-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PMp5OI+xMbdNaa0iMW7UC+mCuoFK8ZpfGqa5Ky0zPUYBp1Ydzmy3ASbu2GbriRP1 jNeCQTPNqLBIX2lHFCZyMQ== 0000783280-99-000002.txt : 19990330 0000783280-99-000002.hdr.sgml : 19990330 ACCESSION NUMBER: 0000783280-99-000002 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUKE REALTY INVESTMENTS INC CENTRAL INDEX KEY: 0000783280 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 351740409 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-09044 FILM NUMBER: 99575357 BUSINESS ADDRESS: STREET 1: 8888 KEYSTONE CROSSING STREET 2: STE 1200 CITY: INDIANAPOLIS STATE: IN ZIP: 46240 BUSINESS PHONE: 3178086000 MAIL ADDRESS: STREET 1: 8888 KEYSTONE CROSSING STREET 2: STE 1200 CITY: INDIANAPOLIS STATE: IN ZIP: 46240 10-K405 1 1998 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) /X/ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) for the fiscal year ended December 31, 1998 ----------------- or / / Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) for the transition period from to ------- ------- Commission file number 1-9044 ------ DUKE REALTY INVESTMENTS, INC. ------------------------------ (Exact name of registrant as specified in its charter) Indiana 35-1740409 --------------------------------------------- ----------------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 8888 Keystone Crossing, Suite 1200 Indianapolis, Indiana 46240 ---------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) (317) 808-6000 -------------------------------------------------- (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: Title of each class: Name of each exchange on which registered: ------------------- ---------------------------------- Common Stock ($.01 par value) New York Stock Exchange Preferred Share Purchase Rights New York Stock Exchange Depositary Shares, each representing a 1/10 share interest in a 9.10% Series A Cumulative Redeemable Preferred Shares ($.01 par value) New York Stock Exchange Depositary Shares, each representing a 1/10 share interest in a 7.37% Series D Convertible Cumulative Redeemable Preferred Shares ($.01 par value) New York Stock Exchange Depositary Shares, each representing a 1/10 share interest in a 8.25% Series E Cumulative Redeemable Preferred Shares ($.01 par value) New York Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /X/ The aggregate market value of the voting shares of the Registrant's outstanding common shares held by non-affiliates of the Registrant is $1,726,803,060 based on the last reported sale price on March 1, 1999. The number of Common Shares outstanding as of March 1, 1999 was 86,690,489 ($.01 par value). TABLE OF CONTENTS FORM 10-K Item No. Page(s) -------- ------ PART I 1. Business 1 - 4 2. Properties 4 - 17 3. Legal Proceedings 17 4. Submission of Matters to a Vote of Security Holders 17 PART II 5. Market for the Registrant's Common Stock and Related Security Holder Matters 18 6. Selected Financial Data 18 - 19 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 19 - 27 7a. Quantitative and Qualitative Disclosure about Market Risks 27 - 28 8. Financial Statements and Supplementary Data 28 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 28 PART III 10. Directors and Executive Officers of the Registrant 28 - 31 11. Executive Compensation 31 - 39 12. Security Ownership of Certain Beneficial Owners and Management 39 - 40 13. Certain Relationships and Related Transactions 41 PART IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 42 - 70 Signatures 71 - 72 Exhibits 73 - 74 WHEN USED IN THIS FORM 10-K REPORT, THE WORDS "BELIEVES," "EXPECTS," "ESTIMATES" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD- LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. IN PARTICULAR, AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY ARE CONTINUED QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST, GENERAL