance
of the first Security of the series to be issued;
(18) The Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which, any
interest payable on a temporary Global Security on an Interest Payment
Date will be paid if other than in the manner provided in the
Indenture;
(19) Whether such Debt Securities will be issued in certificated or book
entry form;
(20) The applicability, if any, of the defeasance and covenant defeasance
provisions of the Indenture to the Debt Securities of the series;
(21) If the Debt Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or
other documents or satisfaction of other conditions, then the form
and/or terms of such certificates, documents or conditions; and
(22) Any other terms of the series (which terms shall not be inconsistent
with the provisions of the Indenture).
If so provided in the applicable Prospectus Supplement, the Debt Securities
may be issued at a discount below their principal amount and provide for less
than the entire principal amount thereof to be payable upon declaration of
acceleration of the maturity thereof ("Original Issue Discount Securities"). In
such cases, all material U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
10
Except as may be set forth in any Prospectus Supplement, the Indenture will
not contain any provisions that would limit the ability of the Operating
Partnership to incur indebtedness or that would afford holders of Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Operating Partnership or in the event of a change of control.
Restrictions on ownership and transfers of the Common Stock and Preferred Stock
are designed to preserve the Company's status as a REIT and, therefore, may act
to prevent or hinder a change of control. See "Restrictions on Transfers of
Capital Stock." Reference is made to the applicable Prospectus Supplement for
information with respect to any deletions from, modifications of, or additions
to, the Events of Default or covenants of the Operating Partnership that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof. Where Debt Securities of any series are issued in
bearer form, the special restrictions and considerations, including special
offering restrictions and special federal income tax considerations, applicable
to any such Debt Securities and to payment on and transfer and exchange of such
Debt Securities will be described in the applicable Prospectus Supplement.
Bearer Debt Securities will be transferable by delivery.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium or Make-Whole Amount, if any) and interest
on any series of Debt Securities will be payable at the corporate trust office
of the applicable Trustee, the address of which will be stated in the applicable
Prospectus Supplement; provided that, at the option of the Operating
Partnership, payment of interest may be made by check mailed to the address of
the person entitled thereto as it appears in the applicable register for such
Debt Securities or by wire transfer of funds to such person at an account
maintained within the United States.
Unless otherwise specified in the applicable Prospectus Supplement, any
interest not punctually paid or duly provided for on any Interest Payment Date
with respect to a Debt Security in registered form ("Defaulted Interest") will
forthwith cease to be payable to the holder on the applicable Regular Record
Date and may either be paid to the Person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, in which case notice thereof shall be given to the holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner, all as more completely described in the
Indenture.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the corporate trust office of the applicable Trustee or at the office of any
transfer agent designated by the Operating Partnership for such purpose. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
registration of transfer or exchange thereof at the corporate trust office of
the applicable Trustee or at the office of any transfer agent designated by the
Operating Partnership for such purpose. Every Debt Security in registered form
surrendered for registration of transfer or exchange must be duly endorsed or
accompanied by a written instrument of transfer, and the person requesting such
action must provide evidence of title and identity satisfactory to the
applicable Trustee or transfer agent. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Operating
Partnership may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. If the applicable
Prospectus Supplement refers to any transfer agent (in addition to the
applicable Trustee) initially designated by the Operating Partnership with
respect to any series of Debt Securities, the Operating Partnership may at any
time rescind the designation of any such transfer agent or
11
approve a change in the location through which any such transfer agent acts,
except that the Operating Partnership will be required to maintain a transfer
agent in each place of payment for such series. The Operating Partnership may at
any time designate additional transfer agents with respect to any series of Debt
Securities.
Neither the Operating Partnership nor any Trustee shall be required to (a)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before the selection of
any Debt Securities for redemption and ending at the close of business on (i) if
such Debt Securities are issuable only as Registered Securities, the day of the
mailing of the relevant notice of redemption and (ii) if such Debt Securities
are issuable as Bearer Securities, the day of the first publication of the
relevant notice of redemption or, if such Debt Securities are also issuable as
Registered Securities and there is no publication, the mailing of the relevant
notice of redemption; (b) register the transfer of or exchange any Debt
Security, or portion thereof, so selected for redemption, in whole or in part,
except the unredeemed portion of any Debt Security being redeemed in part; (c)
exchange any Bearer Security so selected for redemption except that, to the
extent provided with respect to such Bearer Security, such Bearer Security may
be exchanged for a Registered Security of that series and of like tenor,
PROVIDED that such Registered Security shall be simultaneously surrendered for
redemption; or (d) issue, register the transfer of or exchange any Debt Security
that has been surrendered for repayment at the option of the holder, except the
portion, if any, of such Debt Security not to be so repaid.
Payment in respect of Debt Securities in bearer form will be made in the
currency and in the manner designated in the applicable Prospectus Supplement,
subject to any applicable laws and regulations, at such paying agencies outside
the United States as the Operating Partnership may appoint from time to time.
The paying agents outside the United States, if any, initially appointed by the
Operating Partnership for a series of Debt Securities will be named in the
applicable Prospectus Supplement. Unless otherwise provided in the applicable
Prospectus Supplement, the Operating Partnership may at any time designate
additional paying agents or rescind the designation of any paying agents, except
that, if Debt Securities of a series are issuable in registered form, the
Operating Partnership will be required to maintain at least one paying agent in
each place of payment for such series and if Debt Securities of a series are
issuable in bearer form, the Operating Partnership will be required to maintain
at least one paying agent in a place of payment outside the United States where
Debt Securities of such series and any coupons appertaining thereto may be
presented and surrendered for payment.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indenture will provide that the Operating Partnership may, without the
consent of the holders of any outstanding Debt Securities, consolidate with, or
sell, lease or convey all or substantially all of its assets to, or merge with
or into, any other entity provided that (a) either the Operating Partnership
shall be the continuing entity, or the successor entity (if other than the
Operating Partnership) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets is organized
under the laws of any domestic jurisdiction and expressly assumes the Operating
Partnership's obligations to pay principal of (and premium or Make-Whole Amount,
if any) and interest on all of the Debt Securities and the due and punctual
performance and observance of all of the covenants and conditions contained in
the Indenture; (b) immediately after giving effect to such transaction and
treating any indebtedness that becomes an obligation of the Operating
Partnership or any subsidiary as a result thereof as having been incurred by the
Operating Partnership or such subsidiary at the time of such transaction, no
Event of Default under the Indenture, and no event which, after notice or the
lapse of time, or both, would become such an Event of Default, shall have
occurred and be continuing; and (c) an officers' certificate and legal opinion
covering such conditions shall be delivered to each Trustee.
12
CERTAIN COVENANTS
The applicable Prospectus Supplement will describe any material covenants in
respect of a series of Debt Securities that are not described in this
Prospectus. Unless otherwise indicated in the applicable Prospectus Supplement,
the Debt Securities will include the following covenants of the Operating
Partnership:
EXISTENCE. Except as permitted under "--Merger, Consolidation or Sale of
Assets," the Indenture will require the Operating Partnership to do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence, rights and franchises; PROVIDED, HOWEVER, that the Operating
Partnership shall not be required to preserve any right or franchise if it
determines that the preservation thereof is no longer desirable in the conduct
of its business.
MAINTENANCE OF PROPERTIES. The Indenture will require the Operating
Partnership to cause all of its material properties used or useful in the
conduct of its business or the business of any subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Operating Partnership may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that the Operating Partnership and its subsidiaries shall not
be prevented from selling or otherwise disposing of their properties for value
in the ordinary course of business.
INSURANCE. The Indenture will require the Operating Partnership to cause
each of its and its subsidiaries' insurable properties to be insured against
loss or damage at least equal to their then full insurable value with insurers
of recognized responsibility and, if described in the applicable Prospectus
Supplement, having a specified rating from a recognized insurance rating
service.
PAYMENT OF TAXES AND OTHER CLAIMS. The Indenture will require the Operating
Partnership to pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all taxes, assessments and governmental
charges levied or imposed upon it or any subsidiary or upon the income, profits
or property of the Operating Partnership or any subsidiary and (ii) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Operating Partnership or any subsidiary; PROVIDED,
HOWEVER, that the Operating Partnership shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise provided in the applicable Prospectus Supplement, the
Indenture will provide that the following events are "Events of Default" with
respect to any series of Debt Securities issued thereunder: (a) default in the
payment of any interest on any Debt Security of such series when such interest
becomes due and payable that continues for a period of 30 days; (b) default in
the payment of the principal of (or premium or Make-Whole Amount, if any, on)
any Debt Security of such series when due and payable; (c) default in making any
sinking fund payment as required for any Debt Security of such series; (d)
default in the performance, or breach, of any other covenant or warranty of the
Operating Partnership in the Indenture with respect to the Debt Securities of
such series and continuance of such default or breach for a period of 60 days
after written notice as provided in the Indenture; (e) default under any bond,
debenture, note, mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness for money
borrowed by the Operating Partnership (or by any subsidiary the repayment of
which the Operating Partnership has guaranteed or for which the Operating
Partnership is directly responsible or liable as obligor or guarantor) having an
aggregate principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness becoming or being
13
declared due and payable prior to the date on which it would otherwise have
become due and payable, without such indebtedness having been discharged, or
such acceleration having been rescinded or annulled, within a period of 30 days
after written notice to the Operating Partnership as provided in the Indenture;
(f) certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of the Operating Partnership or
any Significant Subsidiary; and (g) any other event of default provided with
respect to a particular series of Debt Securities. The term "Significant
Subsidiary" has the meaning ascribed to such term in Regulation S-X promulgated
under the Securities Act.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of that series will have the right to
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of, and premium or
Make-Whole Amount, if any, on, all the Debt Securities of that series to be due
and payable immediately by written notice thereof to the Operating Partnership
(and to the applicable Trustee if given by the holders); PROVIDED, that in the
case of an Event of Default described under clause (f) of the preceding
paragraph, acceleration is automatic. However, at any time after such a
declaration of acceleration with respect to Debt Securities of such series has
been made, but before a judgment or decree for payment of the money due has been
obtained by the applicable Trustee, the holders of not less than a majority in
principal amount of outstanding Debt Securities of such series may rescind and
annul such declaration and its consequences if (a) the Operating Partnership
shall have deposited with the applicable Trustee all required payments of the
principal of (and premium or Make-Whole Amount, if any) and interest on the Debt
Securities of such series, plus certain fees, expenses, disbursements and
advances of the applicable Trustee, and (b) all Events of Default, other than
the non-payment of accelerated principal (or specified portion thereof and the
premium or Make-Whole Amount, if any), with respect to Debt Securities of such
series have been cured or waived as provided in the Indenture. The Indenture
will also provide that the holders of not less than a majority in principal
amount of the outstanding Debt Securities of any series may waive any past
default with respect to such series and its consequences, except a default (i)
in the payment of the principal of (or premium or Make-Whole Amount, if any) or
interest on any Debt Security of such series or (ii) in respect of a covenant or
provision contained in the Indenture that cannot be modified or amended without
the consent of the holder of each outstanding Debt Security affected thereby.
The Indenture will require each Trustee to give notice to the holders of
Debt Securities within 90 days of a default under the Indenture unless such
default shall have been cured or waived; PROVIDED, HOWEVER, that such Trustee
may withhold notice to the holders of any series of Debt Securities of any
default with respect to such series (except a default in the payment of the
principal of (or premium or Make-Whole Amount, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund installment in
respect of any Debt Security of such series) if specified responsible officers
of such Trustee consider such withholding to be in the interest of such holders.
The Indenture will provide that no holders of Debt Securities of any series
may institute any proceedings, judicial or otherwise, with respect to the
Indenture or for any remedy thereunder, except in the case of failure of the
applicable Trustee, for 60 days, to act after it has received a written request
to institute proceedings in respect of an Event of Default from the holders of
not less than 25% in principal amount of the outstanding Debt Securities of such
series, as well as an offer of indemnity reasonably satisfactory to it. This
provision will not prevent, however, any holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and premium
or Make-Whole Amount, if any) and interest on such Debt Securities at the
respective due dates or redemption dates thereof.
The Indenture will provide that, subject to provisions in the Indenture
relating to its duties in case of default, a Trustee will be under no obligation
to exercise any of its rights or powers under the Indenture at
14
the request or direction of any holders of any series of Debt Securities then
outstanding under the Indenture, unless such holders shall have offered to the
Trustee thereunder reasonable security or indemnity. The holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under the Indenture, as the
case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee, or
of exercising any trust or power conferred upon such Trustee. However, a Trustee
may refuse to follow any direction which is in conflict with any law or the
Indenture, which may involve such Trustee in personal liability or which may be
unduly prejudicial to the holders of Debt Securities of such series not joining
therein.
Within 120 days after the close of each fiscal year, the Operating
Partnership will be required to deliver to each Trustee a certificate, signed by
one of several specified officers of the Company, stating whether or not such
officer has knowledge of any default under the Indenture and, if so, specifying
each such default and the nature and status thereof.
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture will be permitted to be made
only with the consent of the holders of not less than a majority in principal
amount of all outstanding Debt Securities issued under the Indenture affected by
such modification or amendment; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of the holder of each such Debt Security
affected thereby, (a) change the stated maturity of the principal of, or any
installment of interest (or premium or Make-Whole Amount, if any) on, any such
Debt Security; (b) reduce the principal amount of, or the rate or amount of
interest on, or any premium or Make-Whole Amount payable on redemption of, any
such Debt Security, or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon declaration of acceleration
of the maturity thereof or would be provable in bankruptcy, or adversely affect
any right of repayment of the holder of any such Debt Security; (c) change the
place of payment, or the coin or currency, for payment of principal of (or
premium or Make-Whole Amount, if any) or interest on any such Debt Security; (d)
impair the right to institute suit for the enforcement of any payment on or with
respect to any such Debt Security; (e) reduce the above-stated percentage of
outstanding Debt Securities of any series necessary to modify or amend the
Indenture, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the Indenture; or (f) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Operating Partnership with certain restrictive covenants of the Indenture.
Modifications and amendments of the Indenture will be permitted to be made
by the Operating Partnership and the respective Trustee thereunder without the
consent of any holder of Debt Securities for any of the following purposes: (a)
to evidence the succession of another person to the Operating Partnership as
obligor under the Indenture; (b) to add to the covenants of the Operating
Partnership for the benefit of the holders of all or any series of Debt
Securities or to surrender any right or power conferred upon the Operating
Partnership in the Indenture; (c) to add events of default for the benefit of
the holders of all or any series of Debt Securities; (d) to add or change any
provisions of the Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate the
issuance of Debt Securities in uncertificated form, PROVIDED that such action
shall not adversely affect the interests of the holders of the Debt Securities
of any series in any material respect; (e) to change or eliminate any provisions
of the Indenture, PROVIDED that any such change or elimination shall become
effective only when there are no Debt Securities outstanding of any series
created prior
15
thereto which are entitled to the benefit of such provision; (f) to secure the
Debt Securities; (g) to establish the form or terms of Debt Securities of any
series; (h) to provide for the acceptance of appointment by a successor Trustee
or facilitate the administration of the trusts under the Indenture by more than
one Trustee; (i) to cure any ambiguity, defect or inconsistency in the
Indenture, provided that such action shall not adversely affect the interests of
holders of Debt Securities of any series issued under the Indenture in any
material respect; or (j) to supplement any of the provisions of the Indenture to
the extent necessary to permit or facilitate defeasance and discharge of any
series of such Debt Securities, PROVIDED that such action shall not adversely
affect the interests of the holders of the outstanding Debt Securities of any
series in any material respect.
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (a) the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (b) the principal amount of
any Debt Security denominated in a foreign currency that shall be deemed
Outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount of such Debt Security (or, in
the case of an Original Issue Discount Security, the U.S. dollar equivalent on
the issue date of such Debt Security of the amount determined as provided in (a)
above), (c) the principal amount of an indexed security that shall be deemed
Outstanding shall be the principal face amount of such indexed security at
original issuance, unless otherwise provided with respect to such indexed
security pursuant to the Indenture, and (d) Debt Securities owned by the
Operating Partnership or any other obligor upon the Debt Securities or any
affiliate of the Operating Partnership or of such other obligor shall be
disregarded.
The Indenture will contain provisions for convening meetings of the holders
of Debt Securities of a series. A meeting will be permitted to be called at any
time by the applicable Trustee, and also, upon request, by the Operating
Partnership or the holders of at least 25% in principal amount of the
outstanding Debt Securities of such series, in any such case upon notice given
as provided in the Indenture. Except for any consent that must be given by the
holder of each Debt Security affected by certain modifications and amendments of
the Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; PROVIDED, HOWEVER, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority, in principal
amount of the outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the holders of such specified
percentage in principal amount of the outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with the Indenture will be
binding on all holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; PROVIDED, HOWEVER, that if any action
is to be taken at such meeting with respect to a consent or waiver which may be
given by the holders of not less than a specified percentage in principal amount
of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, the Indenture will provide that if
any action is to be taken at a meeting of holders of Debt Securities of any
series with respect to any request, demand, authorization, direction, notice,
consent, waiver and other action that the Indenture expressly provides may be
made, given or taken by the holders of a specified percentage in principal
amount of all outstanding Debt
16
Securities affected thereby, or of the holders of such series and one or more
additional series: (a) there shall be no minimum quorum requirement for such
meeting, and (b) the principal amount of the outstanding Debt Securities of such
series that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, the
Operating Partnership will be permitted, at its option, to discharge certain
obligations to holders of any series of Debt Securities issued under the
Indenture that have not already been delivered to the applicable Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the applicable Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal (and
premium or Make-Whole Amount, if any) and interest to the date of such deposit
(if such Debt Securities have become due and payable) or to the stated maturity
or redemption date, as the case may be.
The Indenture will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Operating Partnership may elect either (a)
to defease and be discharged from any and all obligations with respect to such
Debt Securities (except for the obligation to pay additional amounts, if any,
upon the occurrence of certain events of tax, assessment or governmental charge
with respect to payments on such Debt Securities and the obligations to register
the transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency in respect of such Debt Securities, and to hold moneys for payment in
trust) ("defeasance") or (b) to be released from certain obligations with
respect to such Debt Securities under the Indenture (including the restrictions
described under "--Certain Covenants") or, if provided in the applicable
Prospectus Supplement, its obligations with respect to any other covenant, and
any omission to comply with such obligations shall not constitute an Event of
Default with respect to such Debt Securities ("covenant defeasance"), in either
case upon the irrevocable deposit by the Operating Partnership with the
applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Debt Securities, which through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium or Make-Whole
Amount, if any) and interest on such Debt Securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Operating Partnership has delivered to the applicable Trustee an
opinion of counsel (as specified in the Indenture) to the effect that the
holders of such Debt Securities will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion of counsel,
in the case of defeasance, will be required to refer to and be based upon a
ruling received from the Internal Revenue Service or a change in applicable
United States federal income tax law occurring after the date of the Indenture.
In the event of such defeasance, the holders of such Debt Securities would
thereafter be able to look only to such trust fund for payment of principal (and
premium or Make-Whole Amount, if any) and interest.
"Government Obligations" means securities that are (a) direct obligations of
the United States of America or the government which issued the foreign currency
in which the Debt Securities of a particular
17
series are payable, for the payment of which its full faith and credit is
pledged or (b) obligations of a person controlled or supervised by and acting as
an agency or instrumentality of the United States of America or such government
which issued the foreign currency in which the Debt Securities of such series
are payable, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other government,
which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Operating Partnership has deposited funds and/or Government Obligations to
effect defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the holder of a Debt Security of such series is entitled to, and
does, elect pursuant to the Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security will be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium or Make-Whole Amount, if any) and interest on such Debt Security as
they become due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the currency, currency unit or
composite currency in which such Debt Security becomes payable as a result of
such election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency, currency
unit or composite currency both by the government of the country which issued
such currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium or
Make-Whole Amount, if any) and interest on any Debt Security that is payable in
a foreign currency that ceases to be used by its government of issuance shall be
made in U.S. dollars.
In the event the Operating Partnership effects covenant defeasance with
respect to any Debt Securities and such Debt Securities are declared due and
payable because of the occurrence of any Event of Default other than the Event
of Default described in clause (d) under "--Events of Default, Notice and
Waiver" with respect to specified sections of the Indenture (which sections
would no longer be applicable to such Debt Securities) or described in clause
(g) under "--Events of Default, Notice and Waiver" with respect to any other
covenant as to which there has been covenant defeasance, the amount in such
currency, currency unit or composite currency in which such Debt Securities are
payable, and Government Obligations on deposit with the applicable Trustee, will
be sufficient to pay amounts due on such Debt Securities at the time of their
stated maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of Default.
However, the Operating Partnership would remain liable to make payment of such
amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
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NO CONVERSION RIGHTS
The Debt Securities will not be convertible into or exchangeable for any
capital stock of the Company or equity interest in the Operating Partnership.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
book-entry form consisting of one or more global securities (the "Global
Securities") that will be deposited with, or on behalf of, a depositary (the
"Depositary") identified in the applicable Prospectus Supplement relating to
such series. Global Securities may be issued in either registered or bearer form
and in either temporary or permanent form. The specific terms of the depositary
arrangement with respect to a series of Debt Securities will be described in the
applicable Prospectus Supplement relating to such series.
PAYMENT AND PAYING AGENTS
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium or Make-Whole Amount, if any) and interest
on any series of Debt Securities will be payable at the corporate trust office
of the Trustee, the address of which will be stated in the applicable Prospectus
Supplement; provided that, at the option of the Operating Partnership, payment
of interest may be made by check mailed to the address of the person entitled
thereto as it appears in the applicable register for such Debt Securities or by
wire transfer of funds to such person at an account maintained within the United
States.
