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EXHIBIT 99.4
Notes to Pro Forma Combined Financial Statements
1) Proceeds from Property Sales
(In thousands)
USE OF PROCEEDS
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NET PROCEEDS MORTGAGE NET PROCEEDS BANK
AFTER COSTS DEBT ASSUMED AFTER DEBT NOTE CREDIT
PROPERTY DATE SOLD AND PRORATIONS OR REPAID ASSUMPTION PAYABLE FACILITY CASH
-------- --------- -------------- --------- ------------- ------- -------- ----
Offices
Beck (a) March 23, 1999 $ 1,772 $ 1,772 $ 1,772
Sutter Buttes(a) April 1, 1999 3,627 3,627 3,627
Apartments (a),(b) May 12, 1999 83,523 $ 37,520 46,688 15,703 $30,985
Parking Facility
Magic Mile (a) May 17, 1999 1,894 1,894 1,894
Retail
Woodland Commons (a) February 17, 1999 20,789 11,469 9,320 9,320
Northwest properties May 5, 1999 36,075 36,075 2,675 33,400
(a),(c)
Fingerlakes Mall (a) June 1, 1999 2,168 2,168 2,168
Ft. Dodge and Kandi June 10, 1999 21,722 21,722 122 21,600
Malls(a),(d)
Mountaineer Mall July 1, 1999 9,928 3,619 6,309 6,309
Fairgrounds Mall July 28, 1999 24,019 24,019 5,872 18,147
Southwestern Shopping 181,451 161,376 20,075 20,075
Malls(e)
(a)Properties were sold during the first six months of 1999 and the
transactions have been recorded in the June 30, 1999 Combined Balance
Sheet. For purposes of the Pro Forma Combined Statement of
Operations, the transactions are assumed to have occurred on the
first day of each period.
(b)The apartment portfolio, which was sold to one purchaser, consisted
of the following properties: Somerset Lakes in Indianapolis, IN,
Steeplechase and Hunter's Creek, both in Cincinnati, OH, Beechlake in
Durham, NC, Walden Village in Atlanta, GA, Briarwood in Fayetteville,
NC and Windgate Place and Woodfield Gardens, both in Charlotte, NC.
(c)The Northwest Malls, which were sold to one purchaser, consisted of
the following properties: Valley Mall in Yakima, WA, Valley North
Mall in Wenatchee, WA and Mall 205 and Plaza 205, both in Portland,
OR.
(d) Both malls were sold to one purchaser.
(e)The Southwestern Shopping Malls, which will be sold to one
purchaser, consist of the following properties: Alexandria Mall in
Alexandria, LA, Brazos Mall in Lake Jackson, TX, Killeen Mall in
Killeen, TX, Mesilla Valley Mall in Las Cruces, NM, Shawnee Mall in
Shawnee, OK and Villa Linda Mall in Santa Fe, NM. Net proceeds
reflect an estimate of approxomately a $5 million prepayment penalty
for the Park Plaza Mall in Little Rock, AR, which will not be sold in
this transaction but is cross collateralized with the aforementioned
malls. The Pro Forma Financial Statements also assume that the debt
associated with Park Plaza of approximately $36.9 million will be
repaid with net proceeds from the sale of the Southwestern Shopping
Malls at 1.25 times the balance outstanding (approximately $46
million). The amount of the repayment of the Park Plaza debt in
excess of the balance outstanding at June 30, 1999 (approximately
$9.2 million) is used to reduce the mortgage balances assumed on the
six Southwestern Shopping Malls. Consequently, the debt assumed by
the purchaser is approximately $115 million. Additionally,
approximately $11.8 million of cash as of June 30, 1999, which is
additional collateral for the mortgages securing these malls, will be
reclassified from restricted to unrestricted cash upon the sale.
Mortgage Debt at June 30, 1999
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Six Malls Park Plaza Total To
Property To Be Sold To Be Repaid Be Repaid
-------- ---------- ------------ ---------
Alexandria $ 21,126
Brazos 15,502
Killeen 27,874
Mesilla Valley 24,255
Shawnee 11,394
Park Plaza $36,921
Villa Linda 24,304
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$124,455
Required repayment of Park Plaza
Mortgage at 1.25 times
outstanding balance at payoff (9,230) 9,230
------- ------- -------
$115,255 $46,151 $161,376
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2) For purposes of the December 31, 1998 Pro Forma Combined Statement of
Operations, $87.5 million of Senior Notes are assumed repaid on January
1, 1998 as the registrant in August 1998 issued a $90 million note
payable to repay $87.5 million of the Senior Notes. For purposes of the
June 30, 1999 Pro Forma Combined Balance Sheet, $37.2 million repayment
of the note payable and $85.9 million repayment of the bank credit
facility was reflected in the June 30, 1999 historical Combined Balance
Sheet as the transactions occurred prior to June 30, 1999.
3) The apartment division general and administrative expenses are
eliminated on the first day of each period for the Pro Forma Combined
Statement of Operations, as the entire portfolio was sold. The retail
division general and administrative expenses are reduced on the first
day of each period for the Pro Forma Combined Statements of Operations.
The reduction represents the closure of a regional office which will no
longer be necessary pending the property sales.
4) As the purchase price for the six Southwestern Shopping Malls was below
net book value of these malls at June 30, 1999, a $9 million impairment
loss was recorded as of June 30, 1999. The $9 million impairment loss
also is included in the 1998 Pro Forma Combined Statement of
Operations.