BUSINESS AND ECONOMIC CONDITIONS, COMPETITION, INCREASES IN REAL ESTATE CONSTRUCTION COSTS, INTEREST RATES, ACCESSIBILITY OF DEBT AND EQUITY CAPITAL MARKETS AND OTHER RISKS INHERENT IN THE REAL ESTATE BUSINESS INCLUDING TENANT DEFAULTS, POTENTIAL LIABILITY RELATING TO ENVIRONMENTAL MATTERS AND ILLIQUIDITY OF REAL ESTATE INVESTMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. READERS ARE ALSO ADVISED TO REFER TO THE COMPANY'S FORM 8-K REPORT AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON MARCH 28, 1996 FOR ADDITIONAL INFORMATION CONCERNING THESE RISKS. PART I ITEM 1. BUSINESS Duke Realty Investments, Inc. (the "Company") is a self-administered and self-managed real estate investment trust ("REIT"). The Company began operations upon completion of its initial public offering in February 1986. In October 1993, the Company completed an additional common stock offering and acquired the rental real estate and service businesses of Duke Associates, whose operations began in 1972. The Company owns and rents industrial, office and retail properties throughout the Midwest (see discussion of Weeks merger below). As of December 31, 1998, the Company owned interests in a diversified portfolio of 493 rental properties comprising 59.3 million square feet (including 40 properties and three expansions comprising 7.2 million square feet under development). Substantially all of these properties are located in the Company's primary markets of Indianapolis, Indiana; Cincinnati, Cleveland, and Columbus, Ohio; St. Louis, Missouri; Minneapolis, Minnesota; Chicago, Illinois and Nashville, Tennessee. The Company, through its service operations provides, on a fee basis, leasing, management, construction, development and other real estate services for approximately 6.9 million square feet of properties owned by third parties. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 8, "Financial Statements and Supplementary Data" for financial information. The Company's rental operations are conducted through Duke Realty Limited Partnership (the "Operating Partnership"). In addition, the Company conducts its service operations through Duke Realty Services Limited Partnership and Duke Construction Limited Partnership, in which the Company's wholly-owned subsidiary, Duke Services, Inc., is the sole general partner. All references to the "Company" in this Form 10-K Report include the Company and those entities owned or controlled by the Company, unless the context indicates otherwise. The Company has the largest commercial real estate operations in Indianapolis and Cincinnati and is one of the largest real estate companies in the Midwest. The Company's headquarters and executive offices are located in Indianapolis, Indiana. In addition, the Company has seven regional offices located in Cincinnati, Ohio; Columbus, Ohio; Cleveland, Ohio; Chicago, Illinois; Nashville, Tennessee; St. Louis, Missouri and Minneapolis, Minnesota. The Company had 748 employees as of December 31, 1998. - 1 - BUSINESS STRATEGY The Company's business objective is to increase its Funds From Operations ("FFO") by (i) maintaining and increasing property occupancy and rental rates through the aggressive management of its portfolio of existing properties; (ii) expanding existing properties; (iii) developing and acquiring new properties; and (iv) providing a full line of real estate services to the Company's tenants and to third-parties. FFO is defined by the National Association of Real Estate Investment Trusts as net income or loss excluding gains or losses from debt restructuring and sales of property plus depreciation and amortization, and after adjustments for minority interest and unconsolidated companies (adjustments for minority interests and unconsolidated companies are calculated to reflect FFO on the same basis). While management