All moneys paid by the Operating Partnership to a paying agent or a Trustee
for the payment of the principal of or any premium, Make-Whole Amount or
interest on any Debt Security which remain unclaimed at the end of two years
after such principal, premium, Make-Whole Amount or interest has become due and
payable will be repaid to the Operating Partnership, and the holder of such Debt
Security thereafter may look only to the Operating Partnership for payment
thereof.
DESCRIPTION OF PREFERRED STOCK
The description of the Preferred Stock set forth below does not purport to
be complete and is qualified in its entirety by reference to the Company's
Amended and Restated Articles of Incorporation, as amended (the "Articles of
Incorporation"), and Amended and Restated Bylaws (the "Bylaws").
GENERAL
Under the Articles of Incorporation, the Company has authority to issue 10
million shares of Preferred Stock, par value $.01 per share. The Preferred Stock
may be issued from time to time, in one or more series, as authorized by the
Board of Directors of the Company. Prior to issuance of shares of each series,
the Board of Directors is required by the Maryland General Corporation Law
("MGCL") and the Articles of Incorporation to fix for each series, subject to
the provisions of the Articles of Incorporation regarding excess stock, $.01 par
value per share ("Excess Stock"), the terms, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption of such
shares as may be permitted by Maryland law. Such rights, powers, restrictions
and limitations could include the right to receive specified dividend payments
and payments on liquidation prior to any such payments to holders of Common
Stock or other capital stock of the Company ranking junior to the Preferred
Stock. The outstanding shares of Preferred Stock are, and additional shares of
Preferred Stock will be, when issued, fully paid and nonassessable and will have
no preemptive rights. The Board of Directors could authorize the issuance of
shares of Preferred Stock with terms and conditions that could have the effect
of discouraging a takeover or other transaction that holders of Common Stock
might believe to be in their best interests or in which holders of some, or a
majority, of
19
the shares of Common Stock might receive a premium for their shares over the
then market price of such shares of Common Stock.
OUTSTANDING PREFERRED STOCK
At February 13, 1997, the Company had outstanding 1,650,000 shares of 9 1/2%
Series A Preferred Stock, $.01 par value ("Series A Preferred Stock"),
constituting all of the Company's then outstanding Preferred Stock. The terms of
the Series A Preferred Stock provide for a preference as to the payment of
dividends over shares of Common Stock and any other capital stock ranking junior
to the Series A Preferred Stock, and for cumulative quarterly dividends at the
rate of $2.375 per share per year. On and after November 17, 2000, the Series A
Preferred Stock is subject to redemption, in whole or in part, at the option of
the Company, at a cash redemption price of $25.00 per share, plus accrued and
unpaid dividends.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of the Series A Preferred Stock will be
entitled to receive out of the Company's assets available for distribution to
stockholders, before any distribution of assets is made to holders of Common
Stock or any other shares of capital stock ranking as to such distributions
junior to the Series A Preferred Stock, liquidating distributions in the amount
of $25.00 per share, plus all accrued and unpaid dividends.
The Series A Preferred Stock is also entitled to the benefits of a Guarantee
and Payment Agreement between First Industrial Securities, L.P. ("Securities,
L.P.") and its general partner, First Industrial Securities Corporation (each a
subsidiary of the Company), for the benefit of American National Bank and Trust
Company of Chicago as Guarantee Agent thereunder (the "Guarantee Agreement")
pursuant to which Securities, L.P. has guaranteed, subject to the terms of the
Guarantee Agreement, dividends on, and redemption and liquidation payments with
respect to, the Series A Preferred Stock. No other Preferred Stock of the
Company will be entitled to the benefits of the Guarantee Agreement.
Except as expressly required by law and in certain other limited
circumstances, the holders of the Series A Preferred Stock are not entitled to
vote. The consent of holders of at least 66% of the outstanding Series A
Preferred Stock and any other series of Preferred Stock ranking on a parity
therewith, voting as a single class, is required to authorize another class of
shares senior to such Preferred Stock. The affirmative vote or consent of the
holders of at least 66% of the outstanding shares of Series A Preferred Stock is
required to amend or repeal any provision of, or add any provision to, the
Articles of Incorporation, including the Articles Supplementary relating to the
Series A Preferred Stock, if such action would materially and adversely alter or
change the rights, preferences or privileges of the Series A Preferred Stock.
FUTURE SERIES OF PREFERRED STOCK
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The statements below describing the Preferred Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Articles of Incorporation and Bylaws and any
applicable amendment to the Articles of Incorporation designating terms of a
series of Preferred Stock (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the Preferred
Stock offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the liquidation
preference per share and the offering price of such Preferred Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Stock;
20
(4) The date from which dividends on such Preferred Stock shall accumulate,
if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) The provision for a sinking fund, if any, for such Preferred Stock;
(7) The provision for redemption, if applicable, of such Preferred Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred Stock
will be convertible into Common Stock, including the conversion price
(or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock;
(11) A discussion of federal income tax considerations applicable to such
Preferred Stock;
(12) The relative ranking and preference of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up
of the affairs of the Company;
(13) Any limitations on issuance of any series of Preferred Stock ranking
senior to or on a parity with such series of Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up
of the affairs of the Company; and
(14) Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of
the Company as a REIT.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred Stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of the Company, rank (i) senior to all classes or series of Common
Stock, and to all equity securities ranking junior to such Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company; (ii) on a parity with all equity securities issued by the
Company the terms of which specifically provide that such equity securities rank
on a parity with the Preferred Stock with respect to dividend rights or rights
upon liquidation, dissolution or winding up of the Company; and (iii) junior to
all equity securities issued by the Company the terms of which specifically
provide that such equity securities rank senior to the Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company. The term "equity securities" does not include convertible debt
securities.
DIVIDENDS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of assets
of the Company legally available for payment, cash dividends at such rates and
on such dates as will be set forth in the applicable Prospectus Supplement. Each
such dividend shall be payable to holders of record as they appear on the share
transfer books of the Company on such record dates as shall be fixed by the
Board of Directors of the Company.
Dividends on any series of the Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Stock for which dividends are non-cumulative, then the holders of such
series of the Preferred Stock will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Company will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
21
If Preferred Stock of any series is outstanding, no dividends will be
declared or paid or set apart for payment on any capital stock of the Company of
any other series ranking, as to dividends, on a parity with or junior to the
Preferred Stock of such series for any period unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for such payment on the Preferred Stock of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Stock does not have a cumulative dividend, full
dividends for the then current dividend period have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for such payment on the Preferred Stock of such series. When
dividends are not paid in full (or a sum sufficient for such full payment is not
so set apart) upon Preferred Stock of any series and the shares of any other
series of Preferred Stock ranking on a parity as to dividends with the Preferred
Stock of such series, all dividends declared upon Preferred Stock of such series
and any other series of Preferred Stock ranking on a parity as to dividends with
such Preferred Stock shall be declared PRO RATA so that the amount of dividends
declared per share of Preferred Stock of such series and such other series of
Preferred Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the Preferred Stock of such series (which shall
not include any accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Stock does not have a cumulative dividend) and such
other series of Preferred Stock bear to each other. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on Preferred Stock of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period, and (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for the then current dividend
period, no dividends (other than in shares of Common Stock or other shares of
capital stock ranking junior to the Preferred Stock of such series as to
dividends and upon liquidation) shall be declared or paid or set aside for
payment nor shall any other distribution be declared or made upon the Common
Stock, or any other capital stock of the Company ranking junior to or on a
parity with the Preferred Stock of such series as to dividends or upon
liquidation, nor shall any shares of Common Stock, or any other shares of
capital stock of the Company ranking junior to or on a parity with the Preferred
Stock of such series as to dividends or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such shares) by the
Company (except by conversion into or exchange for other capital stock of the
Company ranking junior to the Preferred Stock of such series as to dividends and
upon liquidation).
Any dividend payment made on shares of a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred Stock
will be subject to mandatory redemption or redemption at the option of the
Company, as a whole or in part, in each case upon the terms, at the times and at
the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon (which
shall not, if such Preferred Stock does not have a cumulative dividend, include
any accumulation in respect of unpaid dividends for prior dividend periods) to
the date of redemption. The redemption price may be payable in
22
cash or other property, as specified in the applicable Prospectus Supplement. If
the redemption price for Preferred Stock of any series is payable only from the
net proceeds of the issuance of shares of capital stock of the Company, the
terms of such Preferred Stock may provide that, if no such shares of capital
stock shall have been issued or to the extent the net proceeds from any issuance
are insufficient to pay in full the aggregate redemption price then due, such
Preferred Stock shall automatically and mandatorily be converted into the
applicable shares of capital stock of the Company pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred Stock has
a cumulative dividend, full cumulative dividends on all shares of such series of
Preferred Stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the then current dividend period, and (ii) if a
series of Preferred Stock does not have a cumulative dividend, full dividends on
all shares of the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, no shares of such
series of Preferred Stock shall be redeemed unless all outstanding shares of
Preferred Stock of such series are simultaneously redeemed; PROVIDED, HOWEVER,
that the foregoing shall not prevent the purchase or acquisition of Preferred
Stock of such series to preserve the REIT status of the Company or pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of Preferred Stock of such series. In addition, unless (i) if such series
of Preferred Stock has a cumulative dividend, full cumulative dividends on all
outstanding shares of such series of Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period, and (ii) if such series of Preferred Stock does not
have a cumulative dividend, full dividends on the Preferred stock of such series
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for the then current
dividend period, the Company shall not purchase or otherwise acquire directly or
indirectly any shares of Preferred Stock of such series (except by conversion
into or exchange for capital shares of the Company ranking junior to the
Preferred Stock of such series as to dividends and upon liquidation); PROVIDED,
HOWEVER, that the foregoing shall not prevent the purchase or acquisition of
shares of Preferred Stock of such series to preserve the REIT status of the
Company or pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of Preferred Stock of such series.
If fewer than all of the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Company and such shares may be redeemed pro rata from the holders of record
of such shares in proportion to the number of such shares held or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by any other equitable manner determined by the Company.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Stock of
any series to be redeemed at the address shown on the stock transfer books of
the Company. Each notice shall state: (i) the redemption date; (ii) the number
of shares and series of the Preferred Stock to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Preferred Stock are
to be surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
date upon which the holder's conversion rights, if any, as to such shares shall
terminate. If fewer than all the shares of Preferred Stock of any series are to
be redeemed, the notice mailed to each such holder thereof shall also specify
the number of shares of Preferred Stock to be redeemed from each such holder. If
notice of redemption of any Preferred Stock has been given and if the funds
necessary for such redemption have been set aside by the Company in trust for
the benefit of the holders of any Preferred Stock so called for redemption, then
from and after the redemption date dividends will cease to accrue on such
Preferred Stock, and all rights of the holders of such shares will terminate,
except the right to receive the redemption price.
23
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment shall be
made to the holders of any Common Stock or any other class or series of capital
stock of the Company ranking junior to the Preferred Stock in the distribution
of assets upon any liquidation, dissolution or winding up of the Company, the
holders of each series of Preferred Stock shall be entitled to receive out of
assets of the Company legally available for distribution to stockholders
liquidating distributions in the amount of the liquidation preference per share,
if any, set forth in the applicable Prospectus Supplement, plus an amount equal
to all dividends accrued and unpaid thereon (which shall not include any
accumulation in respect of unpaid noncumulative dividends for prior dividend
periods). After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Preferred Stock will have no right or
claim to any of the remaining assets of the Company. In the event that, upon any
such voluntary or involuntary liquidation, dissolution or winding up, the
available assets of the Company are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Preferred Stock and the
corresponding amounts payable on all shares of other classes or series of
capital stock of the Company ranking on a parity with the Preferred Stock in the
distribution of assets, then the holders of the Preferred Stock and all other
such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Stock, the remaining assets of the Company shall be distributed among
the holders of any other classes or series of capital stock ranking junior to
the Preferred Stock upon liquidation, dissolution or winding up, according to
their respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
the Company with or into any other corporation, trust or entity, or the sale,
lease or conveyance of all or substantially all of the property or business of
the Company, shall not be deemed to constitute a liquidation, dissolution or
winding up of the Company.
VOTING RIGHTS
Holders of the Preferred Stock will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Stock, so long as any
shares of Preferred Stock of a series remain outstanding, the Company will not,
without the affirmative vote or consent of the holders of at least two-thirds of
the shares of such series of Preferred Stock outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the authorized or
issued amount of, any class or series of capital stock ranking prior to such
series of Preferred Stock with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or reclassify
any authorized capital stock of the Company into such shares, or create,
authorize or issue any obligation or security convertible into or evidencing the
right to purchase any such shares; or (ii) amend, alter or repeal the provisions
of the Company's Articles of Incorporation or the Designating Amendment for such
series of Preferred Stock, whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of such series of Preferred Stock or the holders
thereof; PROVIDED, HOWEVER, with respect to the occurrence of any of the Events
set forth in (ii) above, so long as the Preferred Stock remains outstanding with
the terms thereof materially unchanged, taking into account that upon the
occurrence of an Event the Company may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of holders of
Preferred Stock, and PROVIDED FURTHER that (x) any increase in the amount of the
authorized Preferred Stock or the creation or issuance of any other series of
Preferred Stock, or (y) any increase in the amount of authorized shares of such
series or any other series of Preferred Stock, in each case ranking on a parity
with or junior to the Preferred Stock of such series with respect to payment of
24
dividends or the distribution of assets upon liquidation, dissolution or winding
up, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Stock shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred Stock
is convertible into Common Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock into which the shares of Preferred Stock are convertible, the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such series of Preferred Stock.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
capital stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the Code to include certain entities) during the last half of a
taxable year. To assist the Company in meeting this requirement, the Company may
take certain actions to limit the beneficial ownership, directly or indirectly,
by individuals of the Company's outstanding equity securities, including any
Preferred Stock. Therefore, the Designating Amendment for each series of
Preferred Stock may contain provisions restricting the ownership and transfer of
the Preferred Stock. The applicable Prospectus Supplement will specify any
additional ownership limitation relating to a series of Preferred Stock. See
"Restrictions on Transfers of Capital Stock."
TRANSFER AGENT
The transfer agent and registrar for the Preferred Stock will be set forth
in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
The Company may, at its option, elect to offer Depositary Shares rather than
full shares of Preferred Stock. In the event such option is exercised, each of
the Depositary Shares will represent ownership of and entitlement to all rights
and preferences of a fraction of a share of Preferred Stock of a specified
series (including dividend, voting, redemption and liquidation rights). The
applicable fraction will be specified in the Prospectus Supplement. The shares
of Preferred Stock represented by the Depositary Shares will be deposited with a
Depositary (the "Depositary") named in the applicable Prospectus Supplement,
under a Deposit Agreement (the "Deposit Agreement"), among the Company, the
Depositary and the holders of the Depositary Receipts. Certificates evidencing
Depositary Shares ("Depositary Receipts") will be delivered to those persons
purchasing Depositary Shares in the offering. The Depositary will be the
transfer agent, registrar and dividend disbursing agent for the Depositary
Shares. Holders of Depositary Receipts agree to be bound by the Deposit
Agreement, which requires holders to take certain actions such as filing proof
of residence and paying certain charges.
The summary of terms of the Depositary Shares contained in this Prospectus
does not purport to be complete and is subject to, and qualified in its entirety
by, the provisions of the Deposit Agreement, the Articles of Incorporation and
the form of Designating Amendment for the applicable series of Preferred Stock.
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DIVIDENDS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the series of Preferred Stock represented
by the Depositary Shares to the record holders of Depositary Receipts in
proportion to the number of Depositary Shares owned by such holders on the
relevant record date, which will be the same date as the record date fixed by
the Company for the applicable series of Preferred Stock. The Depositary,
however, will distribute only such amount as can be distributed without
attributing to any Depositary Share a fraction of one cent, and any balance not
so distributed will be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Receipts then
outstanding.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Receipts
entitled thereto, in proportion, as nearly as may be practicable, to the number
of Depositary Shares owned by such holders on the relevant record date, unless
the Depositary determines (after consultation with the Company) that it is not
feasible to make such distribution, in which case the Depositary may (with the
approval of the Company) adopt any other method for such distribution as it
deems equitable and appropriate, including the sale of such property (at such
place or places and upon such terms as it may deem equitable and appropriate)
and distribution of the net proceeds from such sale to such holders.
No distribution will be made in respect of any Depositary Share to the
extent that it represents any Preferred Stock converted into Excess Stock.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the affairs of
the Company, whether voluntary or involuntary, the holders of each Depositary
Share will be entitled to the fraction of the liquidation preference accorded
each share of the applicable series of Preferred Stock, as set forth in the
Prospectus Supplement.
REDEMPTION
If the series of Preferred Stock represented by the applicable series of
Depositary Shares is redeemable, such Depositary Shares will be redeemed from
the proceeds received by the Depositary resulting from the redemption, in whole
or in part, of Preferred Stock held by the Depositary. Whenever the Company
redeems any Preferred Stock held by the Depositary, the Depositary will redeem
as of the same redemption date the number of Depositary Shares representing the
Preferred Stock so redeemed. The Depositary will mail the notice of redemption
promptly upon receipt of such notice from the Company and not less than 30 nor
more than 60 days prior to the date fixed for redemption of the Preferred Stock
and the Depositary Shares to the record holders of the Depositary Receipts.
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VOTING
Promptly upon receipt of notice of any meeting at which the holders of the
series of Preferred Stock represented by the applicable series of Depositary
Shares are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Receipts as of
the record date for such meeting. Each such record holder of Depositary Receipts
will be entitled to instruct the Depositary as to the exercise of the voting
rights pertaining to the number of shares of Preferred Stock represented by such
record holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote such Preferred Stock represented by such Depositary Shares
in accordance with such instructions, and the Company will agree to take all
action which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting any of the
Preferred Stock to the extent that it does not receive specific instructions
from the holders of Depositary Receipts.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of Depositary Receipts at the principal office of the
Depositary, upon payment of any unpaid amount due the Depositary, and subject to
the terms of the Deposit Agreement, the owner of the Depositary Shares evidenced
thereby is entitled to delivery of the number of whole shares of Preferred Stock
and all money and other property, if any, represented by such Depositary Shares.
Partial shares of Preferred Stock will not be issued. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares. Holders of Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Receipts evidencing Depositary Shares therefor.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary. However, any
amendment which materially and adversely alters the rights of the holders (other
than any change in fees) of Depositary Shares will not be effective unless such
amendment has been approved by at least a majority of the Depositary Shares then
outstanding. No such amendment may impair the right, subject to the terms of the
Deposit Agreement, of any owner of any Depositary Shares to surrender the
Depositary Receipt evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the Preferred Stock and all money and other
property, if any, represented thereby, except in order to comply with mandatory
provisions of applicable law.
The Deposit Agreement will be permitted to be terminated by the Company upon
not less than 30 days prior written notice to the applicable Depositary if (i)
such termination is necessary to preserve the Company's status as a REIT or (ii)
a majority of each series of Preferred Stock affected by such termination
consents to such termination, whereupon such Depositary will be required to
deliver or make available to each holder of Depositary Receipts, upon surrender
of the Depositary Receipts held by such holder, such number of whole or
fractional shares of Preferred Stock as are represented by the Depositary Shares
evidenced by such Depositary Receipts together with any other property held by
such Depositary with respect to such Depositary Receipts. The Company will agree
that if the Deposit Agreement is terminated to preserve the Company's status as
a REIT, then the Company will use its best efforts to list the Preferred Stock
issued upon surrender of the related Depositary Shares on a national securities
exchange. In addition, the Deposit Agreement will automatically terminate if (i)
all outstanding Depositary Shares thereunder shall have been redeemed, (ii)
there shall have been a final distribution in respect of the related Preferred
Stock in connection with any liquidation, dissolution or winding up of the
Company and such distribution shall have been distributed to the holders of
Depositary Receipts evidencing the
27
Depositary Shares representing such Preferred Stock or (iii) each share of the
related Preferred Stock shall have been converted into stock of the Company not
so represented by Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and initial issuance of the Depositary Shares, and redemption of
the Preferred Stock and all withdrawals of Preferred Stock by owners of
Depositary Shares. Holders of Depositary Receipts will pay transfer, income and
other taxes and governmental charges and certain other charges as are provided
in the Deposit Agreement to be for their accounts. In certain circumstances, the
Depositary may refuse to transfer Depositary Shares, may withhold dividends and
distributions and sell the Depositary Shares evidenced by such Depositary
Receipt if such charges are not paid.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Receipts all
reports and communications from the Company which are delivered to the
Depositary and which the Company is required to furnish to the holders of the
Preferred Stock. In addition, the Depositary will make available for inspection
by holders of Depositary Receipts at the principal office of the Depositary, and
at such other places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Preferred Stock.
Neither the Depositary nor the Company assumes any obligation or will be
subject to any liability under the Deposit Agreement to holders of Depositary
Receipts other than for its negligence or willful misconduct. Neither the
Depositary nor the Company will be liable if it is prevented or delayed by law
or any circumstance beyond its control in performing its obligations under the
Deposit Agreement. The obligations of the Company and the Depositary under the
Deposit Agreement will be limited to performance in good faith of their duties
thereunder, and they will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Depositary may rely on
written advice of counsel or accountants, on information provided by holders of
the Depositary Receipts or other persons believed in good faith to be competent
to give such information and on documents believed to be genuine and to have
been signed or presented by the proper party or parties.