believes that FFO is a relevant measure of the Company's operating performance because it is widely used by industry analysts to measure the operating performance of equity REITs, such amount does not represent cash flow from operations as defined by generally accepted accounting principles, should not be considered as an alternative to net income as an indicator of the Company's operating performance, and is not indicative of cash available to fund all cash flow needs. As a fully integrated commercial real estate firm, the Company believes that its in-house leasing, management, development and construction services and the Company's significant base of commercially zoned and unencumbered land in existing business parks should give the Company a competitive advantage in its future development activities. The Company believes that the analysis of real estate opportunities and risks can be done most effectively at regional or local levels. As a result, the Company intends to continue its emphasis on increasing its market share and effective rents in the markets where it owns properties (see discussion of Weeks merger below). The Company also expects to utilize its approximately 1,750 acres of unencumbered land and its many business relationships with more than 3,600 commercial tenants to expand its build-to-suit business (development projects substantially pre-leased to a single tenant) and to pursue other development and acquisition opportunities in its primary markets and elsewhere. The Company believes that this regional focus will allow it to assess market supply and demand for real estate more effectively as well as to capitalize on its strong relationships with its tenant base. The Company's policy is to seek to develop and acquire Class A commercial properties located in markets with high growth potential for Fortune 500 companies and other quality regional and local firms. The Company's industrial and suburban office development focuses on business parks and mixed-use developments suitable for development of multiple projects on a single site where the Company can create and control the business environment. These business parks and mixed-use developments generally include restaurants and other amenities which the Company believes will create an atmosphere that is particularly efficient and desirable. The Company's retail development focuses on community, power and neighborhood centers in its existing markets. As a fully integrated real estate company, the Company is able to arrange for or provide to its industrial, office and retail tenants not only well located and well maintained facilities, but also additional services such as build-to-suit construction, tenant finish construction, expansion flexibility and advertising and marketing services. All of the Company's properties are located in areas that include competitive properties. Such properties are generally owned by institutional investors, other REITs or local real estate operators; however, no single competitor or small group of competitors is dominant in the Company's current markets. The supply and demand of similar available rental properties may affect the rental rates the Company will receive on its properties. Based upon the current occupancy rates in Company and competitive properties, the Company believes there will not be significant competitive pressure to lower rental rates in the near future. - 2 - FINANCING STRATEGY The Company seeks to maintain a well-balanced, conservative and flexible capital structure by: (i) currently targeting a ratio of long-term debt to total market capitalization in the range of 25% to 40%; (ii) extending and sequencing the maturity dates of its debt; (iii) borrowing primarily at fixed rates; (iv) generally pursuing current and future long-term debt financings and refinancings on an unsecured basis; and (v) maintaining conservative debt service and fixed charge coverage ratios. Management believes that these strategies have enabled and should continue to enable the Company to access the debt and equity capital markets for their long-term requirements such as debt refinancings and financing development and acquisitions of additional rental properties. The Company has raised approximately $1.4 billion through public debt and equity offerings during the three years ended December 31, 1998. Based on these offerings, the Company has demonstrated its abilities to access the public markets as a source of capital to fund future growth. In addition, as discussed under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," the Company has a $450 million unsecured line of credit available for short-term fundings of development and acquisition of additional rental properties. The Company's debt to total market capitalization ratio (total market capitalization is defined as the total market value of all outstanding Common and Preferred Shares and units of limited partnership interest ("Units") in the Operating Partnership plus outstanding indebtedness) at December 31, 1998 was 27.75%. The Company's ratio of earnings to debt service and ratio of earnings to fixed charges for the year ended December 31, 1998 were 2.54x and 2.05x, respectively. In computing the ratio of earnings to debt service, earnings have been calculated by adding debt service to income before gains or losses on property sales and minority interest in earnings of the Operating Partnership. Debt service consists of interest expense and recurring principal amortization (excluding maturities) and excludes amortization of debt issuance costs. In computing the ratio of earnings to fixed charges, earnings have been calculated by adding fixed charges, excluding capitalized interest, to income before gains or losses on property sales and minority interest in earnings of the Operating Partnership. Fixed charges consist of interest costs, whether expensed or capitalized, the interest component of rental expense, amortization of debt issuance costs and preferred stock dividend requirements. Management believes these measures to be consistent with its financing strategy. MERGER WITH WEEKS CORPORATION On March 1, 1999, the Company announced that it entered into an Agreement and Plan of Merger, dated as of February 28, 1999 (the "Merger Agreement"), with Weeks Corporation ("Weeks"), pursuant to which Weeks will merge with and into the Company. Weeks is a self- administered, self-managed, geographically focused REIT that was organized in 1994. As of December 31, 1998, Weeks' in-service property portfolio consisted of 300 industrial properties, 34 suburban office properties and five retail properties comprising 28.1 million square feet. As of December 31, 1998, Weeks' primary markets and the concentration of Weeks' portfolio (based on square footage of in-service properties) were Atlanta, Georgia; Nashville, Tennessee; Miami, Florida; Raleigh-Durham-Chapel Hill (the "Research Triangle"), North Carolina; Dallas/Ft. Worth, Texas; Orlando, Florida; and Spartanburg, South Carolina. In addition, 31 industrial, suburban office and retail properties were under development, in lease-up or under agreement to acquire at December 31, 1998, comprising an additional 3.4 million square feet. At December 31, 1998, Weeks had approximately 19.7 million shares of common stock and six million shares of preferred stock outstanding, and approximately $654 million aggregate principal amount of outstanding indebtedness. In the merger, each outstanding share of common stock of Weeks will be converted into the right to receive 1.38 shares of common stock of the Company; each outstanding share of 8.0% Series A Cumulative Redeemable Preferred Stock of Weeks will be converted into the right to receive