In the event the Depositary shall receive conflicting claims, requests or
instructions from any holders of Depositary Receipts, on the one hand, and the
Company, on the other hand, the Depositary shall be entitled to act on such
claims, requests or instructions received from the Company.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice for
resignation or removal and must be a bank or trust company having its principal
office in the United States of America and having a combined capital and surplus
of at least $150,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of Depositary Shares will be treated for Federal income tax purposes
as if they were owners of the Preferred Stock represented by such Depositary
Shares. Accordingly, such owners will be entitled to
28
take into account, for Federal income tax purposes, income and deductions to
which they would be entitled if they were holders of such Preferred Stock. In
addition, (i) no gain or loss will be recognized for Federal income tax purposes
upon the withdrawal of Preferred Stock in exchange for Depositary Shares, (ii)
the tax basis of each share of Preferred Stock to an exchanging owner of
Depositary Shares will, upon such exchange, be the same as the aggregate tax
basis of the Depositary Shares exchanged therefor, and (iii) the holding period
for Preferred Stock in the hands of an exchanging owner of Depositary Shares
will include the period during which such person owned such Depositary Shares.
DESCRIPTION OF COMMON STOCK
The description of the Company's Common Stock set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Articles of Incorporation and the Bylaws.
GENERAL
Under the Articles of Incorporation, the Company has authority to issue 100
million shares of Common Stock, par value $.01 per share. Under Maryland law,
stockholders generally are not responsible for the corporation's debts or
obligations. At February 13, 1997, the Company had outstanding 30,043,617 shares
of Common Stock.
TERMS
Subject to the preferential rights of any other shares or series of stock
(including Preferred Stock outstanding from time to time) and to the provisions
of the Articles of Incorporation regarding Excess Stock, holders of shares of
Common Stock will be entitled to receive dividends on shares of Common Stock if,
as and when authorized and declared by the Board of Directors of the Company out
of assets legally available therefor and to share ratably in the assets of the
Company legally available for distribution to its stockholders in the event of
its liquidation, dissolution or winding up after payment of, or adequate
provision for, all known debts and liabilities of the Company.
Subject to the provisions of the Articles of Incorporation regarding Excess
Stock, each outstanding share of Common Stock entitles the holder to one vote on
all matters submitted to a vote of stockholders, including the election of
Directors, and, except as otherwise required by law or except as provided with
respect to any other class or series of stock, the holders of Common Stock will
possess the exclusive voting power. There is no cumulative voting in the
election of Directors, which means that the holders of a majority of the
outstanding shares of Common Stock can elect all of the Directors then standing
for election, and the holders of the remaining shares of Common Stock will not
be able to elect any Directors.
Holders of Common Stock have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company.
Subject to the provisions of the Articles of Incorporation regarding Excess
Stock, all shares of Common Stock will have equal dividend, distribution,
liquidation and other rights, and will have no preference, appraisal or exchange
rights.
Pursuant to the MGCL, a corporation generally cannot dissolve, amend its
Articles of Incorporation, merge, sell all or substantially all of its assets,
engage in a share exchange or engage in similar transactions outside the
ordinary course of business unless approved by the affirmative vote of
stockholders holding at least two-thirds of the shares entitled to vote on the
matter unless a lesser percentage (but not less than a majority of all of the
votes to be cast on the matter) is set forth in the corporation's Articles of
Incorporation. The Articles of Incorporation do not provide for a lesser
percentage in such situations.
29
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Code, not more than 50% in
value of its outstanding capital stock may be owned, directly or indirectly, by
five or fewer individuals (as defined in the Code to include certain entities)
during the last half of a taxable year. To assist the Company in meeting this
requirement, the Company may take certain actions to limit the beneficial
ownership, directly or indirectly, by individuals of the Company's outstanding
equity securities. See "Restrictions on Transfers of Capital Stock."
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is KeyCorp Shareholder
Services, Inc. of Cleveland, Ohio.
RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, among other things, not
more than 50% in value of its outstanding capital stock may be owned, directly
or indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year, and such capital stock
must be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of 12 months or during a proportionate part of a shorter tax year.
See "Certain Federal Income Tax Considerations." To ensure that the Company
remains a qualified REIT, the Articles of Incorporation, subject to certain
exceptions, provide that no holder may own, or be deemed to own by virtue of the
attribution provisions of the Code, more than an aggregate of 9.9% in value of
the Company's capital stock. Any transfer of capital stock or any security
convertible into capital stock that would create a direct or indirect ownership
of capital stock in excess of the ownership limit or that would result in the
disqualification of the Company as a REIT, including any transfer that results
in the capital stock being owned by fewer than 100 persons or results in the
Company being "closely held" within the meaning of Section 856(h) of the Code,
shall be null and void, and the intended transferee will acquire no rights to
the capital stock. Capital stock owned, or deemed to be owned, or transferred to
a stockholder in excess of the ownership limit will automatically be exchanged
for shares of Excess Stock that will be transferred, by operation of law, to the
Company as trustee of a trust for the exclusive benefit of the transferees to
whom such capital stock may be ultimately transferred without violating the
ownership limit. While the Excess Stock is held in trust, it will not be
entitled to vote, it will not be considered for purposes of any stockholder vote
or the determination of a quorum for such vote, and it will not be entitled to
participate in the accumulation or payment of dividends or other distributions.
A transferee of Excess Stock may, at any time such Excess Stock is held by the
Company in trust, designate as beneficiary of the transferee stockholder's
interest in the trust representing the Excess Stock any individual whose
ownership of the capital stock exchanged into such Excess Stock would be
permitted under the ownership limit, and may transfer such interest to such
beneficiary at a price not in excess of the price paid by the original
transferee-stockholder for the capital stock that was exchanged into Excess
Stock. Immediately upon the transfer to the permitted beneficiary, the Excess
Stock will automatically be exchanged for capital stock of the class from which
it was converted. In addition, the Company will have the right, for a period of
90 days during the time any Excess Stock is held by the Company in trust, and,
with respect to Excess Stock resulting from the attempted transfer of Preferred
Stock, at any time when any outstanding shares of Preferred Stock of such series
are being redeemed, to purchase all or any portion of the Excess Stock from the
original transferee-stockholder at the lesser of the price paid for the capital
stock by the original transferee-stockholder and the market price (as determined
in the manner set forth in the Articles of Incorporation) of the capital stock
on the date the Company exercises its option to purchase or, in the case of a
purchase of Excess Stock attributed to Preferred Stock which has been called for
redemption, at its stated value, plus all accumulated and unpaid dividends to
the date of redemption. The 90-day period begins on the date of the violative
transfer if the original
30
transferee-stockholder gives notice to the Company of the transfer or, if no
such notice is given, the date the Board of Directors determines that a
violative transfer has been made.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
This section is a summary of the material federal income tax matters of
general application pertaining to REITs under the Code. The discussion is based
on current law and does not purport to deal with all aspects of federal income
taxation that may be relevant to investors subject to special treatment under
the federal income tax laws, such as tax-exempt investors, dealers in securities
or foreign persons. The provisions of the Code pertaining to REITs are highly
technical and complex and sometimes involve mixed questions of fact and law. In
addition, this section does not discuss foreign, state or local taxation. The
Company has received an opinion from Cahill Gordon & Reindel as to the
conclusions of law expressed in this summary. Prospective investors should
consult their own tax advisors regarding the federal, state, local, foreign and
other tax consequences specific to them of holding and disposing of the
Securities.
TAXATION OF THE COMPANY
In the opinion of Cahill Gordon & Reindel, commencing with its taxable year
ended December 31, 1994, the Company has been organized in conformity with the
requirements for qualification as a REIT under the Code, and the Company's
method of operation will enable the Company to continue so to qualify, provided
that the Company continues to satisfy the various requirements applicable under
the Code to REITs, as described herein. Cahill Gordon & Reindel's opinion is
based on various assumptions and is conditioned upon certain representations as
to factual matters made by the Company and certain partnerships through which
the Company holds substantially all of its assets (the "Partnerships").
Moreover, such qualification and taxation as a REIT depend upon the Company's
ability to meet, through actual annual operating results, distribution levels,
diversity of stock ownership and various other qualification tests imposed under
the Code discussed below, the results of which will not be reviewed by Cahill
Gordon & Reindel. Accordingly, no assurance can be given that the actual results
of the Company's operation for any one taxable year will satisfy such
requirements.
To qualify as a REIT under the Code for a taxable year, the Company must
meet certain organizational and operational requirements, which generally
require it to be a passive investor in operating real estate and to avoid
excessive concentration of ownership of its capital stock. Initially, its
principal activities must be real estate related. Generally, at least 75% of the
value of the total assets of the Company at the end of each calendar quarter
must consist of real estate assets, cash or governmental securities. The Company
may not own more than 10% of the outstanding voting securities of any
corporation and the value of any one issuer's securities may not exceed 5% of
the Company's gross assets; shares of qualified REITs, qualified temporary
investments and shares of certain wholly owned subsidiary corporations are
exempt from these prohibitions. The Company holds assets through certain wholly
owned subsidiary corporations and holds Preferred Stock interests in certain
corporations that provide property management services to third parties; the
Company has been advised by Cahill Gordon & Reindel, based on certain
representations, that these holdings do not violate the prohibition on ownership
of voting securities. Additionally, gross income from the sale or other
disposition of stock and securities held for less than one year and of real
property held for less than four years must constitute less than 30% of the
gross income for each taxable year of a REIT. For each taxable year, at least
75% of a REIT's gross income must be derived from specified real estate sources
and 95% must be derived from such real estate sources plus certain other
permitted sources. Real estate income for purposes of these requirements
includes gain from the sale of real property not held primarily for sale to
customers in the ordinary course of business, dividends on REIT shares, interest
on loans secured by mortgages on real property, certain rents from real property
and income from foreclosure property. For rents to qualify, they may not be
based on the income or profits of any person, except that they may be based on a
percentage or percentages of gross income or receipts and, subject to certain
limited exceptions, the REIT may not manage the property or furnish
31
services to tenants except through an independent contractor which is paid an
arm's-length fee and from which the REIT derives no income. Substantially all of
the Company's assets are held through the Partnerships. In general, in the case
of a REIT that is a partner in a partnership, applicable regulations treat the
REIT as holding directly its proportionate share of the assets of the
partnership and as being entitled to the income of the partnership attributable
to such share.
The Company must satisfy certain ownership restrictions that limit (i)
concentration of ownership of the Company's capital stock by a few individuals
and (ii) ownership by the Company of its tenants. The outstanding capital stock
of the Company must be held by at least 100 stockholders. No more than 50% in
value of the outstanding capital stock, including in some circumstances capital
stock into which outstanding securities might be converted, may be owned
actually or constructively by five or fewer individuals or certain other
entities at any time during the last half of the Company's taxable year.
Accordingly, the Articles of Incorporation contain certain restrictions
regarding the transfer of Common Stock, Preferred Stock and any other
outstanding securities convertible into Common Stock when necessary to maintain
the Company's qualification as a REIT under the Code. However, because the Code
imposes broad attribution rules in determining constructive ownership, no
assurance can be given that the restrictions contained in the Articles of
Incorporation will be effective in maintaining the Company's REIT status. See
"Restrictions on Transfers of Capital Stock."
So long as the Company qualifies for taxation as a REIT and distributes at
least 95% of its REIT taxable income (computed without regard to net capital
gain or the dividends paid deduction) for its taxable year to its stockholders
annually, the Company itself will not be subject to federal income tax on that
portion of such income distributed to stockholders. The Company will be taxed at
regular corporate rates on all income not distributed to stockholders. The
Company's policy is to distribute at least 95% of its taxable income. REIT's
also may incur taxes for certain other activities or to the extent distributions
do not satisfy certain other requirements.
Failure of the Company to qualify during any taxable year as a REIT could,
unless certain relief provisions were available, have a material adverse effect
upon its stockholders. If disqualified for taxation as a REIT for a taxable
year, the Company also would be disqualified for taxation as a REIT for the next
four taxable years, unless the failure were considered to be due to reasonable
cause and not willful neglect. The Company would be subject to federal income
tax at corporate rates on all of its taxable income and would not be able to
deduct the dividends paid, which could result in a discontinuation of or
substantial reduction in dividends to stockholders. Dividends also would be
subject to the regular tax rules applicable to dividends received by
stockholders of corporations. Should the failure to qualify as a REIT be
determined to have occurred retroactively in an earlier tax year of the Company,
the imposition of a substantial federal income tax liability on the Company
attributable to any nonqualifying tax years may adversely affect the Company's
ability to pay dividends. In the event that the Company fails to meet certain
income tests applicable to REITs, it may, generally, nonetheless retain its
qualification as a REIT if it pays a 100% tax on the amount by which it failed
to meet the relevant income test so long as such failure was considered to be
due to reasonable cause and not willful neglect. Any such taxes would adversely
affect the Company's ability to pay dividends and distributions.
PLAN OF DISTRIBUTION
The Company and the Operating Partnership may sell Securities through
underwriters or dealers, directly to one or more purchasers, through agents or
through a combination of any such methods of sale. Any underwriter or agent
involved in the offer and sale of the Securities will be named in the applicable
Prospectus Supplement.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices.
32
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company, from the Operating Partnership or from
purchasers of Securities, for whom they may act as agents, in the form of
discounts, concessions or commissions. Underwriters may sell Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Underwriters, dealers and
agents that participate in the distribution of Securities may be deemed to be
underwriters under the Securities Act, and any discounts or commissions they
receive from the Company or the Operating Partnership and any profit on the
resale of Securities they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company or the Operating
Partnership will be described, in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, each
series of Securities will be a new issue with no established trading market,
other than the Common Stock, which is listed on the NYSE. Any shares of Common
Stock sold pursuant to a Prospectus Supplement will be listed on the NYSE,
subject to official notice of issuance. The Company or the Operating Partnership
may elect to list any series of Debt Securities, Preferred Stock or Depositary
Shares on an exchange, but neither is obligated to do so. It is possible that
one or more underwriters may make a market in a series of Securities, but will
not be obligated to do so and may discontinue any market making at any time
without notice. Therefore, no assurance can be given as to the liquidity of the
trading market for the Securities.
Under agreements into which the Company or the Operating Partnership may
enter, underwriters, dealers and agents who participate in the distribution of
Securities may be entitled to indemnification by the Company or the Operating
Partnership against certain liabilities, including liabilities under the
Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be tenants of, the Company or the Operating Partnership in the
ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Company or the
Operating Partnership will authorize underwriters or other persons acting as the
Company's or the Operating Partnership's agents to solicit offers by certain
institutions to purchase Securities from the Company or the Operating
Partnership pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company or the Operating Partnership, as
the case may be. The obligations of any purchaser under any such contract will
be subject to the condition that the purchase of the Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states Securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of Securities offered hereby may not engage in
market making activities with respect to the Securities for a period of two
business days prior to the commencement of such distribution.
33
LEGAL MATTERS
Certain legal matters, including the legality of the Securities covered by
this Prospectus and certain tax matters, will be passed upon for the Company by
Cahill Gordon & Reindel (a partnership including a professional corporation),
New York, New York, and for any underwriters, dealers or agents by Rogers &
Wells, New York, New York. Cahill Gordon & Reindel and Rogers & Wells will rely
as to all matters of Maryland law on the opinion of McGuire, Woods, Battle &
Boothe, L.L.P., Baltimore, Maryland.
EXPERTS
The financial statements and schedule thereto of the Company incorporated by
reference in this Prospectus or elsewhere in the Registration Statement and the
consolidated financial statements and schedule thereto of the Operating
Partnership included in this Prospectus, to the extent and for the periods
indicated in their reports, have been audited by Coopers & Lybrand L.L.P.,
independent accountants, and are included or incorporated herein in reliance
upon the authority of said firm as experts in giving said reports.
34
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
INDEX TO FINANCIAL STATEMENTS AND OTHER INFORMATION
PAGE
-----------
FINANCIAL STATEMENTS
Report of Independent Accountants F-2
Consolidated Balance Sheets of First Industrial, L.P. (the "Partnership") as of September 30, 1996
(unaudited) and December 31, 1995 and 1994 F-3
Consolidated Statements of Operations of the Partnership for the nine month periods ended September 30,
1996 (unaudited) and 1995 (unaudited), the year ended December 31, 1995 and the six month period ended
December 31, 1994 and the Combined Statements of Operations of the Contributing Businesses for the six
month period ended June 30, 1994 and the year ended December 31, 1993 F-4
Consolidated Statements of Changes in Partners' Capital of the Partnership for the nine month period
ended September 30, 1996 (unaudited), the year ended December 31, 1995, and the six month period ended
December 31, 1994 and the Combined Statements of Changes in Net Deficit of the Contributing Businesses
for the six month period ended June 30, 1994 and the year ended December 31, 1993 F-5
Consolidated Statements of Cash Flows of the Partnership for the nine month periods ended September 30,
1996 (unaudited) and 1995 (unaudited), the year ended December 31, 1995 and the six month period ended
December 31, 1994 and the Combined Statements of Cash Flows of the Contributing Businesses for the six
month period ended June 30, 1994 and the year ended December 31, 1993 F-6
Notes to Consolidated and Combined Financial Statements F-8
Schedule III: Real Estate and Accumulated Depreciation F-25
OTHER INFORMATION
Management's Discussion and Analysis of Financial Condition and Results of Operations F-32
Selected Financial Data F-37
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of First Industrial, L.P.
and the Contributing Businesses:
We have audited the consolidated financial statements and the financial
statement schedule of First Industrial, L.P. (the "Partnership") and the
combined financial statements of the Contributing Businesses as listed on page
F-1 of this Prospectus. These financial statements and the financial statement
schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of First
Industrial, L.P. as of December 31, 1995 and 1994, and the consolidated results
of their operations and their cash flows for the year ended December 31, 1995,
and the six month period ended December 31, 1994 and of the Contributing
Businesses for the six month period ended June 30, 1994 and the year ended
December 31, 1993 in conformity with generally accepted accounting principles.
In addition, in our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
February 12, 1997
F-2
FIRST INDUSTRIAL, L.P.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
-------------------------------------
SEPTEMBER DECEMBER DECEMBER
30, 31, 31,
1996 1995 1994
-------------------------------------
(UNAUDITED)
ASSETS
Investment in Real Estate:
Land................................................ $ 141,405 $ 109,227 $ 98,193
Buildings and Improvements.......................... 806,073 645,872 567,130
Furniture, Fixtures and Equipment................... 1,662 2,024 2,159
Construction in Progress............................ 15,581 393 2,126
Less: Accumulated Depreciation...................... (85,018) (68,749) (49,314)
----------- ----------- -----------
Net Investment in Real Estate..................... 879,703 688,767 620,294
Cash and Cash Equivalents............................. 4,538 8,373 8,986
Restricted Cash....................................... 9,567 11,732 13,203
Tenant Accounts Receivable, Net....................... 4,938 2,561 3,797
Deferred Rent Receivable.............................. 8,416 7,676 6,092
Interest Rate Protection Agreements, Net.............. 8,415 8,529 16,605
Deferred Financing Costs, Net......................... 8,091 9,422 12,142
Prepaid Expenses and Other Assets..................... 19,944 20,247 9,869
----------- ----------- -----------
Total Assets........................................ $ 943,612 $ 757,307 $ 690,988
----------- ----------- -----------
----------- ----------- -----------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage Loans Payable................................ $ 392,338 $ 346,850 $ 300,000
Construction Loans Payable............................ -- 4,873 --
Acquisition Facilities Payable........................ 62,310 48,235 48,700
Promissory Notes Payable.............................. 9,919 -- --
Accounts Payable and Accrued Expenses................. 20,810 12,819 12,760
Rents Received in Advance and Security Deposits....... 4,894 4,124 3,704
Distributions Payable................................. 12,802 9,954 9,648
----------- ----------- -----------
Total Liabilities................................... 503,073 426,855 374,812
----------- ----------- -----------
Minority Interest....................................... 44,055 43,683 2,632
Commitments and Contingencies........................... -- -- --
Partners' Capital:
Total Partners' Capital............................. 396,484 286,769 313,544
----------- ----------- -----------
Total Liabilities and Partners' Capital............. $ 943,612 757,307 $ 690,988
----------- ----------- -----------
----------- ----------- -----------
The accompanying notes are an integral part of the financial statements.
F-3
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------------------
THE PARTNERSHIP
-----------------------------------------------------
SIX CONTRIBUTING BUSINESSES
NINE MONTHS --------------------------
MONTHS ENDED NINE YEAR ENDED ENDED SIX YEAR ENDED
SEPTEMBER MONTHS ENDED DECEMBER DECEMBER MONTHS ENDED DECEMBER
30, SEPTEMBER 30, 31, 31, JUNE 30, 31,
1996 1995 1995 1994 1994 1993
---------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
Revenues:
Rental Income $ 78,054 $ 61,680 $ 83,522 $ 36,883 $ 18,041 $ 26,814
Tenant Recoveries and Other
Income 23,407 16,852 22,952 9,674 4,775 6,423
------------ ------------- ----------- ----------- ------------- -----------
Total Revenues 101,461 78,532 106,474 46,557 22,816 33,237
------------ ------------- ----------- ----------- ------------- -----------
Expenses:
Real Estate Taxes 17,061 12,563 16,998 7,409 3,273 4,947
Repairs and Maintenance 4,231 2,953 3,872 1,582 1,225 1,587
Property Management 3,372 2,563 3,539 1,357 677 1,006
Utilities 2,758 1,567 2,060 822 570 748
Insurance 824 676 903 385 184 186
Other 736 573 930 298 107 358
General and Administrative 2,321 2,428 3,792 1,047 795 1,416
Interest Expense 21,600 21,109 28,591 10,588 9,868 14,595
Interest Expense
(affiliated) -- -- -- -- 1,905 3,592
Amortization of Interest
Rate Protection
Agreements and Deferred
Financing Costs 2,412 3,684 4,438 2,904 858 997
Depreciation and Other
Amortization 20,456 16,320 22,264 9,802 4,744 7,105
Disposition of Interest
Rate
Protection Agreement -- 6,410 6,410 -- -- --
------------ ------------- ----------- ----------- ------------- -----------
Total Expenses 75,771 70,846 93,797 36,194 24,206 36,537
------------ ------------- ----------- ----------- ------------- -----------
Income (Loss) Before Gain on
Sales of Properties,
Management and Construction
(Loss), Minority Interest
and Extraordinary (Loss) 25,690 7,686 12,677 10,363 (1,390) (3,300)
Gain on Sales of Properties 4,320 -- -- -- -- --
------------ ------------- ----------- ----------- ------------- -----------
Income (Loss) Before
Management and Construction
(Loss), Minority Interest
and Extraordinary Item 30,010 7,686 12,677 10,363 (1,390) (3,300)
Management and Construction
(Loss) -- -- -- -- (81) (99)
Income Allocated to Minority
Interest (3,178) (65) (554) (69) -- --
------------ ------------- ----------- ----------- ------------- -----------
Income (Loss) Before
Extraordinary (Loss) 26,832 7,621 12,123 10,294 (1,471) (3,399)
Extraordinary (Loss) (821) -- -- -- (1,449) --
------------ ------------- ----------- ----------- ------------- -----------
Net Income (Loss) $ 26,011 $ 7,621 $ 12,123 $ 10,294 $ (2,920) $ (3,399)
------------ ------------- ----------- ----------- ------------- -----------
------------ ------------- ----------- ----------- ------------- -----------
The accompanying notes are in integral part of the financial statements.
F-4
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES
IN PARTNERS' CAPITAL AND NET DEFICIT
(DOLLARS IN THOUSANDS)
---------------------------------------------------------
CONTRIBUTING THE
THE PARTNERSHIP BUSINESSES PARTNERSHIP
-------------------- ----------- -----------
GENERAL LIMITED NET MINORITY
TOTAL PARTNER PARTNERS DEFICIT INTEREST
---------------------------------------------------------
Balance at December 31, 1992............. $ (32,876) $ -- $ -- $ (32,876) $ --
Contributions.......................... 2,671 216 -- 2,455 --
Distributions.......................... (3,944) -- -- (3,944) --
Net Loss............................... (3,399) -- -- (3,399) --
--------- --------- --------- ----------- -----------
Balance at December 31, 1993............. (37,548) 216 -- (37,764) --
Contributions.......................... 343,501 324,705 -- 18,796 2,615
Distributions.......................... (29,011) -- -- (29,011) --
Net Loss............................... (2,920) -- -- (2,920) --
Acquisition and Contribution of
Contributing Businesses' Interests... 18,112 (53,869) 21,082 50,899 --
--------- --------- --------- ----------- -----------
Balance at June 30, 1994................. 292,134 271,052 21,082 -- 2,615
Contribution........................... 30,412 30,412 -- --
Distributions.......................... (19,296) (17,843) (1,453) -- (52)
Net Income............................. 10,294 9,519 775 -- 69
--------- --------- --------- ----------- -----------
Balance at December 31, 1994............. 313,544 293,140 20,404 -- 2,632
Contribution........................... -- -- -- -- 41,302
Distributions.......................... (38,898) (36,003) (2,895) -- (805)
Unit Conversion........................ -- 1,005 (1,005) -- --
Net Income............................. 12,123 11,215 908 -- 554
--------- --------- --------- ----------- -----------
Balance at December 31, 1995............. 286,769 269,357 17,412 -- 43,683
--------- --------- --------- ----------- -----------
Contribution (Unaudited)............... 122,022 106,343 15,679 -- 406
Distributions (Unaudited).............. (38,318) (35,299) (3,019) -- (3,212)
Unit Conversion (Unaudited)............ -- 203 (203) -- --
Net Income (Unaudited)................. 26,011 24,068 1,943 -- 3,178
--------- --------- --------- ----------- -----------
Balance at September 30, 1996
(Unaudited).............................. $ 396,484 $ 364,672 $ 31,812 $ -- $ 44,055
--------- --------- --------- ----------- -----------
--------- --------- --------- ----------- -----------
The accompanying notes are an integral part of the financial statements.
F-5
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
----------------------------------------------------------------------------------------
THE PARTNERSHIP CONTRIBUTING BUSINESSES
---------------------------------------------------------- ----------------------------
NINE NINE SIX SIX
MONTHS ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED MONTHS ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1995 1994 1994 1993
----------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $ 26,011 $ 7,621 $ 12,123 $ 10,294 $ (2,920) $ (3,399)
Income Allocated to Minority
Interest 3,178 65 554 69 -- --
------------- ------------- ------------- ------------- ------------- -------------
Income (Loss) Before Minority
Interest 29,189 7,686 12,677 10,363 (2,920) (3,399)
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by Operating
Activities:
Depreciation 17,888 14,355 19,440 8,713 4,661 6,697
Amortization of Interest
Rate Protection Agreement
and Deferred Financing
Costs 2,412 3,684 4,438 2,904 858 997
Other Amortization 2,568 1,965 2,824 1,089 83 408
Gain on Sales of Properties (4,320) -- -- -- -- --
Provision for Bad Debts 200 93 352 148 -- 286
Extraordinary Loss 821 -- -- -- 1,449 --
Loss from Disposition of
Interest Rate Protection
Agreement -- 6,410 6,410 -- -- --
(Increase) in Accounts
Receivable and Other
Assets (4,782) (336) (8,372) (6,474) (4,544) (4,475)
(Increase) in Deferred Rent
Receivable (740) (1,341) (1,584) (1,122) (92) (221)
Increase (Decrease) in
Accounts Payable and
Accrued Expenses 2,724 (2,394) 1,308 7,909 7,807 8,407
Organization Costs -- (117) (153) (1,610) (1,466) --
(Increase) Decrease in
Restricted Cash 926 (1,268) (2,278) (3,966) (810) --
------------- ------------- ------------- ------------- ------------- -------------
Net Cash Provided by
Operating Activities 46,886 28,737 35,062 17,954 5,026 8,700
------------- ------------- ------------- ------------- ------------- -------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of and Additions to
Investment in Real Estate (175,894) (71,987) (87,908) (72,913) (367,257) (17,124)
Proceeds from Sales of
Investment in Real Estate 12,119 -- -- -- -- --
(Increase) Decrease in
Restricted Cash 1,239 3,108 3,749 (927) (7,500) --
------------- ------------- ------------- ------------- ------------- -------------
Net Cash Used in Investing
Activities (162,536) (68,879) (84,159) (73,840) (374,757) (17,124)
------------- ------------- ------------- ------------- ------------- -------------
The accompanying notes are an integral part of the financial statements.
F-6
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
(DOLLARS IN THOUSANDS)
----------------------------------------------------------------------------------------
THE PARTNERSHIP CONTRIBUTING BUSINESSES
---------------------------------------------------------- ----------------------------
NINE NINE SIX SIX
MONTHS ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED MONTHS ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1995 1994 1994 1993
----------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Contributions 106,749 -- 41,302 25,604 348,243 2,455
Distributions (38,402) (29,197) (39,703) (9,700) (29,011) (3,944)
Proceeds from Mortgage Loans
Payable 36,750 9,040 52,850 -- 381,743 19,270
Repayments on Mortgage Loans
Payable (679) -- (6,000) -- (268,935) (8,688)
Proceeds from Acquistion
Facilities Payable 75,197 60,800 83,943 48,700 5,000 --
Repayments on Acquisition
Facilities Payable (61,121) -- (84,408) (5,000) -- --
Proceeds from Construction
Loans Payable -- -- 4,873 -- -- --
Repayment on Construction
Loans Payable (4,873) -- -- -- -- --
Repayment of Notes Payable -- -- -- -- (34,553) --
Cost of Debt Issuance and
Interest Rate Protection
Agreement (1,806) (2,149) (4,373) (2,181) (28,335) --
------------- ------------- ------------- ------------- ------------- -------------
Net Cash Provided by
Financing Activities 111,815 38,494 48,484 57,423 374,152 9,093
------------- ------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in Cash
and Cash Equivalents (3,835) (1,648) (613) 1,537 4,421 669
Cash and Cash Equivalents,
Beginning of Period 8,373 8,986 8,986 7,449 3,028 2,359
------------- ------------- ------------- ------------- ------------- -------------
Cash and Cash Equivalents, End
of Period $ 4,538 $ 7,338 $ 8,373 8,986 $ 7,449 $ 3,028
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
The accompanying notes are an integral part of the financial statements.
F-7
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
1. ORGANIZATION AND FORMATION
First Industrial, L.P. (the "Partnership") was organized as a limited
partnership in the state of Delaware on November 23, 1993. The sole general
partner is First Industrial Realty Trust, Inc. (the "Company") with an
approximate 91.8% ownership interest at September 30, 1996. The Company is a
real estate investment trust (REIT) as defined in the Internal Revenue Code. The
Company is continuing the business of The Shidler Group and the Other
Contributing Business (defined below). The Company's operations are conducted
primarily through the Partnership. As of September 30, 1996, the Partnership
owned 328 in-service properties located in 14 states, containing an aggregate of
approximately 29.9 million square feet (unaudited) of gross leasable area. Of
the 328 properties owned by the Partnership 85 are held directly by the
Partnership, 195 are held by First Industrial Financing Partnership, L.P. (the
"Financing Partnership"), 19 are held by First Industrial Securities, L.P. (the
"Securities Partnership"), 23 are held by First Industrial Mortgage Partnership,
L.P. (the "Mortgage Partnership"), 2 are held by First Industrial Pennsylvania
Partnership, L.P. (the "Pennsylvania Partnership"), 3 are held by First
Industrial Harrisburg, L.P. (the "Harrisburg Partnership") and 1 is held by
First Industrial Indianapolis, L.P. (the "Indianapolis Partnership").
On June 30, 1994, the Company completed its initial public offering of
16,175,000 shares of $.01 par value common stock (the "Initial Offering") and,
in July 1994, issued an additional 1,400,000 shares pursuant to an
over-allotment option. The proceeds per share in the Initial Offering and the
over-allotment option was $23.50, resulting in gross offering proceeds of
approximately $389,512. Net of underwriters' discount and total offering
expenses, the Company received approximately $355,217 in proceeds from the
Initial Offering and the over-allotment option. On June 30, 1994, the Company
(through the Financing Partnership) borrowed $300,000 (the "1994 Mortgage Loan")
from an institutional lender. The net proceeds from the Initial Offering and the
1994 Mortgage Loan were used primarily to acquire properties, repay indebtedness
and pay certain fees and expenses. The Company and the Partnership commenced
operations on July 1, 1994 upon the effective completion of the Initial
Offering.
In February 1996, the Company completed an offering of 5,175,000 shares of
$.01 par value common stock. The net proceeds received from the Initial Offering
and the February 1996 Offering are reflected in the Partnership's consolidated
financial statements as contributions.
2. BASIS OF PRESENTATION
The Company is the sole stockholder of First Industrial Finance Corporation,
First Industrial Securities Corporation, First Industrial Mortgage Corporation,
First Industrial Pennsylvania Corporation, First Industrial Harrisburg
Corporation and First Industrial Indianapolis Corporation which are the sole 1%
general partner of the Financing Partnership, the Securities Partnership, the
Mortgage Partnership, the Pennsylvania Partnership, the Harrisburg Partnership
and Indianapolis Partnership, respectively, collectively referred to as the
"Subsidiary Partnerships". The Partnership is the sole 99% limited partner of
the Subsidiary Partnerships. The consolidated financial statements of the
Partnership at September 30, 1996, December 31, 1995 and 1994 and for the nine
month periods ended September 30, 1996 and 1995, the year ended December 31,
1995 and the six month period ended December 31, 1994 include the accounts and
operations of the Partnership and its Subsidiary Partnerships. All significant
intercompany transactions have been eliminated in consolidation.
F-8
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
2. BASIS OF PRESENTATION (CONTINUED)
The combined statements of operations, changes in partners' capital and net
deficit and cash flows for the six months ended June 30, 1994 and the year ended
December 31, 1993 reflect the operations, equity and deficit and cash flows of
the properties and business contributed by the Shidler Group and the properties
and business contributed by three other contributing businesses (the "Other
Contributing Businesses" and with the Shidler Group, the "Contributing
Businesses") at or prior to the consummation of the Initial Offering.
Purchase accounting has been applied when ownership interests in properties
were acquired for cash. The historical cost basis of properties has been carried
over when the Contributing Businesses ownership interests were exchanged for
units in the Partnership (the "Units") and purchase accounting has been used for
all other properties that were acquired for Units.
Minority interest in the Partnership at September 30, 1996 and December 31,
1995 and 1994 represents approximately 1% of the aggregate partnership interest
in the Subsidiary Partnerships held by the general partners.
In 1995, the Company issued 1.65 million shares of 9.5% Series A Cumulative
Preferred Stock (the "Series A Preferred Shares"). The payment of dividends on,
and payments on liquidation or redemption of, the Series A Preferred Shares are
guaranteed by First Industrial Securities Corporation (the "Guarantor") which is
the general partner of the Securities Partnership. The Guarantor has a preferred
limited partner interest in the Securities Partnership which entitles it to
receive a fixed quarterly distribution equal to the fixed quarterly dividend the
Company pays to its Series A preferred shareholders. It also entitles the
Guarantor to a preferred liquidation preference equal to the redemption price of
any Series A Preferred Shares. To the extent the Company shall fail to make any
payment of dividends or pay any portion of the liquidation preference on or the
redemption price of any Series A Preferred Shares, the Guarantor will be
obligated to pay an amount to each holder of Series A Preferred Shares equal to
any such shortfall. The Guarantor will be required to liquidate its preferred
limited partnership interest in the Securities Partnership to meet this
obligation.
The gross proceeds from the issuance of the Series A Preferred Shares in the
amount of $41,250 was contributed to the Securities Partnership by the Company.
Such amount is reflected in the consolidated financial statements of the
Partnership in 1995 as a minority interest contribution. Net income in the
consolidated financial statements related to the operations of Securities L.P.
has been allocated first to the Guarantor as a minority interest equal to the
fixed quarterly distribution. Net income in excess of the fixed distribution is
allocated in accordance with the respective partners' ownership interests.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In order to conform with generally accepted accounting principles, management,
in preparation of the Partnership's financial statements, is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of September
30, 1996, December 31, 1995 and 1994, and the reported amounts of revenues and
expenses for the nine month periods ended September 30, 1996 and 1995 and for
the year ended December 31, 1995, the six month period ended December 31, 1994,
the six month period ended June 30, 1994 and the year ended December 31, 1993.
Actual results could differ from those estimates.
F-9
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION:
Rental income is recognized on a straight-line method under which contractual
rent increases are recognized evenly over the lease term. Tenant recovery income
includes payments from tenants for taxes, insurance and other property operating
expenses and is recognized as revenues in the same period the related expenses
are incurred by the Partnership.
The Partnership provides an allowance for doubtful accounts against the
portion of tenant accounts receivable which is estimated to be uncollectible.
Accounts receivable in the consolidated balance sheets are shown net of an
allowance for doubtful accounts of $700, $500 and $148 as of September 30, 1996
and December 31, 1995 and 1994, respectively.
INVESTMENT IN REAL ESTATE AND DEPRECIATION:
Effective January 1, 1995, the Partnership adopted Financial Accounting
Standards Statement No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of."
Real estate assets are carried at the lower of depreciated cost or fair
value as determined by the Partnership. The Partnership reviews its properties
on a quarterly basis for impairment and provides a provision if impairments are
determined. First, to determine if impairment may exist, the Partnership reviews
its properties and identifies those which have had either an event of change or
event of circumstances warranting further assessment of recoverability. Then,
the Partnership estimates the fair value of those properties on an individual
basis by capitalizing the expected net operating income and discounting the
expected cash flows of the properties. Such amounts are then compared to the
property's depreciated cost to determine whether an impairment exists. Interest
expense, real estate taxes and other directly related expenses incurred during
construction periods are capitalized and depreciated commencing with the date
placed in service, on the same basis as the related assets. Depreciation expense
is computed using the straight-line method based on the following useful lives:
-----------
YEARS
-----------
Buildings and Improvements....................................................... 31.5 to 40
Land Improvements................................................................ 15
Furniture, Fixtures and Equipment................................................ 5 to 10
Construction expenditures for tenant improvements and leasing commissions
are capitalized and amortized over the terms of each specific lease. Maintenance
and repairs are charged to expense when incurred. Expenditures for improvements
are capitalized.
When assets are sold or retired, their costs and related accumulated
depreciation are removed from the accounts with the resulting gains or losses
reflected in net income or loss.
CASH AND CASH EQUIVALENTS:
Cash and Cash Equivalents include all cash and liquid investments with an
initial maturity of three months or less. The carrying amount approximates fair
value due to the short maturity of these investments.
F-10
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES:
In accordance with partnership taxation, each of the partners of the Partnership
are responsible for reporting their shares of taxable income or loss.
Accordingly, no provision has been made in the accompanying consolidated and
combined financial statements.
The Partnership and certain of its Subsidiary Partnerships are subject to
certain state and local income, excise and franchise taxes. The provision for
such state and local taxes has been reflected in general and administrative
expense in the consolidated statement of operations and has not been separately
stated due to its insignificance.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
The Partnership's financial instruments include short-term investments, tenant
accounts receivable, accounts payable, other accrued expenses and mortgage loans
payable. The fair values of these financial instruments were not materially
different from their carrying or contract values. The Partnership's financial
instruments also include interest rate protection agreements. See Note 4 below.
DEFERRED FINANCING COSTS:
Deferred financing costs include fees and costs incurred to obtain long-term
financing. These fees and costs are being amortized over the terms of the
respective loans. Accumulated amortization of deferred financing costs was
$5,892, $3,593 and $1,059, as of September 30, 1996 and December 31, 1995 and
1994, respectively. Unamortized deferred financing fees are written-off when
debt is retired before the maturity date.
4. MORTGAGE LOANS, ACQUISITION FACILITIES, CONSTRUCTION LOANS PAYABLE AND
PROMISSORY NOTES PAYABLE
MORTGAGE LOANS:
On June 30, 1994, the Partnership, in connection with the Initial Offering and
through the Financing Partnership, borrowed $300,000 under a mortgage loan (the
"1994 Mortgage Loan"). The 1994 Mortgage Loan is cross-collateralized by, among
other things, first mortgage liens on the 195 properties owned by the Financing
Partnership. The 1994 Mortgage Loan will mature on June 30, 1999, unless
extended by the Partnership, subject to certain conditions, for an additional
two-year period, thereby maturing on June 30, 2001. The Partnership has
guaranteed certain obligations of the Financing Partnership under the 1994
Mortgage Loan. The 1994 Mortgage Loan provides for interest only payments which
have been effectively fixed at a rate of 6.97% through June 30, 2001. Interest
payable related to the 1994 Mortgage Loan was $1,705, $1,905 and $1,912 as of
September 30, 1996, December 31, 1995 and 1994, respectively. Payments to (from)
the Partnership under the interest rate protection agreements during the nine
months ended September 30, 1996 and 1995 and the twelve months ended December
31, 1995 and the six month period ended December 31, 1994 totaled $(224), $691,
$584 and $51, respectively, which have been included as an offset to interest
expense.
F-11
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
4. MORTGAGE LOANS, ACQUISITION FACILITIES, CONSTRUCTION LOANS PAYABLE AND
PROMISSORY NOTES PAYABLE (CONTINUED)
In conjunction with obtaining the 1994 Mortgage Loan, the Partnership
purchased an interest rate protection agreement which effectively limited the
interest rate during the initial five-year term of the 1994 Mortgage Loan to
7.2% per annum. Prior to the subsequent replacement of the interest rate
protection agreement, its cost of $18,450 had been capitalized and was being
amortized over the five-year term of the agreement.
Effective July 1, 1995, the Partnership replaced such interest rate
protection agreement with new interest rate protection agreements and entered
into interest rate swap agreements, which together effectively fix the annual
interest rate on the 1994 Mortgage Loan at 6.97% for six years through June 30,
2001. As a result of the replacement of the interest rate protection agreement,
the Partnership incurred a one-time loss of $6.4 million, of which $6.3 million
represents the difference between the unamortized cost of the replaced interest
rate protection agreement and the cost of the new agreements. In the event that
the Partnership does not exercise the two-year option to extend the 1994
Mortgage Loan, the risk associated with the interest rate protection agreements
is that the Partnership would be obligated to perform its obligations under the
terms or would either pay or receive cash to terminate the agreement. In either
event, the impact of such transaction would be reflected in the Partnership's
financial statements. The costs of the new interest rate protection agreements
have been capitalized and are being amortized over the respective terms of the
agreements. Under the terms of the new interest rate protection agreements,
certain collateral may be required to be set aside for amounts that could become
due under the agreement. At September 30, 1996 and December 31, 1995, cash
collateral of $0 and $2,557, respectively, was included in restricted cash.
Accumulated amortization on the interest protection agreements was $184, $60 and
$1,845 as of September 30, 1996, December 31, 1995 and December 31, 1994,
respectively.
As of September 30, 1996, the fair market value of the new interest rate
protection agreements and the interest rate swap agreements was approximately
$11,665, which exceeded the $8,415 net book value by approximately $3,250. The
fair market value was determined by a third party evaluation and is based on
estimated discounted future cash flows.
Under the terms of the 1994 Mortgage Loan, certain cash reserves are
required to be and have been set aside for payments of tenant improvements,
capital expenditures, interest, real estate taxes, insurance and potential
environmental costs. The amount of cash reserves for payment of potential
environmental costs was determined by the lender and were established at the
closing of the 1994 Mortgage Loan. The amounts included in the cash reserves
relating to payments of tenant improvements, capital expenditures, interest,
real estate taxes and insurance were determined by the lender and approximate
the next periodic payment of such item. As of September 30, 1996 and December
31, 1995 and 1994, these reserves totaled $8,180, $8,552 and $11,026,
respectively, and are included in Restricted Cash. Such cash reserves were
invested in a money market fund at September 30, 1996. The maturity of these
investments is one day. Accordingly, cost approximates fair market value.