one depositary share of the Company representing 1/1000 of a share of 8.0% Series F Cumulative Redeemable - 3 - Preferred Stock of the Company; and each outstanding share of 8.625% Series D Cumulative Redeemable Preferred Stock of Weeks will be converted into the right to receive one depositary share of the Company representing 1/1000 of a share of 8.625% Series H Cumulative Redeemable Preferred Stock of the Company. The terms of the Company's depositary shares to be issued in the merger will be identical to the terms of the Weeks Series A and Series D preferred stock. Weeks' principal operating subsidiary, Weeks Realty, L.P. (the "Weeks Operating Partnership"), will be merged with and into the Operating Partnership. In the partnership merger, each outstanding common unit of Weeks Operating Partnership will be converted into the right to receive 1.38 common units of the Operating Partnership. At December 31, 1998, Weeks Operating Partnership had approximately 7.3 million units of limited partnership interest outstanding. The merger of Weeks into the Company is expected to qualify as a tax-free reorganization and will be accounted for under the purchase method of accounting. The transactions are expected to close in the second or third quarter of 1999, subject to receipt of necessary approvals by the Duke and Weeks shareholders and satisfaction of customary closing conditions. If the merger between the Company and Weeks is consummated as expected, the combined company will have significant operations and assets located in southeastern markets where the Company and its management have not traditionally operated or owned assets. Since substantially all of the members of Weeks' management are expected to remain with the combined company for the foreseeable future after the merger, the Company expects to have the necessary expertise to operate successfully in the new markets. The combined company's operating performance will, however, be exposed to the general economic conditions of its new markets and could be adversely affected if conditions, such as an oversupply of space or a reduction in demand for the types of properties supplied by the combined company, become unfavorable. OTHER The Company's operations are not dependent on a single or few customers as no single customer accounts for more than 2% of the Company's total revenue. The Company's operations are not subject to any significant seasonal fluctuations. The Company believes it is in compliance with environmental regulations and does not anticipate material effects of continued compliance. For additional information regarding the Company's investments and operations, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Item 8, "Financial Statements and Supplementary Data." For additional information about the Company's business segments, see Item 8, "Financial Statements and Supplementary Data." ITEM 2. PROPERTIES As of December 31, 1998, the Company owns an interest in a diversified portfolio of 493 commercial properties encompassing approximately 59.3 million net rentable square feet (including 40 properties and three expansions comprising 7.2 million square feet under development) located primarily in five states and approximately 1,750 acres of land for future development. The properties are described on the following pages. - 4 -
Net Year Land Rentable % Leased Name/ Ownership Company's Constd/ Area Area December Location Interest Ownership Expanded (Acres) (sq.ft.) 31, 1998 - ------------ --------- --------- --------- ------- -------- --------- IN-SERVICE - ----------- INDUSTRIAL - ---------- INDIANAPOLIS, INDIANA PARK 100 BUS. PARK Bldg. 48 Fee 50% [1] 1984 8.63 127,410 100% Bldg. 49 Fee 50% [1] 1982 4.55 89,600 100% Bldg. 50 Fee 50% [1] 1982 4.09 51,200 100% Bldg. 52 Fee 50% [1] 1983 2.70 34,800 100% Bldg. 53 Fee 50% [1] 1984 4.23 76,800 100% Bldg. 54 Fee 50% [1] 1984 4.42 76,800 33% Bldg. 55 Fee 50% [1] 1984 3.83 43,200 100% Bldg. 56 Fee 50% [1] 1984 15.94 300,000 100% Bldg. 57 Fee 50% [1] 1984 7.70 128,800 100% Bldg. 58 Fee 50% [1] 1984 8.03 128,800 100% Bldg. 59 Fee 50% [1] 1985 5.14 83,200 100% Bldg. 60 Fee 50% [1] 1985 4.78 83,200 85% Bldg. 62 Fee 50% [1] 1986 7.70 128,800 100% Bldg. 67 Fee 50% [1] 1987 4.23 72,350 100% Bldg. 68 Fee 50% [1] 1987 4.23 72,360 82% Bldg. 71 Fee 50% [1] 1987 9.06 193,400 100% Bldg. 74 Fee 10%-50% [2] 1988 12.41 257,400 100% Bldg. 76 Fee 10%-50% [2] 1988 5.10 81,695 100% Bldg. 78 Fee 10%-50% [2] 1988 21.80 512,777 100% Bldg. 79 Fee 100% 1988 4.47 66,000 100% Bldg. 80 Fee 100% 1988 4.47 66,000 100% Bldg. 83 Fee 100% 1989 5.34 96,000 97% Bldg. 84 Fee 100% 1989 5.34 96,000 73% Bldg. 85 Fee 10%-50% [2] 1989 9.70 180,100 100% Bldg. 89 Fee 10%-50% [2] 1990 11.28 311,600 100% Bldg. 91 Fee 10%-50% [2] 1990/1996 7.53 196,800 100% Bldg. 92 Fee 10%-50% [2] 1991 4.38 45,917 100% Bldg. 95 Fee 100% 1993 15.23 336,000 100% Bldg. 96 Fee 100% 1994/1997 27.69 737,850 100% Bldg. 97 Fee 100% 1994 13.38 280,800 80% Bldg. 98 Fee 100% 1968/1995 37.34 508,306 78% Bldg. 99 Fee 50% [3] 1994 18.00 364,800 100% Bldg. 100 Fee 100% 1995 7.00 117,500 100% Bldg. 101 Fee 50% [1] 1983 4.37 45,000 64% Bldg. 105 Fee 50% [1] 1983 4.64 41,400 100% Bldg. 106 Fee 50% [1] 1978 4.64 41,400 100% Bldg. 107 Fee 100% 1984 3.56 58,783 94% Bldg. 108 Fee 50% [1] 1983 6.36 60,300 85% Bldg. 109 Fee 100% 1985 4.80 46,000 82% Bldg. 113 Fee 50% [1] 1987 6.20 72,000 90% Bldg. 114 Fee 50% [1] 1987 6.20 56,700 97% Bldg. 117 Fee 10%-50% [2] 1988 13.36 135,600 98% Bldg. 120 Fee 10%-50% [2] 1989 4.54 54,982 86% Bldg. 122 Fee 100% 1990 6.17 73,274 100% Bldg. 125 Fee 100% 1994/1996 13.81 195,080 100% Bldg. 126 Fee 100% 1984 4.04 60,100 86% Bldg. 127 Fee 100% 1995 6.50 93,600 100% Bldg. 128 Fee 100% 1996 14.40 322,000 100% Bldg. 129 Fee 100% 1996 16.00 320,000 100% Bldg. 130 Fee 100% 1996 9.70 152,000 92% Bldg. 131 Fee 100% 1997 21.00 415,680 100% Bldg. 133 Fee 100% 1997 1.30 20,530 100% Bldg. 134 Fee 100% 1998 8.70 110,400 100% Georgetown Ctr. Bldg. 1 Fee 100% 1987 5.85 111,883 100% Georgetown Ctr. Bldg. 2 Fee 100% 1987 5.81 72,120 100% Georgetown Ctr. Bldg. 3 Fee 100% 1987 5.10 45,896 100% - 5 - PARK FLETCHER Bldg. 2 Fee 50% [1] 1970 1.31 20,160 100% Bldg. 4 Fee 50% [1] 1974 1.73 23,000 0% Bldg. 6 Fee 50% [1] 1971 3.13 36,180 80% Bldg. 7 Fee 50% [1] 1974 3.00 41,900 100% Bldg. 8 Fee 50% [1] 1974 2.11 18,000 100% Bldg. 14 Fee 100% 1978 1.39 19,480 100% Bldg. 15 Fee 50% [1] 1979 5.74 72,800 100% Bldg. 16 Fee 50% [1] 1979 3.17 35,200 84% Bldg. 18 Fee 50% [1] 1980 5.52 43,950 96% Bldg. 21 Fee 50% [1] 1983 2.95 37,224 100% Bldg. 22 Fee 50% [1] 1983 2.96 48,635 58% Bldg. 26 Fee 50% [1] 1983 2.91 28,340 89% Bldg. 27 Fee 25% [1] 1985 3.01 39,178 100% Bldg. 28 Fee 25% [1] 1985 7.22 93,880 100% Bldg. 29 Fee 50% [1] 1987 7.16 92,044 100% Bldg. 30 Fee 50% [1] 1989 5.93 78,568 100% Bldg. 31 Fee 50% [1] 1990 2.62 33,029 100% Bldg. 32 Fee 50% [1] 1990 5.43 67,297 100% Bldg. 33 Fee 50% [1] 1997 7.50 112,710 100% Bldg. 34 Fee 50% [1] 1997 13.00 230,400 100% Bldg. 35 Fee 50% [1] 1998 8.10 96,427 100% Bldg. 36 Fee 50% [1] 1998 3.90 52,800 68% Bldg. 37 Fee 50% [1] 1998 1.90 14,850 100% SHADELAND STATION 7420-86 Shadeland Fee 100% 1984 4.09 48,600 100% HUNTER CREEK BUS.PARK Bldg. 1 Fee 10%-50% [2] 1989 5.97 86,500 77% Bldg. 2 Fee 10%-50% [2] 1989 8.86 202,560 56% HILLSDALE TECHNECTR. Bldg. 1 Fee 50% [1] 1986 9.16 73,866 76% Bldg. 2 Fee 50% [1] 1986 5.50 83,600 100% Bldg. 3 Fee 50% [1] 1987 5.50 84,050 69% Bldg. 4 Fee 100% 1987 7.85 73,874 100% Bldg. 5 Fee 100% 1987 5.44 67,500 99% Bldg. 6 Fee 100% 1987 4.25 64,000 100% Franklin Road 1962,1971, Bus. Ctr. Fee 100% 1974,1998 [4] 28.00 488,925 95% Palomar Bus. Ctr. Fee 100% 1973 4.50 99,350 100% Nampac Bldg. Fee 100% 1974 6.20 87,064 100% NORTH