On December 29, 1995 the Mortgage Partnership borrowed $40,200 under a
mortgage loan (the "1995 Mortgage Loan") from an institutional lender. The 1995
Mortgage Loan matures on January 11, 2026 and provides for interest only
payments through January 11, 1998, after which monthly principal and interest
payments are required based on a 28-year amortization schedule. The interest
rate under the 1995
F-12
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
4. MORTGAGE LOANS, ACQUISITION FACILITIES, CONSTRUCTION LOANS PAYABLE AND
PROMISSORY NOTES PAYABLE (CONTINUED)
Mortgage Loan is fixed at 7.22% per annum through January 11, 2003. After
January 11, 2003, the interest rate adjusts through a predetermined formula
based on the applicable Treasury rate. Interest payable related to the 1995
Mortgage Loan was $168 and $24 at September 30, 1996 and December 31, 1995,
respectively. The 1995 Mortgage Loan is collateralized by 23 properties held by
the Mortgage Partnership.
Under the terms of the 1995 Mortgage Loan, certain cash reserves are
required to be and have been set aside for payments of tenant improvements,
capital expenditures, interest, real estate taxes and insurance. The amounts
included in the cash reserves relating to tenant improvements, capital
expenditures, payments of interest, real estate taxes and insurance were
determined by the lender and approximate the next periodic payment of such
items. As of September 30, 1996 and December 31, 1995, these reserves totaled
$1,387 and $388 and are included in Restricted Cash. Such cash reserves were
invested in a money market fund at September 30, 1996. The maturity of these
investments is one day. Accordingly, cost approximates fair market value.
On December 14, 1995, the Partnership, through the Harrisburg Partnership,
entered into a $6,650 mortgage loan (the "Harrisburg Mortgage Loan") that is
collateralized by three properties in Harrisburg, Pennsylvania. The Harrisburg
Mortgage Loan bears interest at a rate based on LIBOR plus 1.5% or prime plus
2.25%, at the Partnership's option, and provides for interest only payments
through May 31, 1996, with monthly principal and interest payments required
subsequently based on a 26.5-year amortization schedule. At September 30, 1996,
the interest rate was 7.0%. The Harrisburg Mortgage Loan will mature on December
15, 2000.
On March 20, 1996, the Partnership and the Indianapolis Partnership, entered
into a $36,750 mortgage loan (the "CIGNA Loan") that is collateralized by seven
properties in Indianapolis, Indiana and three properties in Cincinnati, Ohio.
The CIGNA Loan bears interest at a fixed interest rate of 7.5% and provides for
monthly principal and interest payments based on a 25-year amortization
schedule. The CIGNA Loan will mature on April 1, 2003. Interest payable related
to the CIGNA Loan was $0 at September 30, 1996.
On March 20, 1996, the Partnership assumed a $6,424 mortgage loan and a
$2,993 mortgage loan (together, the "Assumed Loans") that are collateralized by
13 properties in Indianapolis, Indiana and one property in Indianapolis,
Indiana, respectively. The Assumed Loans bear interest at a fixed rate of 9.25%
and provide for monthly principal and interest payments based on a 16.75-year
amortization schedule. The Assumed Loans will mature on January 1, 2013.
Interest payable related to the Assumed Loans was $0 at September 30, 1996.
ACQUISITION FACILITIES:
On June 30, 1994, the Partnership entered into a three-year, $100,000
collateralized revolving credit facility (the "1994 Acquisition Facility") .
During the quarter ended June 30, 1995, the capacity of the 1994 Acquisition
Facility was increased to $150,000. The Partnership may borrow under the
facility to finance the acquisition of additional properties and for other
partnership purposes, including to obtain additional working capital. The
general partner of the Partnership has guaranteed repayment of the 1994
Acquisition Facility. The 1994 Acquisition Facility will mature on June 29, 1997
(see Note 10). As of September 30,
F-13
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
4. MORTGAGE LOANS, ACQUISITION FACILITIES, CONSTRUCTION LOANS PAYABLE AND
PROMISSORY NOTES PAYABLE (CONTINUED)
1996 and December 31, 1995 and 1994, borrowings under the 1994 Acquisition
totaled $62,310, $36,941 and $48,700, respectively. Borrowings under the 1994
Acquisition Facility bore interest at a floating rate equal to LIBOR plus 2.0%
or a "Corporate Base Rate" plus .5%, at the Partnership's election. Effective
July 12, 1996, the lenders reduced the interest rate to LIBOR plus 1.75%. Under
the 1994 Acquisition Facility, LIBOR contracts are entered into by the
Partnership as draws are made. At September 30, 1996, the weighted average
interest rate was approximately 7.5%. Interest payable related to the 1994
Acquisition Facility was $227, $488 and $130 as of September 30, 1996, and
December 31, 1995 and 1994, respectively. The borrowings under the 1994
Acquisition Facility are cross-collateralized by 26 properties held by the
Partnership. The 1994 Acquisition Facility contains certain financial covenants
relating to debt service coverage, market value net worth, distribution payout
ratio, and total funded indebtedness.
In addition, in December 1995, the Partnership entered into a $24,219
collateralized revolving credit facility (the "1995 Acquisition Facility") with
a commercial bank. The 1995 Acquisition Facility was paid off in full and
retired in February 1996 with a portion of the proceeds from a capital
contribution from the general partner of the Partnership. The 1995 Acquisition
Facility was collateralized by six properties held by the Partnership and bore
interest at a floating rate of LIBOR plus 2.45%. As of December 31, 1995,
borrowings under the 1995 Acquisition Facility were $11,294 and bore interest at
a rate of 8.3%. Interest payable related to the 1995 Acquisition Facility was
$27 at December 31, 1995.
In May 1996, the Partnership entered into a $10,000 collateralized revolving
credit facility (the "1996 Credit Line") with a commercial bank. The 1996 Credit
Line is collateralized by three properties held by the Partnership. The general
partner of the Partnership has guaranteed repayment of the 1996 Credit Line.
Borrowings under the 1996 Credit Line bear interest at a floating rate from
LIBOR plus 2.45% to LIBOR plus 2.75%, depending on the term of the interest rate
option. The 1996 Credit Line will mature on December 14, 1998. As of September
30, 1996 there were no borrowings under the 1996 Credit Line.
In September 1996, the Partnership entered into a $40,000 revolving credit
facility ("1996 Acquisition Facility"). The Partnership may borrow under the
facility to finance the acquisition of additional properties and for other
corporate purposes, including to obtain additional working capital. The general
partner of the Partnership has guaranteed the repayment of the 1996 Acquisition
Facility. The 1996 Acquisition Facility will mature on March 31, 1997. At
September 30, 1996 there were no borrowings under the 1996 Acquisition Facility.
Borrowings under the 1996 Acquisition Facility bear interest at a floating rate
of LIBOR plus 2.0% or a "Corporate Base Rate" plus .5%, at the Partnership's
election. Interest payable related to the 1996 Acquisition Facility was $0 at
September 30, 1996. The borrowings under the 1996 Acquisition Facility are
cross-collateralized by 17 properties held directly by the Partnership. The 1996
Acquisition Facility contains certain financial covenants relating to debt
service coverage, market value net worth, distribution payout ratio and total
funded indebtedness.
CONSTRUCTION LOANS:
In 1995, the Partnership entered into two construction loans with commercial
banks providing total funding commitments of $5,860. At December 31, 1995, the
Partnership had borrowed $4,873 under such construction loans which are
collateralized by two properties held directly by the Partnership. Such
borrowings bore interest at LIBOR plus 2.0% and provide for interest only
payments. The construction
F-14
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
4. MORTGAGE LOANS, ACQUISITION FACILITIES, CONSTRUCTION LOANS PAYABLE AND
PROMISSORY NOTES PAYABLE (CONTINUED)
loans have maturity dates of November 2 and December 21, 1996. Both construction
loans were paid off in full and retired in February 1996 with a portion of the
proceeds from a capital contribution from the general partner of the
Partnership.
PROMISSORY NOTES PAYABLE:
On September 30, 1996, the Partnership entered into a $6,489 promissory note and
a $3,430 promissory note (collectively referred to as "Promissory Notes") as
partial consideration for the purchase of two properties in Columbus, Ohio. The
$6,489 promissory note is collateralized by a letter of credit pledge by the
Partnership in the amount of $2,715. The $3,430 promissory note is
collaterialized by a letter of credit pledge by the Partnership in the amount of
$967. Both promissory notes bear interest at 8% and mature on January 6, 1997.
The Promissory Notes were paid off on January 6, 1997. Interest payable related
to both promissory notes was $0 at September 30, 1996.
The following is a schedule of maturities of the mortgage loans, acquisition
facilities and promissory notes as of September 30, 1996 for the next five years
ending December 31, and thereafter:
----------
AMOUNT
----------
1996 $ 191
1997 73,289
1998 1,563
1999 301,710
2000 7,328
Thereafter 80,486
----------
Total $ 464,567
----------
----------
The $300,000 1994 Mortgage Loan maturing in 1999 may be extended at the
Partnership's option, subject to certain conditions, for an additional two
years, thereby maturing on June 30, 2001.
5. RELATED PARTY TRANSACTIONS
The Partnership leases office space in Chicago, Illinois from an affiliate of
The Shidler Group at an aggregate annual cost of approximately $131.
On December 5, 1994, the Partnership purchased for approximately $.9
million, five acres of land from a partnership in which an officer and director
of the general partner of the Partnership owns approximately a 2.5% general
partner interest.
F-15
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
6. FUTURE RENTAL REVENUES
The Partnership's properties are leased to tenants under net and semi-net
operating leases. Minimum lease payments receivable, excluding tenant
reimbursements of expenses, under noncancelable operating leases in effect as of
December 31, 1995 are approximately as follows:
1996 $ 83,070
1997 70,786
1998 58,090
1999 45,578
2000 34,426
Thereafter 84,069
---------
Total $ 376,019
---------
---------
7. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS
Supplemental disclosure of cash flow information:
------------------------------------------------------------------------------------
NINE MONTHS NINE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1995 1994 1994 1993
------------------------------------------------------------------------------------
Interest paid, net of capitalized
interest $ 21,812 $ 20,540 $ 28,248 $ 8,598 $ 13,697 $ 15,829
------------- ------------- ------------ ------ ----------- ------------
------------- ------------- ------------ ------ ----------- ------------
Interest capitalized $ 251 $ 294 $ 324 $ 50 $ -- $ 13
------------- ------------- ------------ ------ ----------- ------------
------------- ------------- ------------ ------ ----------- ------------
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING
ACTIVITIES:
Distribution payable on Units $ 12,802 $ 9,648 $ 9,954 $ 9,648 $ -- $ --
------------- ------------- ------------ ------ ----------- ------------
------------- ------------- ------------ ------ ----------- ------------
Sale of interest rate protection
agreement $ -- $ (12,852) $ (12,852) $ -- $ -- $ --
Purchase of interest rate
protection and swap agreements -- 12,852 12,852 -- -- --
------------- ------------- ------------ ------ ----------- ------------
$ -- $ 0 $ 0 $ -- $ -- $ --
------------- ------------- ------------ ------ ----------- ------------
------------- ------------- ------------ ------ ----------- ------------
F-16
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
7. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS (CONTINUED)
------------------------------------------------------------------------------------
NINE MONTHS NINE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1995 1994 1994 1993
------------------------------------------------------------------------------------
IN CONJUNCTION WITH THE
PROPERTY ACQUISITIONS, THE
FOLLOWING ASSETS AND
LIABILITIES WERE ASSUMED
AND UNITS EXCHANGED:
Purchase of real estate $ 178,817 $ 46,996 $ 63,855 $ 66,230 $ 372,642 $ 10,886
Accounts receivable -- -- 153 80 2,453 21
Accounts payable and accrued
expenses (1,375) (736) (1,115) (991) (4,642) (73)
Acquisitions of interests in
properties -- -- -- -- (4,281) --
Mortgage Loans (9,417) -- -- -- -- --
Promissory Notes (9,919) -- -- -- -- --
Units (15,398) -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Acquisition of Real Estate $ 142,708 $ 46,260 $ 62,893 $ 65,319 $ 366,172 $ 10,834
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
8. EXTRAORDINARY ITEM
Upon consummation of the Initial Offering, certain Contributing Business loans
were paid off and the related unamortized deferred financing fees totaling
$1,449 were written off. The write-off is shown as an extraordinary loss in the
combined statements of operations for the six months ended June 30, 1994.
A portion of the proceeds from a capital contribution from the general
partner in February 1996 was used to pay off in full and retire the 1995
Acquisition Facility and the Construction Loans. The resulting write-off of
unamortized deferred financing costs and prepayment fee incurred to retire the
1995 Acquisition Facility and Construction Loans are shown as an extraordinary
loss in the consolidated statement of operations for the nine months ended
September 30, 1996.
9. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Partnership is involved in legal actions
arising from the ownership of its properties. In management's opinion, the
liabilities, if any, that may ultimately result from such legal actions are not
expected to have a materially adverse effect on the consolidated financial
position, operations or liquidity of the Partnership.
Seventeen properties have leases granting the tenants options to purchase
the property. Such options are exercisable at various times and at appraised
fair market value or at a fixed purchase price generally in excess of the
Partnership's purchase price.
The Partnership has committed to the construction of two light industrial
and four bulk warehouse properties totaling approximately 1,045,769 square feet.
The estimated total construction costs are
F-17
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
9. COMMITMENTS AND CONTINGENCIES (CONTINUED)
approximately $31.6 million. The Partnership is not acting as the general
contractor for these construction projects.
10. SUBSEQUENT EVENTS (UNAUDITED)
On October 4, 1996, the Partnership purchased a 187,777 square foot light
industrial property located in Eden Prairie, Minnesota for approximately $7.5
million.
On October 8, 1996, the Partnership purchased a 102,500 square foot light
industrial property located in Cleveland, Ohio for approximately $3.7 million.
On October 25, 1996, the Company issued 5,750,000 shares of $.01 par value
common stock at $25.50 per share, resulting in net proceeds of approximately
$137.6 million. The Company contributed the net proceeds to the Partnership for
5,750,000 Units. Of the proceeds, $84.2 million was used to repay in full the
1994 and 1996 Acquisition Facilities.
On October 28, 1996, the Partnership purchased three bulk warehouse
properties located in Portland, Tennessee for approximately $12.8 million.
On October 28, 1996, the Partnership purchased a light industrial property
located in Wauwatosa, Wisconsin for approximately $2.0 million.
On October 30, 1996, the Partnership purchased five light industrial
properties located in Indianapolis, Indiana for approximately $7.9 million.
On November 14, 1996, the Partnership purchased 23 bulk warehouse properties
totaling 654,095 square feet located in Romulus, Michigan for approximately
$19.7 million which was funded with $11.2 million in cash and 325,068 Units
valued at $8.5 million in the aggregate.
On December 2, 1996, the Partnership purchased two light industrial
properties totaling 150,536 square feet in Atlanta, Georgia for approximately
$3.5 million.
On December 13, 1996, the Partnership purchased for approximately $.5
million approximately 7.8 acres of land in suburban Cincinnati, Ohio where a
112,500 square foot light industrial warehouse is currently under construction.
On December 16, 1996, the Partnership simultaneously terminated its 1994
Acquisition Facility and obtained a new $200 million unsecured revolving credit
facility bearing interest initially at LIBOR plus 1.10%.
On December 18, 1996, the Partnership purchased two light industrial
properties totaling 125,000 square feet in St. Louis, Missouri for approximately
$2.7 million.
On December 24, 1996, the Partnership purchased five light industrial
properties totaling 111,375 square feet in Cincinnati, Ohio for approximately
$3.1 million.
On December 24, 1996, the Partnership purchased two light industrial
properties totaling 72,239 square feet in Eden Prairie, Minnesota for
approximately $2.6 million.
F-18
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
10. SUBSEQUENT EVENTS (UNAUDITED) (CONTINUED)
On December 31, 1996, the Partnership purchased a 48,000 square foot bulk
warehouse property located in Atlanta, Georgia for approximately $1.0 million.
On December 31, 1996, the Partnership purchased two bulk warehouse
properties totaling 409,119 square feet located in Atlanta, Georgia for
approximately $6.6 million.
On December 31, 1996, the Partnership purchased a 80,000 square foot light
industrial property located in Minneapolis, Minnesota for approximately $2.4
million.
On December 31, 1996, the Partnership sold a light industrial warehouse
totaling 151,575 square feet located in Atlanta, Georgia for approximately $2.8
million.
On January 9, 1997, the Partnership purchased a 482,400 square foot bulk
warehouse property located in Indianapolis, Indiana for approximately $7.1
million.
On January 31, 1997, the Partnership purchased 39 properties comprising 2.7
million square feet located in Long Island, New York and Northern New Jersey for
approximately $138.8 million which was funded with $86.4 million in cash,
assumption of $4.5 million in debt and the issuance of 1,595,282 Units valued at
$47.9 million.
11. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
Due to the acquisition of 82 properties between January 1, 1995 and September
30, 1996 and the capital contribution from the general partner in February 1996,
the historical results of operations are not indicative of future results of
operations. The following Pro Forma Condensed Statements of Operations for the
nine months ended September 30, 1996 and 1995 are presented as if such property
acquisitions and the general partners' contribution in February 1996 had
occurred at January 1, 1995, and therefore include pro forma information. The
pro forma information is based upon historical information and does not purport
to present what actual results would have been had such transactions, in fact,
occurred at January 1, 1995, or to project results for any future period.
F-19
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(AMOUNTS RELATED TO NINE MONTH PERIODS ENDED SEPTEMBER 30TH ARE UNAUDITED)
11. PRO FORMA FINANCIAL INFORMATION (UNAUDITED) (CONTINUED)
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
----------------------------
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
----------------------------
Total Revenue 108,908 99,378
Property Expenses (30,960) (27,359)
General and Administrative Expenses (2,321) (2,428)
Interest Expense (24,422) (25,453)
Depreciation and Amortization (23,807) (23,154)
Disposition of Interest Rate Protection Agreement -- (6,410)
------------- -------------
Income Before Gain of Sales of Properties, Minority Interest and Extraordinary
Loss 27,398 14,574
Gain on Sales of Properties 4,320 --
------------- -------------
Income Before Minority Interest and Extraordinary Loss 31,718 14,574
Income Allocated to Minority Interest (3,178) (65)
------------- -------------
Income Before Extraordinary Loss 28,540 14,509
Extraordinary Loss (821) --
------------- -------------
Net Income 27,719 14,509
------------- -------------
------------- -------------
F-20
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
ATLANTA
4250 River Green Parkway Duluth, GA (b) $ 264 $ 1,522 $ 17 $ 264
3400 Corporate Parkway Duluth, GA (b) 281 1,621 16 281
3450 Corporate Parkway Duluth, GA (b) 506 2,904 18 506
3500 Corporate Parkway Duluth, GA (b) 260 1,500 16 262
3425 Corporate Parkway Duluth, GA (b) 385 2,212 17 387
1650 GA Highway 155 Atlanta, GA (a) 788 4,544 12 792
415 Industrial Park Road Atlanta, GA (a) 544 3,140 9 544
434 Industrial Park Road Atlanta, GA (a) 234 1,365 2 234
435 Industrial Park Road Atlanta, GA (a) 281 1,638 9 281
14101 Industrial Park Boulevard Atlanta, GA (a) 285 1,658 13 285
801-804 Blacklawn Road Atlanta, GA (a) 361 2,095 10 361
1665 Dogwood Drive Atlanta, GA (a) 635 3,662 10 635
1715 Dogwood Drive Atlanta, GA (a) 288 1,675 93 288
11235 Harland Drive Atlanta, GA (a) 125 739 12 125
700 Westlake Parkway Atlanta, GA (c) 213 1,551 509 223
800 Westlake Parkway Atlanta, GA (c) 450 2,645 349 479
900 Westlake Parkway Atlanta, GA (c) 266 0 0 266
4050 Southmeadow Parkway Atlanta, GA (c) 401 2,813 157 425
4051 Southmeadow Parkway Atlanta, GA (c) 697 3,486 685 726
4071 Southmeadow Parkway Atlanta, GA (c) 750 4,460 714 828
4081 Southmeadow Parkway Atlanta, GA (c) 1,012 5,450 611 1,157
1875 Rockdale Industrial Blvd. Atlanta, GA (c) 386 2,264 6 386
605 Stonehill Drive Atlanta, GA (c) 470 2,686 73 471
1605 Indian Brook Way Gwinnett, GA (e) 1,008 3,800 0 1,008
CENTRAL PENNSYLVANIA
1214-B Freedom Road Cranberry Township, PA (a) 31 994 702 205
401 Russell Drive Middletown, PA (a) 262 857 1,496 287
2700 Commerce Drive Harrisburg, PA (a) 196 977 691 206
2701 Commerce Drive Harrisburg, PA (a) 141 859 1,171 164
2780 Commerce Drive Harrisburg, PA (a) 113 743 1,033 209
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
ATLANTA
4250 River Green Parkway $ 1,539 $ 1,803 $ 48 1988 (l)
3400 Corporate Parkway 1,637 1,918 51 1987 (l)
3450 Corporate Parkway 2,922 3,428 91 1988 (l)
3500 Corporate Parkway 1,514 1,776 47 1991 (l)
3425 Corporate Parkway 2,227 2,614 70 1990 (l)
1650 GA Highway 155 4,552 5,344 171 1991 (l)
415 Industrial Park Road 3,149 3,693 118 1986 (l)
434 Industrial Park Road 1,367 1,601 51 1988 (l)
435 Industrial Park Road 1,647 1,928 64 1986 (l)
14101 Industrial Park Boulevard 1,671 1,956 63 1984 (l)
801-804 Blacklawn Road 2,105 2,466 84 1982 (l)
1665 Dogwood Drive 3,672 4,307 138 1973 (l)
1715 Dogwood Drive 1,768 2,056 81 1973 (l)
11235 Harland Drive 751 876 28 1988 (l)
700 Westlake Parkway 2,050 2,273 103 1990 (l)
800 Westlake Parkway 2,965 3,444 130 1991 (l)
900 Westlake Parkway 0 266 0 (l)
4050 Southmeadow Parkway 2,946 3,371 129 1991 (l)
4051 Southmeadow Parkway 4,142 4,868 186 1989 (l)
4071 Southmeadow Parkway 5,096 5,924 224 1991 (l)
4081 Southmeadow Parkway 5,916 7,073 260 1989 (l)
1875 Rockdale Industrial Blvd. 2,270 2,656 85 1966 (l)
605 Stonehill Drive 2,758 3,229 57 1970 (l)
1605 Indian Brook Way 3,800 4,808 22 1995 (l)
CENTRAL PENNSYLVANIA
1214-B Freedom Road 1,522 1,727 353 1982 (l)
401 Russell Drive 2,328 2,615 356 1990 (l)
2700 Commerce Drive 1,658 1,864 253 1990 (l)
2701 Commerce Drive 2,007 2,171 220 1989 (l)
2780 Commerce Drive 1,680 1,889 257 1989 (l)
F-21
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
5035 Ritter Road Harrisburg, PA (a) 360 1,442 2,352 442
5070 Ritter Road Harrisburg, PA (a) 395 2,322 1,870 506
6340 Flank Drive Harrisburg, PA (a) 361 2,363 2,348 563
6345 Flank Drive Harrisburg, PA (a) 293 2,297 2,740 587
6360 Flank Drive Harrisburg, PA (a) 218 2,286 756 359
6380 Flank Drive Harrisburg, PA (a) 109 1,317 729 234
6400 Flank Drive Harrisburg, PA (a) 153 1,312 1,073 281
6405 Flank Drive Harrisburg, PA (a) 221 1,462 1,147 313
100 Schantz Spring Road Allentown, PA (a) 532 3,144 5 533
794 Roble Road Allentown, PA (a) 915 5,391 10 915
7355 Williams Avenue Allentown, PA (a) 291 1,725 91 292
2600 Beltline Avenue Reading, PA (a) 341 2,038 41 341
7125 Grayson Road Harrisburg, PA (a) 1,514 8,779 6 1,514
7253 Grayson Road Harrisburg, PA (a) 894 5,168 10 894
5 Keystone Drive Lebanon,PA (c) 678 0 4,680 678
5020 Louise Drive Mechanicsburg, PA 707 0 2,324 716
7195 Grayson Harrisburg, PA 478 2,771 71 479
400 First Street Middletown, PA (f) 280 1,839 65 280
401 First Street Middletown, PA (f) 819 5,381 106 819
500 Industrial Lane Middletown, PA (f) 194 1,272 60 194
CHICAGO
1330 West 43rd Street Chicago, IL (a) 369 1,464 299 381
2300 Hammond Drive Schaumburg, IL (a) 442 1,241 286 444
6500 North Lincoln Avenue Lincolnwood, IL (a) 613 1,336 737 615
3600 West Pratt Avenue Lincolnwood, IL (a) 1,050 5,767 338 1,050
917 North Shore Drive Lake Bluff, IL (a) 556 3,212 28 559
6750 South Sayre Avenue Bedford Park, IL (a) 224 1,309 3 224
7200 S Leamington Bedford Park, IL (d) 798 4,595 119 814
585 Slawin Court Mount Prospect, IL (a) 611 3,505 1 611
2300 Windsor Court Addison, IL (a) 688 3,943 115 688
3505 Thayer Court Aurora, IL (a) 430 2,472 1 430
3600 Thayer Court Aurora, IL (a) 636 3,645 5 636
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
5035 Ritter Road 3,712 4,154 566 1988 (l)
5070 Ritter Road 4,081 4,587 626 1989 (l)
6340 Flank Drive 4,509 5,072 700 1988 (l)
6345 Flank Drive 4,743 5,330 723 1989 (l)
6360 Flank Drive 2,901 3,260 453 1988 (l)
6380 Flank Drive 1,921 2,155 284 1991 (l)
6400 Flank Drive 2,257 2,538 337 1992 (l)
6405 Flank Drive 2,517 2,830 376 1991 (l)
100 Schantz Spring Road 3,148 3,681 118 1993 (l)
794 Roble Road 5,401 6,316 202 1984 (l)
7355 Williams Avenue 1,815 2,107 83 1989 (l)
2600 Beltline Avenue 2,079 2,420 79 1985 (l)
7125 Grayson Road 8,785 10,299 374 1991 (l)
7253 Grayson Road 5,178 6,072 221 1990 (l)
5 Keystone Drive 4,680 5,358 56 1995 (l)
5020 Louise Drive 2,315 3,031 58 1995 (l)
7195 Grayson 2,841 3,320 76 1994 (l)
400 First Street 1,904 2,184 16 1963-1965 (l)
401 First Street 5,487 6,306 45 1963-1965 (l)
500 Industrial Lane 1,332 1,526 11 1963-1965 (l)
CHICAGO
1330 West 43rd Street 1,751 2,132 926 1977 (l)
2300 Hammond Drive 1,525 1,969 800 1970 (l)
6500 North Lincoln Avenue 2,071 2,686 928 1965/88 (l)
3600 West Pratt Avenue 6,105 7,155 218 1953/88 (l)
917 North Shore Drive 3,237 3,796 127 1974 (l)
6750 South Sayre Avenue 1,312 1,536 49 1975 (l)
7200 S Leamington 4,698 5,512 10 1950 (l)
585 Slawin Court 3,506 4,117 131 1992 (l)
2300 Windsor Court 4,058 4,746 167 1986 (l)
3505 Thayer Court 2,473 2,903 93 1989 (l)
3600 Thayer Court 3,650 4,286 138 1989 (l)
F-22
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
736-776 Industrial Drive Elmhurst, IL (a) 349 1,994 53 380
5310-5352 East Avenue Countryside, IL (a) 382 2,036 232 382
12330-12358 South Latrobe Alsip, IL (a) 381 2,067 51 381
305-311 Era Drive Northbrook, IL (c) 200 1,154 46 200
700-714 Landwehr Road Northbrook, IL (c) 357 2,052 41 357
720-730 Landwehr Road Northbrook, IL (b) 521 2,985 8 521
3170-3190 MacArthur Boulevard Northbrook, IL (b) 370 2,126 10 370
4330 South Racine Avenue Chicago, IL (d) 448 1,893 239 468
13040 S. Crawford Ave. Alsip, IL (c) 1,073 6,193 20 1,073
20W201 101st Street Lemont, IL (b) 967 5,554 242 967
12241 Melrose Street Franklin Park, IL (c) 332 1,931 70 332
280-296 Palatine Road Wheeling, IL (b) 305 1,735 128 309
3150-3160 MacArthur Boulevard Northbrook, IL 439 2,518 7 439
2101-2125 Gardner Road Broadview, IL 1,177 6,818 91 1,228
365 North Avenue Carol Stream, IL 1,208 6,961 71 1,208
2942 MacArthur Boulevard Northbrook, IL 315 1,803 7 315
12301-12325 S Laramie Ave Alsip, IL (d) 650 3,692 113 656
DES MOINES
1500 East Washington Avenue Des Moines, IA (a) 610 4,251 580 623
1600 East Washington Avenue Des Moines, IA (a) 209 1,557 155 221
4121 McDonald Avenue Des Moines, IA (a) 390 2,931 295 416
4141 McDonald Avenue Des Moines, IA (a) 706 5,518 587 787
4161 McDonald Avenue Des Moines, IA (a) 389 3,046 617 467
DETROIT
2654 Elliott Troy, MI (b) 57 334 4 57
1731 Thorncroft Troy, MI (b) 331 1,904 17 331
1653 E. Maple Troy, MI (b) 192 1,104 15 192
47461 Clipper Plymouth, MI (b) 122 723 7 122
47522 Galleon Plymouth, MI (b) 85 496 9 85
4150 Varsity Drive Ann Arbor, MI (b) 168 969 7 168
1330 Crooks Road Clawson, MI (b) 234 1,348 12 234
12000 Merriman Road Livonia, MI (a) 453 3,651 807 445
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
736-776 Industrial Drive 2,016 2,396 75 1975 (l)
5310-5352 East Avenue 2,268 2,650 80 1975 (l)
12330-12358 South Latrobe 2,118 2,499 81 1975 (l)
305-311 Era Drive 1,200 1,400 46 1978 (l)
700-714 Landwehr Road 2,093 2,450 79 1978 (l)
720-730 Landwehr Road 2,993 3,514 112 1978 (l)
3170-3190 MacArthur Boulevard 2,136 2,506 80 1978 (l)
4330 South Racine Avenue 2,112 2,580 1,126 1978 (l)
13040 S. Crawford Ave. 6,213 7,286 206 1976 (l)
20W201 101st Street 5,796 6,763 184 1988 (l)
12241 Melrose Street 2,001 2,333 41 1969 (l)
280-296 Palatine Road 1,859 2,168 35 1978 (l)
3150-3160 MacArthur Boulevard 2,525 2,964 94 1978 (l)
2101-2125 Gardner Road 6,858 8,086 227 1950/69 (l)
365 North Avenue 7,032 8,240 219 1969 (l)
2942 MacArthur Boulevard 1,810 2,125 68 1979 (l)
12301-12325 S Laramie Ave 3,799 4,455 8 1975 (l)
DES MOINES
1500 East Washington Avenue 4,818 5,441 213 1987 (l)
1600 East Washington Avenue 1,700 1,921 75 1987 (l)
4121 McDonald Avenue 3,200 3,616 141 1977 (l)
4141 McDonald Avenue 6,024 6,811 265 1976 (l)
4161 McDonald Avenue 3,585 4,052 158 1979 (l)
DETROIT
2654 Elliott 338 395 11 1986 (l)
1731 Thorncroft 1,921 2,252 64 1969 (l)
1653 E. Maple 1,119 1,311 37 1990 (l)
47461 Clipper 730 852 24 1992 (l)
47522 Galleon 505 590 17 1990 (l)
4150 Varsity Drive 976 1,144 32 1986 (l)
1330 Crooks Road 1,360 1,594 45 1960 (l)
12000 Merriman Road 4,466 4,911 1,570 1975 (l)
F-23
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
238 Executive Drive Troy, MI (a) 52 173 420 100
256 Executive Drive Troy, MI (a) 44 146 359 85
301 Executive Drive Troy, MI (a) 71 293 487 133
449 Executive Drive Troy, MI (a) 125 425 829 218
501 Executive Drive Troy, MI (a) 71 236 520 129
645 Executive Drive Troy, MI (a) 184 940 358 234
451 Robbins Drive Troy, MI (a) 96 448 674 192
700 Stephenson Highway Troy, MI (a) 250 854 1,352 386
800 Stephenson Highway Troy, MI (a) 558 2,341 1,249 654
1150 Stephenson Highway Troy, MI (a) 178 966 201 200
1200 Stephenson Highway Troy, MI (a) 246 1,115 442 284
1035 Crooks Road Troy, MI (a) 114 414 382 145
1095 Crooks Road Troy, MI (a) 331 1,017 947 360
1151 Crooks Road Troy, MI (a) 764 4,115 811 896
1416 Meijer Drive Troy, MI (a) 94 394 343 125
1624 Meijer Drive Troy, MI (a) 236 1,406 798 373
1972 Meijer Drive Troy, MI (a) 315 1,301 726 372
2112 Meijer Drive Troy, MI (a) 141 714 593 229
1621 Northwood Drive Troy, MI (a) 85 351 935 215
1707 Northwood Drive Troy, MI (a) 95 262 1,155 239
1749 Northwood Drive Troy, MI (a) 107 477 454 164
1788 Northwood Drive Troy, MI (a) 50 196 461 103
1821 Northwood Drive Troy, MI (a) 132 523 745 220
1826 Northwood Drive Troy, MI (a) 55 208 395 103
1864 Northwood Drive Troy, MI (a) 57 190 441 107
1902 Northwood Drive Troy, MI (a) 234 807 2,163 511
1921 Northwood Drive Troy, MI (a) 135 589 1,164 291
2230 Elliott Avenue Troy, MI (a) 46 174 400 95
2237 Elliott Avenue Troy, MI (a) 48 159 408 90
2277 Elliott Avenue Troy, MI (a) 48 188 434 104
2291 Elliott Avenue Troy, MI (a) 52 209 324 88
2451 Elliott Avenue Troy, MI (a) 78 319 670 164
2730 Research Drive Rochester Hills, MI (a) 915 4,215 545 903
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
238 Executive Drive 545 645 156 1973 (l)
256 Executive Drive 464 549 128 1974 (l)
301 Executive Drive 718 851 205 1974 (l)
449 Executive Drive 1,161 1,379 334 1975 (l)
501 Executive Drive 698 827 172 1984 (l)
645 Executive Drive 1,248 1,482 386 1972 (l)
451 Robbins Drive 1,026 1,218 293 1975 (l)
700 Stephenson Highway 2,070 2,456 572 1978 (l)
800 Stephenson Highway 3,494 4,148 961 1979 (l)
1150 Stephenson Highway 1,145 1,345 283 1982 (l)
1200 Stephenson Highway 1,519 1,803 405 1980 (l)
1035 Crooks Road 765 910 204 1980 (l)
1095 Crooks Road 1,935 2,295 504 1986 (l)
1151 Crooks Road 4,794 5,690 1,266 1985 (l)
1416 Meijer Drive 706 831 174 1980 (l)
1624 Meijer Drive 2,067 2,440 536 1984 (l)
1972 Meijer Drive 1,970 2,342 510 1985 (l)
2112 Meijer Drive 1,219 1,448 334 1980 (l)
1621 Northwood Drive 1,156 1,371 329 1977 (l)
1707 Northwood Drive 1,273 1,512 336 1983 (l)
1749 Northwood Drive 874 1,038 248 1977 (l)
1788 Northwood Drive 604 707 155 1977 (l)
1821 Northwood Drive 1,180 1,400 337 1977 (l)
1826 Northwood Drive 555 658 152 1977 (l)
1864 Northwood Drive 581 688 159 1977 (l)
1902 Northwood Drive 2,693 3,204 794 1977 (l)
1921 Northwood Drive 1,597 1,888 462 1977 (l)
2230 Elliott Avenue 525 620 151 1974 (l)
2237 Elliott Avenue 525 615 137 1974 (l)
2277 Elliott Avenue 566 670 154 1975 (l)
2291 Elliott Avenue 497 585 135 1974 (l)
2451 Elliott Avenue 903 1,067 254 1974 (l)
2730 Research Drive 4,772 5,675 1,246 1988 (l)
F-24
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
2791 Research Drive Rochester Hills, MI (a) 557 2,731 288 560
2871 Research Drive Rochester Hills, MI (a) 324 1,487 257 327
2911 Research Drive Rochester Hills, MI (a) 505 2,136 375 504
3011 Research Drive Rochester Hills, MI (a) 457 2,104 321 457
2870 Technology Drive Rochester Hills, MI (a) 275 1,262 231 279
2890 Technology Drive Rochester Hills, MI (a) 199 902 206 206
2900 Technology Drive Rochester Hills, MI (a) 214 977 643 219
2920 Technology Drive Rochester Hills, MI (a) 149 671 155 153
2930 Technology Drive Rochester Hills, MI (a) 131 594 382 138
2950 Technology Drive Rochester Hills, MI (a) 178 819 178 185
2960 Technology Drive Rochester Hills, MI (a) 281 1,277 231 283
23014 Commerce Drive Farmington Hills, MI (a) 39 203 124 56
23028 Commerce Drive Farmington Hills, MI (a) 98 507 207 125
23035 Commerce Drive Farmington Hills, MI (a) 71 355 172 93
23042 Commerce Drive Farmington Hills, MI (a) 67 277 235 89
23065 Commerce Drive Farmington Hills, MI (a) 71 408 119 93
23070 Commerce Drive Farmington Hills, MI (a) 112 442 616 125
23079 Commerce Drive Farmington Hills, MI (a) 68 301 153 79
23093 Commerce Drive Farmington Hills, MI (a) 211 1,024 626 295
23135 Commerce Drive Farmington Hills, MI (a) 146 701 225 158
23149 Commerce Drive Farmington Hills, MI (a) 266 1,005 457 274
23163 Commerce Drive Farmington Hills, MI (a) 111 513 238 138
23164 Commerce Drive Farmington Hills, MI (a) 100 405 201 110
23177 Commerce Drive Farmington Hills, MI (a) 175 1,007 510 254
23192 Commerce Drive Farmington Hills, MI (a) 41 205 134 58
23206 Commerce Drive Farmington Hills, MI (a) 125 531 221 137
23290 Commerce Drive Farmington Hills, MI (a) 124 707 504 210
23370 Commerce Drive Farmington Hills, MI (a) 59 233 138 66
24492 Indoplex Circle Farmington Hills, MI (a) 67 370 722 175
24528 Indoplex Circle Farmington Hills, MI (a) 91 536 1,035 263
31800 Plymouth Road--Building 1 Livonia, MI (a) 3,415 19,481 290 3,451
31800 Plymouth Road--Building 2 Livonia, MI (a) 671 3,860 46 685
31800 Plymouth Road--Building 3 Livonia, MI (a) 322 1,869 127 329
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
2791 Research Drive 3,016 3,576 755 1991 (l)
2871 Research Drive 1,741 2,068 436 1991 (l)
2911 Research Drive 2,512 3,016 666 1992 (l)
3011 Research Drive 2,425 2,882 626 1988 (l)
2870 Technology Drive 1,489 1,768 378 1988 (l)
2890 Technology Drive 1,101 1,307 270 1991 (l)
2900 Technology Drive 1,615 1,834 339 1992 (l)
2920 Technology Drive 822 975 197 1992 (l)
2930 Technology Drive 969 1,107 196 1991 (l)
2950 Technology Drive 990 1,175 241 1991 (l)
2960 Technology Drive 1,506 1,789 373 1992 (l)
23014 Commerce Drive 310 366 70 1983 (l)
23028 Commerce Drive 687 812 174 1983 (l)
23035 Commerce Drive 505 598 124 1983 (l)
23042 Commerce Drive 490 579 119 1983 (l)
23065 Commerce Drive 505 598 124 1983 (l)
23070 Commerce Drive 1,045 1,170 186 1983 (l)
23079 Commerce Drive 443 522 105 1983 (l)
23093 Commerce Drive 1,566 1,861 418 1983 (l)
23135 Commerce Drive 914 1,072 218 1986 (l)
23149 Commerce Drive 1,454 1,728 379 1985 (l)
23163 Commerce Drive 724 862 179 1986 (l)
23164 Commerce Drive 596 706 145 1986 (l)
23177 Commerce Drive 1,438 1,692 369 1986 (l)
23192 Commerce Drive 322 380 71 1986 (l)
23206 Commerce Drive 740 877 185 1985 (l)
23290 Commerce Drive 1,125 1,335 306 1980 (l)
23370 Commerce Drive 364 430 89 1980 (l)
24492 Indoplex Circle 984 1,159 273 1976 (l)
24528 Indoplex Circle 1,399 1,662 414 1976 (l)
31800 Plymouth Road--Building 1 19,735 23,186 853 1968/89 (l)
31800 Plymouth Road--Building 2 3,892 4,577 166 1968/89 (l)
31800 Plymouth Road--Building 3 1,989 2,318 85 1968/89 (l)
F-25
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
31800 Plymouth Road--Building 6 Livonia, MI (a) 557 3,207 646 578
31800 Plymouth Road--Building 7 Livonia, MI (a) 139 832 6 142
21477 Bridge Street Southfield, MI (c) 244 1,386 151 251
2965 Technology Drive Rochester Hills, MI 964 2,277 0 964
1451 Lincoln Avenue Madison, MI 299 1,703 183 305
4400 Purks Drive Auburn Hills, MI 602 3,410 92 610
4177A Varsity Drive Ann Arbor, MI 90 536 47 90
6515 Cobb Drive Sterling Heights, MI 305 1,753 10 305
46750 Port Street Plymouth, MI (e) 360 33 0 360
GRAND RAPIDS
3232 Kraft Avenue Grand Rapids, MI (b) 810 4,792 1,036 874
8181 Logistics Drive Grand Rapids, MI (b) 803 5,263 559 864
5062 Kendrick Court SE Grand Rapids, MI (b) 142 815 15 142
2 84th Street SW Grand Rapids, MI (a) 117 685 19 117
100 84th Street SW Grand Rapids, MI (a) 255 1,477 22 255
150 84th Street SW Grand Rapids, MI (a) 47 286 22 47
511 76th Street SW Grand Rapids, MI (a) 758 4,355 14 758
553 76th Street SW Grand Rapids, MI (a) 32 191 6 32
555 76th Street SW Grand Rapids, MI (a) 776 4,458 27 782
2925 Remico Avenue SW Grand Rapids, MI (a) 281 1,617 4 281
2935 Walkent Court NW Grand Rapids, MI (a) 285 1,663 3 285
3300 Kraft Avenue SE Grand Rapids, MI (a) 838 4,810 29 838
3366 Kraft Avenue SE Grand Rapids, MI (a) 833 4,780 10 833
4939 Starr Avenue Grand Rapids, MI (a) 117 681 27 117
5001 Kendrick Court SE Grand Rapids, MI (a) 210 1,221 28 210
5050 Kendrick Court SE Grand Rapids, MI (a) 1,721 11,433 4,592 1,721
5015 52nd Street SE Grand Rapids, MI (a) 234 1,321 4 234
5025 28th Street Grand Rapids, MI (a) 77 488 14 77
5079 33rd Street SE Grand Rapids, MI (a) 525 3,018 4 525
5333 33rd Street SE Grand Rapids, MI (a) 480 2,761 46 480
5130 Patterson Avenue SE Grand Rapids, MI (a) 137 793 8 137
5505 36th Street SE Grand Rapids, MI (c) 205 1,180 16 206
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
31800 Plymouth Road--Building 6 3,832 4,410 150 1968/89 (l)
31800 Plymouth Road--Building 7 835 977 35 1968/89 (l)
21477 Bridge Street 1,530 1,781 19 1986 (l)
2965 Technology Drive 2,277 3,241 55 1995 (l)
1451 Lincoln Avenue 1,880 2,185 31 1967 (l)
4400 Purks Drive 3,494 4,104 51 1987 (l)
4177A Varsity Drive 583 673 27 1993 (l)
6515 Cobb Drive 1,763 2,068 59 1984 (l)
46750 Port Street 33 393 0 1996 (l)
GRAND RAPIDS
3232 Kraft Avenue 5,764 6,638 254 1988 (l)
8181 Logistics Drive 5,761 6,625 255 1990 (l)
5062 Kendrick Court SE 830 972 33 1987 (l)
2 84th Street SW 704 821 27 1986 (l)
100 84th Street SW 1,499 1,754 56 1979 (l)
150 84th Street SW 308 355 12 1977 (l)
511 76th Street SW 4,369 5,127 167 1986 (l)
553 76th Street SW 197 229 7 1985 (l)
555 76th Street SW 4,479 5,261 178 1987 (l)
2925 Remico Avenue SW 1,621 1,902 61 1988 (l)
2935 Walkent Court NW 1,666 1,951 62 1991 (l)
3300 Kraft Avenue SE 4,839 5,677 182 1987 (l)
3366 Kraft Avenue SE 4,790 5,623 180 1987 (l)
4939 Starr Avenue 708 825 27 1985 (l)
5001 Kendrick Court SE 1,249 1,459 49 1983 (l)
5050 Kendrick Court SE 16,025 17,746 511 1988 (l)
5015 52nd Street SE 1,325 1,559 50 1987 (l)
5025 28th Street 502 579 30 1967 (l)
5079 33rd Street SE 3,022 3,547 113 1990 (l)
5333 33rd Street SE 2,807 3,287 114 1991 (l)
5130 Patterson Avenue SE 801 938 30 1987 (l)
5505 36th Street SE 1,195 1,401 51 1985 (l)
F-26
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
425 Gordon Industrial Court Grand Rapids, MI 611 3,747 534 644
2851 Prairie Street Grand Rapids, MI 377 2,778 231 445
2945 Walkent Court Grand Rapids, MI 310 2,074 294 352
537 76th Street Grand Rapids, MI 255 1,456 108 258
MINNEAPOLIS
2700 Freeway Boulevard Brooklyn Center, MN (b) 392 2,318 384 437
6403-6545 Cecilia Circle(g) Bloomington, MN (a) 723 2,683 553 781
1275 Corporate Center Drive Eagan, MN (a) 80 357 34 93
1279 Corporate Center Drive Eagan, MN (a) 105 357 82 109
2815 Eagandale Boulevard Eagan, MN (a) 80 357 53 97
6201 West 111th Street Bloomington, MN (a) 1,358 8,622 3,770 1,499
6925-6943 Washington Avenue Edina, MN (a) 117 504 534 237
6955-6973 Washington Avenue Edina, MN (a) 117 486 350 191
7251-7279 Washington Avenue Edina, MN (a) 129 382 400 182
7301-7329 Washington Avenue Edina, MN (a) 174 391 427 193
7101 Winnetka Avenue North Brooklyn Park, MN (a) 2,195 6,084 2,137 2,228
7600 Golden Triangle Drive Eden Prairie, MN (a) 566 1,394 983 623
7830-7890 12th Avenue South(g) Bloomington, MN (a) 723 2,588 306 745
7900 Main Street Northeast Fridley, MN (a) 480 1,604 272 503
7901 Beech Street Northeast Fridley, MN (a) 405 1,554 70 428
9901 West 74th Street Eden Prairie, MN (a) 621 3,289 1,957 639
10175-10205 Crosstown Circle Eden Prairie, MN (a) 132 686 51 174
11201 Hampshire Avenue South Bloomington, MN (a) 495 1,035 838 501
12220-12274 Nicollet Avenue(h) Burnsville, MN (a) 555 2,249 202 605
305 2nd Street Northwest Minneapolis, MN (a) 460 2,744 33 460
953 Westgate Drive Minneapolis, MN (a) 193 1,178 0 193
980 Lone Oak Road Minneapolis, MN (a) 683 4,103 33 695
990 Lone Oak Road Minneapolis, MN (a) 883 5,575 25 895
1030 Lone Oak Road Minneapolis, MN (a) 456 2,703 32 456
1060 Lone Oak Road Minneapolis, MN (a) 624 3,700 32 625
5400 Nathan Lane Minneapolis, MN (a) 749 4,461 25 749
6464 Sycamore Court Minneapolis, MN (a) 457 2,730 0 457
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
425 Gordon Industrial Court 4,248 4,892 187 1990 (l)
2851 Prairie Street 2,941 3,386 130 1989 (l)
2945 Walkent Court 2,326 2,678 102 1993 (l)
537 76th Street 1,561 1,819 29 1987 (l)
MINNEAPOLIS
2700 Freeway Boulevard 2,657 3,094 137 1981 (l)
6403-6545 Cecilia Circle(g) 3,178 3,959 1,046 1980 (l)
1275 Corporate Center Drive 378 471 107 1990 (l)
1279 Corporate Center Drive 435 544 126 1990 (l)
2815 Eagandale Boulevard 393 490 112 1990 (l)
6201 West 111th Street 12,251 13,750 807 1987 (l)
6925-6943 Washington Avenue 918 1,155 349 1972 (l)
6955-6973 Washington Avenue 762 953 289 1972 (l)
7251-7279 Washington Avenue 729 911 273 1972 (l)
7301-7329 Washington Avenue 799 992 300 1972 (l)
7101 Winnetka Avenue North 8,188 10,416 2,691 1990 (l)
7600 Golden Triangle Drive 2,320 2,943 750 1989 (l)
7830-7890 12th Avenue South(g) 2,872 3,617 997 1978 (l)
7900 Main Street Northeast 1,853 2,356 714 1973 (l)
7901 Beech Street Northeast 1,601 2,029 588 1975 (l)
9901 West 74th Street 5,228 5,867 405 1983/88 (l)
10175-10205 Crosstown Circle 695 869 221 1980 (l)
11201 Hampshire Avenue South 1,867 2,368 614 1986 (l)
12220-12274 Nicollet Avenue(h) 2,401 3,006 739 1989/90 (l)
305 2nd Street Northwest 2,777 3,237 109 1991 (l)
953 Westgate Drive 1,178 1,371 45 1991 (l)
980 Lone Oak Road 4,124 4,819 171 1992 (l)
990 Lone Oak Road 5,588 6,483 299 1989 (l)
1030 Lone Oak Road 2,735 3,191 107 1988 (l)
1060 Lone Oak Road 3,731 4,356 159 1988 (l)
5400 Nathan Lane 4,486 5,235 168 1990 (l)
6464 Sycamore Court 2,730 3,187 102 1990 (l)
F-27
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
6701 Parkway Circle Brooklyn Center, MN (c) 350 2,131 265 380
6601 Shingle Creek Parkway Brooklyn Center, MN (c) 411 2,813 441 505
10120 W 76th Street Eden Prairie, MN (c) 315 1,804 75 315
7615 Golden Triangle Eden Prairie, MN (c) 268 1,532 143 268
7625 Golden Triangle Eden Prairie, MN (c) 415 2,375 111 415
2605 Fernbrook Lane North Plymouth, MN (c) 443 2,533 254 444
12155 Nicollet Ave. Burnsville, MN 286 0 1,641 286
6655 Wedgewood Road Maple Grove, MN 1,465 8,410 61 1,466
900 Apollo Road Eagan, MN 1,029 5,855 188 1,029
7316 Aspen Lane North Brooklyn Park, MN 368 2,156 139 394
6707 Shingle Creek Parkway Brooklyn Center, MN 376 2,101 356 379
NASHVILLE
1621 Heil Quaker Boulevard Nashville, TN (b) 413 2,348 160 429
220-240 Great Circle Drive (h) Nashville, TN (a) 978 6,350 1,344 978
417 Harding Industrial Drive Nashville, TN (a) 1,006 6,586 742 1,116
501-521 Harding Industrial Drive (g) Nashville, TN (a) 645 3,382 1,045 700
ST. LOUIS
8921-8957 Frost Avenue Hazelwood, MO (b) 431 2,479 10 431
9043-9083 Frost Avenue Hazelwood, MO (b) 319 1,838 27 319
2121 Chapin Industrial Drive Vinita Park, MO (a) 606 4,384 1,115 614
1200 Andes Boulevard St. Louis, MO (a) 246 1,412 1 246
1248 Andes Boulevard St. Louis, MO (a) 194 1,120 50 194
1208-1226 Ambassador Boulevard St. Louis, MO (a) 235 1,351 1 235
1250 Ambassador Boulevard St. Louis, MO (a) 119 694 2 119
1503-1525 Fairview Industrial St. Louis, MO (a) 112 658 14 112
2441-2445 Northline Industrial Drive St. Louis, MO (a) 72 478 1 73
2462-2470 Schuetz Road St. Louis, MO (a) 174 1,004 0 174
10431-10449 Midwest Industrial Blvd St. Louis, MO (a) 237 1,360 20 237
10751 Midwest Industrial Boulevard St. Louis, MO (a) 193 1,119 0 193
11632-11644 Fairgrove Industrial Blvd St. Louis, MO (a) 109 637 1 109
11652-11666 Fairgrove Industrial Blvd St. Louis, MO (a) 103 599 7 103
11674-11688 Fairgrove Industrial Blvd St. Louis, MO (a) 118 689 26 118
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
6701 Parkway Circle 2,366 2,746 117 1987 (l)
6601 Shingle Creek Parkway 3,160 3,665 158 1985 (l)
10120 W 76th Street 1,879 2,194 39 1987 (l)
7615 Golden Triangle 1,675 1,943 47 1987 (l)
7625 Golden Triangle 2,486 2,901 67 1987 (l)
2605 Fernbrook Lane North 2,786 3,230 74 1987 (l)
12155 Nicollet Ave. 1,641 1,927 6 1995 (l)
6655 Wedgewood Road 8,470 9,936 281 1989 (l)
900 Apollo Road 6,043 7,072 125 1970 (l)
7316 Aspen Lane North 2,269 2,663 39 1978 (l)
6707 Shingle Creek Parkway 2,454 2,833 126 1986 (l)
NASHVILLE
1621 Heil Quaker Boulevard 2,492 2,921 52 1975 (l)
220-240 Great Circle Drive (h) 7,694 8,672 2,966 1979/82 (l)
417 Harding Industrial Drive 7,218 8,334 343 1972 (l)
501-521 Harding Industrial Drive (g) 4,372 5,072 192 1975 (l)
ST. LOUIS
8921-8957 Frost Avenue 2,489 2,920 93 1971 (l)
9043-9083 Frost Avenue 1,865 2,184 69 1970 (l)
2121 Chapin Industrial Drive 5,491 6,105 2,208 1969/87 (l)
1200 Andes Boulevard 1,413 1,659 53 1967 (l)
1248 Andes Boulevard 1,170 1,364 44 1967 (l)
1208-1226 Ambassador Boulevard 1,352 1,587 51 1966 (l)
1250 Ambassador Boulevard 696 815 26 1967 (l)
1503-1525 Fairview Industrial 672 784 27 1967 (l)
2441-2445 Northline Industrial Drive 478 551 36 1967 (l)
2462-2470 Schuetz Road 1,004 1,178 38 1965 (l)
10431-10449 Midwest Industrial Blvd 1,380 1,617 54 1967 (l)
10751 Midwest Industrial Boulevard 1,119 1,312 43 1965 (l)
11632-11644 Fairgrove Industrial Blvd 638 747 24 1967 (l)
11652-11666 Fairgrove Industrial Blvd 606 709 23 1966 (l)
11674-11688 Fairgrove Industrial Blvd 715 833 28 1967 (l)
F-28
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
GROSS
AMOUNT
CARRIED
AT CLOSE
COSTS OF PERIOD
(K) CAPITALIZED 12/31/95
INITIAL COST SUBSEQUENT TO ---------
LOCATION (J) -------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION LAND
- -------------------------------------- ------------------------ ------------- --------- --------- ------------- ---------
2337 Centerline Drive St. Louis, MO (d) 239 1,370 0 239
MILWAUKEE
N25 W23050 Paul Road Pewaukee, WI (a) 474 2,723 12 474
N25 W23255 Paul Road Waukesha County, WI (a) 571 3,270 1 571
N27 W23293 Roundy Drive Waukesha County, WI (a) 412 2,837 1 412
6523 N. Sidney Place Milwaukee, WI (d) 167 949 89 168
OTHER
2800 Airport Road(i) Denton, TX (a) 369 1,935 1,769 489
3501 Maple Street Abilene, TX (a) 67 1,057 1,048 259
4200 West Harry Street(h) Wichita, KS (a) 193 2,224 1,967 527
Industrial Park No. 2 West Lebanon, NH (a) 723 5,208 491 775
521 Green Cove Road(h) Huntsville, AL (d) 615 5,536 1,196 881
------------- --------- --------- ------------- ---------
$ 399,958 $ 101,564 $ 550,788 $ 105,164 $ 109,587
------------- --------- --------- ------------- ---------
------------- --------- --------- ------------- ---------
ACCUMULATED YEAR DEPRECIABLE
BUILDING AND DEPRECIATION BUILT/ LIVES
BUILDING ADDRESS IMPROVEMENTS TOTAL 12/31/95 RENOVATED (YEARS)
- -------------------------------------- ------------- --------- ------------ ---------- ------------
2337 Centerline Drive 1,370 1,609 51 1967 (l)
MILWAUKEE
N25 W23050 Paul Road 2,735 3,209 102 1989 (l)
N25 W23255 Paul Road 3,271 3,842 123 1987 (l)
N27 W23293 Roundy Drive 2,838 3,250 105 1989 (l)
6523 N. Sidney Place 1,037 1,205 2 1978 (l)
OTHER
2800 Airport Road(i) 3,584 4,073 840 1965 (l)
3501 Maple Street 1,913 2,172 446 1980 (l)
4200 West Harry Street(h) 3,857 4,384 905 1968 (l)
Industrial Park No. 2 5,647 6,422 1,323 1968 (l)
521 Green Cove Road(h) 6,466 7,347 1,509 1973 (l)
------------- --------- ------------
$ 647,929 $ 757,516 $ 68,749
------------- --------- ------------
------------- --------- ------------
- ------------------------
NOTES:
(a) Collateralizes the 1994 Mortgage Loan Payable.
(b) Collateralizes the 1995 Mortgage Loan Payable.
(c) Collateralizes the 1994 Acquisition Facility Payable.
(d) Collateralizes the 1995 Acquisition Facility Payable.
(e) Collateralizes the Construction Loans Payable.
(f) Collateralizes the Harrisburg Mortgage Loan Payable.
(g) Comprised of 2 properties.
(h) Comprised of 3 properties.
(i) Comprised of 5 properties.
(j) See description of encumbrances in Note 4 to Notes To Consolidated and
Combined Financial Statements.
F-29
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION--(CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
(k) Initial cost for each respective property is total acquisition costs
associated with its purchase.
(l) Depreciation is computed based upon the following estimated lives:
31.5 to 40
Buildings, Improvements................................................................. years
Tenant Improvements, Leasehold Improvements............................................. Life of lease
Furniture, Fixtures and Equipment....................................................... 5 to 10 years
(m) At December 31, 1995, the aggregate cost of land, buildings and equipment
for federal income tax purpose was approximately $755 million.
F-30
FIRST INDUSTRIAL, L.P.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
The changes in total real estate assets for three years ended December 31,
1995 are as follows:
1995 1994 1993
---------- ---------- ----------
Balance, Beginning of Year................................................... $ 669,608 $ 209,177 $ 192,053
Transfer of Assets Between Contributing Businesses........................... -- 4,893 --
Acquisitions, Construction Costs and Improvements............................ 87,908 455,538 17,124
---------- ---------- ----------
Balance, End of Year......................................................... $ 757,516 $ 669,608 $ 209,177
---------- ---------- ----------
---------- ---------- ----------
The changes in accumulated depreciation for three years ended December 31,
1995 are as follows:
1995 1994 1993
--------- --------- ---------
Balance, Beginning of Year....................................................... $ 49,314 $ 38,015 $ 31,318
Transfer of Assets Between Contributing Businesses............................... -- (2,075) --
Depreciation for Year............................................................ 19,435 13,374 6,697
--------- --------- ---------
Balance, End of Year............................................................. $ 68,749 $ 49,314 $ 38,015
--------- --------- ---------
--------- --------- ---------
F-31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with the historical
Consolidated and Combined Financial Statements and Notes thereto appearing
elsewhere in this Prospectus.
The discussion of First Industrial, L.P.'s (the "Partnership") results of
operations reported in the financial statements compares the nine months ended
September 30, 1996 to the nine months ended September 30, 1995, the year ended
December 31, 1995 with the year ended December 31, 1994, and the year ended
December 31, 1994 with the year ended December 31, 1993. For periods prior to
June 30, 1994, these results of operations include the operations of the
Contributing Businesses and exclude the operations of properties acquired
concurrently with or subsequent to June 30, 1994. For the period subsequent to
June 30, 1994, these results of operations include the operations of the
Partnership.
RESULTS OF OPERATIONS
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1995
At September 30, 1996, the Partnership owned 328 in-service properties with
approximately 29.9 million square feet of gross leasable area ("GLA"), compared
to 266 in-service properties with approximately 21.8 million square feet of GLA
at September 30, 1995. The addition of 67 properties acquired or developed
between October 1, 1995 and September 30, 1996 included the acquisitions of 65
properties comprising approximately 8.1 million square feet and the completed
construction of 2 build-to-suit properties containing a total of approximately
.3 million square feet. The sale of five properties comprised of approximately
.3 million square feet was also completed between October 1, 1995 and September
30, 1996.
Revenues increased by $22.9 million or 29.2%, due primarily to the
properties acquired or developed after September 30, 1995. Revenues from
properties owned prior to January 1, 1995, increased by approximately $2.7
million or 3.8% due to general rent increases and additional tenant recovery
income charges for additional property expenses incurred for the nine months
ended September 30, 1996.
Property expenses, which include real estate taxes, repairs and maintenance,
property management, utilities, insurance and other expenses, increased by $8.1
million or 38.7% due primarily to the properties acquired or developed after
September 30, 1995. Expenses from properties owned prior to January 1, 1995,
increased by approximately $2.1 million or 11.0% due to additional snow removal
expenses incurred in the Minneapolis and Harrisburg metropolitan areas,
additional repair and maintenance expenses incurred in the Chicago metropolitan
area and general real estate tax increases.
Interest expense increased by $.5 million for the nine month period ended
September 30, 1996 compared to the nine month period ended September 30, 1995.
The average outstanding debt balance was $19.3 million higher during the nine
months ended September 30, 1996, however, the impact on interest expense was
partially offset by lower interest rates on the $300 million mortgage loan
("1994 Mortgage Loan") as a result of certain interest rate protection
agreements entered into in July 1995 (the "Rate Agreements").
Amortization of interest rate protection agreements and deferred financing
costs decreased by $1.3 million due primarily to lower amortization of the Rate
Agreements compared to the amortization of the replaced interest rate protection
agreement.
Depreciation and other amortization increased by $4.1 million due primarily
to the additional depreciation and amortization related to the properties
acquired after September 30, 1995.
F-32
The $6.4 million loss from disposition of the interest rate protection
agreement in 1995 resulted from the replacement of the Partnership's interest
rate protection agreement entered into in connection with the $300 million
mortgage loan ("1994 Mortgage Loan") with the Rate Agreements. Approximately
$6.3 million of the loss is a non-cash loss, representing the difference between
the unamortized cost of the replaced interest rate protection agreement and the
cost of the Rate Agreements.
The $4.3 million gain on sales of properties in 1996 resulted from the sale
of three properties located in Huntsville, Alabama; one property located in
Detroit, Michigan and one property located in Grand Rapids, Michigan. Gross
proceeds for all sales totaled $12.1 million.
The $.8 million extraordinary item in 1996 represents the write-off of
unamortized deferred financing costs and a prepayment fee for loans that were
paid off in full and retired in 1996.
COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994.
At December 31, 1995, the Partnership owned 271 in-service properties
containing approximately 22.6 million square feet of GLA, compared to 246
in-service properties with approximately 19.2 million square feet of GLA at
December 31, 1994. Acquisitions of 20 properties containing approximately 2.8
million square feet of GLA were made between December 31, 1994 and December 31,
1995. Also during 1995, the Partnership completed development of five properties
and expansions of three properties already owned by the Partnership totaling .6
million square feet of GLA.
Revenues increased by $37.1 million or 53.5%, due primarily to the
properties acquired after December 31, 1993. Revenues from properties owned
prior to January 1, 1994 increased by $1.2 million or 3.2% due primarily to
increased rental rates upon renewal or replacement of tenant leases and an
increase in occupancy of certain properties located in the Detroit metropolitan
area.
Property expenses, which include real estate taxes, repairs and maintenance,
property management, utilities, insurance and other expenses, increased by $10.4
million or 58.2% due primarily to properties acquired after December 31, 1993.
For properties owned prior to January 1, 1994, property expenses increased by
$.2 million or 1.6% due to general increases in operating expenses, partially
offset by a decrease of real estate taxes for certain properties located in the
Detroit metropolitan area.
General and administrative expense increased by $2.0 million due primarily
to the additional expenses associated with being a public company (including
directors' fees, director and officer liability insurance, additional
professional fees relating to additional properties and personnel to manage and
expand the Company's business).
Interest expense increased from $22.4 million to $28.6 million. The increase
reflects higher average debt levels in 1995 related to acquisition and
development activity during the year, and higher average interest rates in 1995.
Depreciation and amortization increased by $7.7 million due primarily to the
additional depreciation and amortization related to the properties acquired
after December 31, 1993.
The $6.4 million loss from disposition of the interest rate protection
agreement in 1995 resulted from the replacement of the Partnership's interest
rate protection agreement entered into in connection with the 1994 Mortgage Loan
with the Rate Agreements. Approximately $6.3 million of the loss is a non-cash
loss, representing the difference between the unamortized cost of the replaced
interest rate protection agreement and the cost of the Rate Agreement.
COMPARISON OF YEAR ENDED DECEMBER 31, 1994 TO YEAR ENDED DECEMBER 31, 1993
At December 31, 1994, the Partnership owned 246 in-service properties
containing approximately 19.2 million square feet of GLA, compared to 124
in-service properties with approximately 6.4 million square feet of GLA at
December 31, 1993. Acquisitions of 26 properties containing approximately 4.8
million
F-33
square feet of GLA were made between December 31, 1993 and June 30, 1994.
Concurrent with the Initial Offering (as defined below), the Partnership
acquired 76 properties with approximately 6.2 million square feet of GLA.
Between July 1, 1994 and December 31, 1994, the Partnership acquired 20
properties and commenced construction on two build-to-suit properties,
containing a total of approximately 2.0 million square feet of GLA.
Revenues increased by $36.1 million or 108.8%, due primarily to the
properties acquired after December 31, 1993. Revenues from the properties owned
prior to December 31, 1993 increased by $1.9 million or 5.6% due primarily to an
increase in rental rates upon renewal or replacement of tenant leases and an
increase in occupancy for certain properties located in central Pennsylvania and
the Detroit metropolitan area.
Property expenses, which include real estate taxes, repairs and maintenance,
property management, utilities, insurance and other expenses, increased by $9.1
million or 102.6% due primarily to the properties acquired after December 31,
1993. For properties owned at December 31, 1993, property expenses increased by
$1.2 million due to general increases in operating expenses, partially offset by
a lower bad debt experience in the year ended December 31, 1994 compared to the
year ended December 31, 1993.
General and administrative expense increased by $.4 million due primarily to
the additional expenses associated with being a public company (including
directors' fees, director and officer liability insurance, additional
professional fees relating to additional properties and personnel to manage and
expand the Company's business).
Interest expense increased from $18.2 million to $22.4 million. Additional
debt was incurred to acquire properties after December 31, 1993, however, the
impact on interest expense was partially offset by lower interest rates on the
new debt.
Depreciation and amortization increased by $10.2 million due primarily to
the additional depreciation and amortization related to the properties acquired
after December 31, 1993.
The $1.4 million extraordinary item in 1994 represents the write off of the
net book value of intangible assets which were not transferred to the Company in
connection with the Initial Offering.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Partnership's unrestricted cash and cash
equivalents was $4.6 million and restricted cash was $9.6 million. Restricted
cash includes reserves required to be set aside under certain of the
Partnership's loans for payment of security deposit refunds, tenant
improvements, capital expenditures, interest, real estate taxes, insurance and
potential environmental costs. A portion of the cash reserve relating to
payments for potential environmental costs was established at the closing of the
$300 million mortgage loan (the "1994 Mortgage Loan") and is distributed to the
Partnership as such expenditures are made, and is not required to be replenished
to its original level. The portion of the cash reserve on the 1994 Mortgage Loan
relating to payments for tenant improvements, capital expenditures, interest,
real estate taxes and insurance is established monthly, distributed to the
Partnership as such expenditures are made and is replenished to a level adequate
to make the next periodic payment of such expenditures. The portion of the cash
reserve relating to security deposit refunds on the $40 million mortgage loan
("1995 Mortgage Loan") is adjusted as tenants turn over. The portion of the cash
reserve relating to payments for capital expenditures, interest, real estate
taxes and insurance on the 1995 Mortgage Loan is established monthly,
distributed to the Partnership as such expenditures are made and is replenished
to a level to make the next periodic payment of such expenditures.
Net cash provided by operating activities was $48.2 million for the nine
months ended September 30, 1996 compared to $28.7 million for the nine months
ended September 30, 1995. This increase is due primarily to the operations of
properties acquired or developed between October 1, 1995 and September 30, 1996.
Net cash provided by operating activities was $35.1 million for the year ended
December 31,
F-34
1995 compared to $23.0 million for the year ended December 31, 1994. The
increase is due primarily to the operations of properties acquired or developed
after December 31, 1994. Net cash provided by operating activities was $23.0
million for the year ended December 31, 1994 compared to $8.7 million for the
year ended December 31, 1993. This increase was due primarily to the
transactions related to the general partner of the Partnership's (the "Company")
initial public offering of 16,175,000 shares of $.01 par value common stock (the
"Initial Offering") in June 1994 and the operations of the Partnership
subsequent to the Initial Offering.
Net cash used in investing activities increased to $163.9 million for the
nine months ended September 30, 1996 from $68.9 million for the nine months
ended September 30, 1995 due to an increase in the acquisition of properties.
Net cash used in investing activities was $84.2 million for the year ended
December 31, 1995 compared to $448.6 million and $17.1 million for the years
ended December 31, 1994 and 1993, respectively. The significantly higher net
cash used in investing activities for the year ended December 31, 1994 reflects
the purchase of additional properties in conjunction with the Initial Offering
in June 1994.
Net cash provided by financing activities increased to $111.8 million for
the nine months ended September 30, 1996 from $38.5 million for the nine months
ended September 30, 1995 primarily due to the Company's issuance of 5,175,000
shares of $.01 par value common stock at $25.50 per share in February 1996. The
net proceeds were contributed to the Partnership for 5,175,000 limited
partnership units of the Partnership (the "Units") (the "1996 Partnership
Contribution"). The remaining change was primarily caused by the consummation of
a $36.7 million mortgage loan offset by a net decrease in acquisition line
borrowings and an increase in partnership distributions. Net cash provided by
financing activities for the year ended December 31, 1995 was $48.5 million,
composed primarily of a contribution from the general partner of one of the
Partnership's subsidiaries, and additional mortgage loans and construction
loans, which were partially offset by a reduction in the outstanding borrowings
under the 1994 Acquisition Facility. Net cash provided by financing activities
for the year ended December 31, 1994 was $431.6 million, compared to $9.1
million for the year ended December 31, 1993, reflecting primarily debt and
equity transactions relating to the Initial Offering in June 1994 and an
increase in indebtedness due to the properties acquired subsequent to the
Initial Offering.
On January 22, 1996, the Partnership paid a fourth quarter 1995 distribution
of 48.75 cents per Unit totaling approximately $10.0 million. On April 22, 1996,
the Partnership paid a first quarter 1996 distribution of 48.75 cents per Unit,
totaling approximately $12.8 million. On July 22, 1996, the Partnership paid a
second quarter 1996 distribution of 48.75 cents per Unit, totaling approximately
$12.8 million. On October 21, 1996, the Partnership paid a third quarter 1996
distribution of 48.75 cents per Unit, totaling approximately $12.8 million.
The Partnership has considered its short-term liquidity needs and the
adequacy of its estimated cash flow from operations and other expected liquidity
sources to meet these needs. The Partnership believes that its principal
short-term liquidity needs are to fund normal recurring expenses, debt service
requirements, and partnership distributions. The Partnership anticipates that
these needs will be met with cash flows provided by operating activities.
The Partnership expects to meet long-term liquidity requirements such as
property acquisitions, scheduled debt maturities, major renovations, expansions
and other nonrecurring capital improvements through long-term secured and
unsecured indebtedness and the issuance of additional partnership units. The
Partnership may finance the development or acquisition of additional properties
through borrowings under the 1994 Acquisition Facility and the Partnership's $40
million collateralized acquisition facility ("1996 Acquisition Facility"). At
September 30, 1996, borrowings under the 1994 Acquisition Facility bore interest
at a weighted average interest rate of 7.5%. As of September 30, 1996, including
properties in the process of being added to the collateral base, the Partnership
had approximately $45.5 million available in additional borrowings under the
1994 Acquisition Facility. While the Partnership may sell properties if
F-35
property or market conditions make it desirable, the Partnership does not expect
to sell assets in the foreseeable future to satisfy its liquidity requirements.
In October 1996, the Company issued 5,750,000 shares of $.01 par value
common stock at $25.50 per share, resulting in net proceeds of $137.6 million.
The Company contributed the net proceeds for 5,750,000 Units. Of the proceeds,
$84.2 million was used to repay in full the 1994 and 1996 Acquisition
Facilities.
OTHER
The Partnership reviews its properties on a quarterly basis for impairment
and provides a provision if impairments are determined. First, to determine if
impairment may exist, the Partnership reviews its properties and identifies
those which have had either an event of change or event of circumstances
warranting further assessment of recoverability. Then, the Partnership estimates
the fair value of those properties on an individual basis by capitalizing the
expected net operating income and discounting the expected cash flows of the
properties. Such amounts are then compared to the property's depreciated cost to
determine whether an impairment exists.
In accordance with Emerging Issues Task Force Issue No. 95-6, "Accounting by
a REIT for an Investment in a Service Corporation," the Partnership has for the
year ended December 31, 1995, consolidated two service companies in which it
owns a 99% economic interest and 8% voting interest. For the six months ended
December 31, 1994, the cumulative effect of adopting this change in accounting
principle was not material to the Partnership's 1994 financial statements.
Effective January 1, 1995, the Partnership adopted Financial Accounting
Standards Statement No. 121 (FAS 121), "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The Adoption of
FAS 121 did not have a material impact on the Partnership.
INFLATION
For the last several years, inflation has not had a significant impact on
the Partnership because of the relatively low inflation rates in the
Partnership's markets of operation. Most of the Partnership's leases require the
tenants to pay their share of operating expenses, including common area
maintenance, real estate taxes and insurance, thereby reducing the Partnership's
exposure to increases in costs and operating expenses resulting from inflation.
In addition, many of the leases are for terms less than five years which may
enable the Partnership to replace existing leases with new leases at higher base
rentals if rents of existing leases are below the then-existing market rate.
F-36
FIRST INDUSTRIAL, L.P. AND CONTRIBUTING BUSINESSES
SELECTED FINANCIAL DATA (1)
(IN THOUSANDS EXCEPT PROPERTY DATA)
FIRST INDUSTRIAL, L.P. CONTRIBUTING BUSINESSES
(CONSOLIDATED) (COMBINED)
------------------------------------------------ -------------------------
SIX MONTH SIX MONTH
NINE MONTHS PERIOD PERIOD
ENDED YEAR ENDED ENDED ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1995 1994 1994 1993
--------- --------- ------------ ------------ ----------- ------------
STATEMENTS OF OPERATIONS DATA:
Total Revenues.............................. 101,461 78,532 106,474 46,557 22,816 33,237
Property Expenses........................... 28,982 20,895 28,302 11,853 6,036 8,832
General and Administrative Expense.......... 2,321 2,428 3,792 1,047 795 1,416
Interest Expense............................ 21,600 21,109 28,591 10,588 11,773 18,187
Amortization of Interest Rate Protection
Agreement ("IRPA") and Deferred Financing
Costs...................................... 2,412 3,684 4,438 2,904 858 997
Depreciation and Other Amortization......... 20,456 16,320 22,264 9,802 4,744 7,105
Loss From Disposal of IRPA.................. -- 6,410 6,410 -- -- --
Management and Construction Income (Loss),
Net........................................ -- -- -- -- (81) (99)
Gain on Sales of Properties................. 4,320 -- -- -- -- --
Minority Interest........................... (3,178) (65) (554) (69) -- --
--------- --------- ------------ ------------ ----------- ------------
Income (Loss) Before Extraordinary Items.... 26,832 7,621 12,123 10,294 (1,471) (3,399)
Extraordinary Gain (Loss)................... (821) -- -- -- (1,449) --
--------- --------- ------------ ------------ ----------- ------------
Net Income (Loss)........................... 26,011 7,621 12,123 10,294 (2,920) (3,399)
--------- --------- ------------ ------------ ----------- ------------
--------- --------- ------------ ------------ ----------- ------------
BALANCE SHEET DATA:
Net Investment in Real Estate............... 879,703 678,626 688,767 620,294 556,902 171,162
Total Assets................................ 943,612 736,589 757,307 690,988 616,767 189,789
Mortgage Loans/Acquisition Facilities
Payable and Construction Loans............. 454,648 418,540 399,958 348,700 305,000 179,568
Mortgage Loans (affiliated)................. -- -- -- -- -- 7,624
Total Liabilties............................ 503,073 442,340 426,855 374,812 323,703 227,553
Partners' Capital/(Net Deficit)............. 399,396 291,693 287,172 313,544 292,134 (37,548)
OTHER DATA:
Cash Flows From:
Operating Activities...................... 46,886 28,737 35,062 17,954 5,026 8,700
Investing Activities...................... (162,536) (68,879) (84,159) (73,840) (374,757) (17,124)
Financing Activities...................... 111,815 38,494 48,484 57,423 374,152 9,093
Gross Leasable Area at end of Period........ 29,872,808 21,753,089 22,562,755 19,169,321 17,393,813 6,376,349
Total Properties............................ 328 266 271 246 226 124
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1992 1991
------------ ------------
STATEMENTS OF OPERATIONS DATA:
Total Revenues.............................. 31,145 30,696
Property Expenses........................... 7,308 6,954
General and Administrative Expense.......... 1,699 1,808
Interest Expense............................ 18,350 18,358
Amortization of Interest Rate Protection
Agreement ("IRPA") and Deferred Financing
Costs...................................... 1,644 --
Depreciation and Other Amortization......... 6,328 7,421
Loss From Disposal of IRPA.................. -- --
Management and Construction Income (Loss),
Net........................................ 136 257
Gain on Sales of Properties................. -- --
Minority Interest........................... -- --
------------ ------------
Income (Loss) Before Extraordinary Items.... (4,048) (3,588)
Extraordinary Gain (Loss)................... 2,340 --
------------ ------------
Net Income (Loss)........................... (1,708) (3,588)
------------ ------------
------------ ------------
BALANCE SHEET DATA:
Net Investment in Real Estate............... 160,735 164,338
Total Assets................................ 175,693 178,157
Mortgage Loans/Acquisition Facilities
Payable and Construction Loans............. 168,659 169,807
Mortgage Loans (affiliated)................. 7,951 8,323
Total Liabilties............................ 208,569 209,755
Partners' Capital/(Net Deficit)............. (32,876) (31,598)
OTHER DATA:
Cash Flows From:
Operating Activities...................... 1,877
Investing Activities...................... (2,317)
Financing Activities...................... 1,250
Gross Leasable Area at end of Period........ 5,883,730 5,883,730
Total Properties............................ 118 118
- ------------------------
(1) The selected financial data includes the combined financial statements of
the Contributing Busineses for the period prior to July 1, 1994 and the
combined financial statements of First Industrial, L.P., for the periods
after June 30, 1994.
F-37
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities registered hereby, which will be
borne by the Company:
Securities and Exchange Commission registration fee............... $ 151,515
Fees of Rating Agencies........................................... 75,000
Printing and duplicating expenses................................. 75,000
Legal fees and expenses........................................... 250,000
Blue sky fees and expenses........................................ 15,000
Accounting fees and expenses...................................... 50,000
Miscellaneous..................................................... $ 100,000
---------
Total......................................................... $ 716,515
---------
---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and Bylaws provide certain limitations on the
liability of the Company's Directors and officers for monetary damages to the
Company. The Articles of Incorporation and Bylaws obligate the Company to
indemnify its Directors and officers, and permit the Company to indemnify its
employees and other agents, against certain liabilities incurred in connection
with their service in such capacities. These provisions could reduce the legal
remedies available to the Company and its stockholders against these
individuals. The provisions of Maryland law provide for the indemnification of
officers and directors of a company under certain circumstances.
The Partnership Agreement of the Operating Partnership contains provisions
indemnifying the Company and its officers, directors and stockholders to the
fullest extent permitted by the Delaware Revised Uniform Limited Partnership
Act.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
4.1 Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit
3.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102).
4.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 4.1 of the Company's
Registration Statement on Form S-3, File No. 333-03999).
4.3 Articles of Amendment to the Company's Articles of Incorporation dated June 20, 1994 (incorporated by
reference to Exhibit 3.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996,
File No. 1-13102).
4.4 Articles Supplementary relating to the Company's 9 1/2% Series A Cumulative Preferred Stock, $.01 par
value (incorporated by reference to Exhibit 3.4 of the Form 10-Q of the Company for the fiscal
quarter ended June 30, 1996, File No. 1-13102).
4.5 Articles of Amendment to the Company's Articles of Incorporation dated May 31, 1996 (incorporated by
reference to Exhibit 3.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996,
File No. 1-13102).
II-1
EXHIBIT
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
4.6* Form of Indenture
5* Opinion of Cahill Gordon & Reindel, counsel to the Registrants, as to the legality of the securities
being registered, together with the opinion of McGuire, Woods, Battle & Boothe, L.L.P.
8* Opinion of Cahill Gordon & Reindel, counsel to the Registrants, as to certain tax matters.
12.1* Computation of ratios of earnings to fixed charges and preferred stock dividends of the Company.
12.2* Computation of ratios of earnings to fixed charges and fixed preferred distributions of the Operating
Partnership.
23.1* Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Cahill Gordon & Reindel (included in Exhibit 5 and Exhibit 8).
23.3* Consent of McGuire, Woods, Battle & Boothe, L.L.P. (included in Exhibit 5).
24* Power of Attorney (included on page II-5).
25** Statement of eligibility of Trustee on Form T-1
27.1* Financial Data Schedule
27.2* Financial Data Schedule
- ------------------------
* Filed herewith.
** To be filed by amendment or incorporated by reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act of 1933 if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in
II-2
periodic reports filed with or furnished to the Commission by the
undersigned registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The registrants hereby undertake that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the annual report
of either of the registrants pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer, or controlling person of the registrants in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrants will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
(d) The undersigned registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act ("Act") in
accordance with the rules and regulations prescribed by the Commission under
section 305(b)(2) of the Act.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on February 14, 1997.
FIRST INDUSTRIAL REALTY TRUST, INC.
By: /s/ MICHAEL T. TOMASZ
-----------------------------------------
Name: Michael T. Tomasz
Title: President and Chief Executive
Officer
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust, Inc.
By: /s/ MICHAEL T. TOMASZ
-----------------------------------------
Name: Michael T. Tomasz
Title: President and Chief Executive
Officer
II-4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Michael T. Tomasz, Michael W. Brennan and
Michael J. Havala, and each of them (with full power to each of them to act
alone), his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each of such attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection with such matters, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each of such attorneys-in-fact and agents or
his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
/s/ MICHAEL T. TOMASZ
- ------------------------------ Principal Executive February 14, 1997
Michael T. Tomasz Officer and Director
/s/ MICHAEL J. HAVALA
- ------------------------------ Principal Financial and February 14, 1997
Michael J. Havala Accounting Officer
/s/ MICHAEL W. BRENNAN
- ------------------------------ Chief Operating Officer February 14, 1997
Michael W. Brennan and Director
/s/ MICHAEL G. DAMONE
- ------------------------------ Director February 14, 1997
Michael G. Damone
/s/ KEVIN W. LYNCH
- ------------------------------ Director February 14, 1997
Kevin W. Lynch
/s/ JOHN E. RAU
- ------------------------------ Director February 14, 1997
John E. Rau
/s/ JAY H. SHIDLER
- ------------------------------ Chairman of the Board of February 14, 1997
Jay H. Shidler Directors
/s/ ROBERT J. SLATER
- ------------------------------ Director February 14, 1997
Robert J. Slater
/s/ J. STEVEN WILSON
- ------------------------------ Director February 14, 1997
J. Steven Wilson
II-5
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE
- ---------- ------------------------------------------------------------------------------------------------- -----------
4.1 Amended and Restated Articles of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No.
1-13102).
4.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 4.1 of the
Company's Registration Statement on Form S-3, File No. 333-03999).
4.3 Articles of Amendment to the Company's Articles of Incorporation dated June 20, 1994
(incorporated by reference to Exhibit 3.2 of the Form 10-Q of the Company for the fiscal quarter
ended June 30, 1996, File No. 1-13102).
4.4 Articles Supplementary relating to the Company's 9 1/2% Series A Cumulative Preferred Stock, $.01
par value (incorporated by reference to Exhibit 3.4 of the Form 10-Q of the Company for the
fiscal quarter ended June 30, 1996, File No. 1-13102).
4.5 Articles of Amendment to the Company's Articles of Incorporation dated May 31, 1996 (incorporated
by reference to Exhibit 3.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30,
1996, File No. 1-13102).
4.6* Form of Indenture
5* Opinion of Cahill Gordon & Reindel, counsel to the Registrants, as to the legality of the
securities being registered, together with the opinion of McGuire, Woods, Battle & Boothe, L.L.P.
8* Opinion of Cahill Gordon & Reindel, counsel to the Registrants, as to certain tax matters.
12.1* Computation of ratios of earnings to fixed charges and preferred stock dividends of the Company.
12.2* Computation of ratios of earnings to fixed charges and fixed preferred distributions of the
Operating Partnership.
23.1* Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Cahill Gordon & Reindel (included in Exhibit 5 and Exhibit 8).
23.3* Consent of McGuire, Woods, Battle & Boothe, L.L.P. (included in Exhibit 5).
24* Power of Attorney (included on page II-5).
25** Statement of eligibility of Trustee on Form T-1
27.1* Financial Data Schedule
27.2* Financial Data Schedule
- ------------------------
* Filed herewith.
** To be filed by amendment or incorporated by reference.