AIRPORT PARK Thomson Consumer Electronics Fee 50% [1] 1996/1998 64.02 1,339,195 100% Bldg. 2 Fee 100% 1997 22.50 377,280 100% 6060 Guion Rd. Fee 100% 1968/1974/1977 14.05 182,311 100% 4750 Kentucky Ave. Fee 100% 1974 11.01 125,000 100% 4316 W. Minnesota Fee 100% 1970 10.40 121,250 100% CARMEL, INDIANA HAMILTON CROSSING Bldg. 1 Fee 100% 1989 4.70 51,825 100% GREENWOOD, INDIANA SOUTH PARK BUS. CTR. Bldg. 2 Fee 100% 1990 7.10 86,806 86% - 6 - LEBANON, INDIANA LEBANON BUS. PARK American Air Filter Fee 100% 1996 10.40 153,600 100% Little, Brown & Co. Fee 50% [1] 1996 31.60 500,455 100% Purity Wholesale Fee 100% 1997 32.60 556,248 100% Pamida Fee 100% 1997 14.90 200,000 100% Prentice Hall Fee 100% 1998 38.90 576,040 100% Lebanon (Gen. Cable) Fee 100% 1998 23.30 395,472 100% CINCINNATI, OHIO PARK 50 TECHNECTR. Bldg. 20 Fee 100% 1987 8.37 96,000 94% Bldg. 25 Fee 100% 1989 12.20 78,328 90% GOVERNOR'S POINTE 4700 Bldg. Fee 100% 1987 5.51 76,400 91% 4800 Bldg. Fee 100% 1989 7.07 80,000 100% 4900 Bldg. Fee 100% 1987 9.41 79,034 98% WORLD PARK Bldg. 5 Fee 100% 1987 5.00 59,700 93% Bldg. 6 Fee 100% 1987 7.26 92,400 100% Bldg. 7 Fee 100% 1987 8.63 96,000 100% Bldg. 8 Fee 100% 1989 14.60 192,000 100% Bldg. 9 Fee 100% 1989 4.47 58,800 100% Bldg. 11 Fee 100% 1989 8.98 96,000 100% Bldg. 14 Fee 100% 1989 8.91 166,400 100% Bldg. 15 Fee 100% 1990 6.50 93,600 100% Bldg. 16 Fee 100% 1989 7.00 93,600 100% MicroAge Fee 50% [1] 1994 15.10 304,000 100% Bldg. 18 Fee 100% 1997 16.90 252,000 100% Bldg. 28 Fee 100% 1998 11.60 220,160 100% Bldg. 29 Fee 100% 1998 21.40 452,000 100% Bldg. 31 Fee 100% 1998 7.10 122,120 100% Union Ctr.Bldg. 1 Fee 100% 1998 4.00 59,400 35% ENTERPRISE BUS. PARK Bldg. 1 Fee 100% 1990 7.52 87,400 100% Bldg. 2 Fee 100% 1990 7.52 84,940 100% Bldg. A Fee 100% 1987 2.65 20,888 77% Bldg. B Fee 100% 1988 2.65 34,940 54% Bldg. D Fee 100% 1989 5.40 60,322 93% FAIRFIELD BUS. CTR. Bldg. D Fee 100% 1990 3.23 40,223 100% Bldg. E Fee 100% 1990 6.07 75,600 100% KENTUCKY DRIVE 7910 Kentucky Dr. Fee 100% 1980 3.78 38,329 100% 7920 Kentucky Dr. Fee 100% 1974 9.33 93,945 64% OTHER INDUSTRIAL - -CINCINNATI U.S.Post Office Bldg. Fee 40% [5] 1992 2.60 57,886 100% University Moving Fee 100% 1991 4.95 70,000 100% Creek Rd.Bldg. I Fee 100% 1971 2.05 38,715 100% Creek Rd.Bldg. II Fee 100% 1971 2.63 53,210 100% Cornell Commerce Ctr. Fee 100% 1989 9.91 167,695 90% Mosteller Dist. Ctr. Fee 100% 1957/1996 25.80 357,796 100% Mosteller Dist. Ctr. II Fee 100% 1997 12.20 261,440 79% Perimeter Park Bldg. A Fee 100% 1991 2.92 28,100 100% Perimeter Park Bldg. B Fee 100% 1991 3.84 30,000 80% - 7 - COLUMBUS, OHIO Pet Foods Bldg. Fee 100% 1993/1995 16.22 276,000 100% 3800 Zane Trace Dr. (MBM) Fee 100% 1978 3.98 83,167 100% 6600 Port Road Fee 100% 1995/1998 45.42 1,025,743 100% 3635 Zane Trace Dr. Fee 100% 1980 5.24 98,822 49% Groveport Comm. Ctr. #1 Fee 50% [6] 1998 17.78 354,750 64% SOUTH POINTE BUS. CTR. South Pointe A Fee 50% [1] 1995 14.06 293,824 100% South Pointe B Fee 50% [1] 1996 13.16 307,200 100% South Pointe C Fee 50% [1] 1996 12.57 322,000 100% South Pointe D Fee 100% 1997 6.55 116,520 89% South Pointe E Fee 100% 1997 6.55 82,520 71% 2190-2200 Westbelt Dr. Fee 100% 1986 6.12 95,516 100% HEBRON, KENTUCKY SOUTHPARK BUS.CTR. Bldg. 1 Fee 100% 1990 7.90 96,000 100% Bldg. 3 Fee 100% 1991 10.79 192,000 100% CR Service Fee 100% 1994 22.50 253,664 100% Redken Labs Fee 100% 1994 28.79 166,400 100% Skyport Bldg. I Fee 100% 1997 15.10 316,800 100% LOUISVILLE, KENTUCKY Dayco Fee 50% [1] 1995 30.00 282,539 100% FLORENCE, KENTUCKY Empire Comm. Ctr. Fee 100% 1973/1980 11.62 148,445 100% CHICAGO, ILLINOIS Kirk Road Bldg. Fee 100% 1990 3.50 62,400 100% Abbot Bldg. Fee 100% 1989 2.15 43,930 100% Janice Ave.Bldg. Fee 100% 1956 2.00 40,250 100% Wolf Road Bldg. Fee 100% 1966/69 2.70 60,922 100% Touhy Ave.Bldg. Fee 100% 1971 5.48 120,000 100% Jarvis Ave.Bldg. Fee 100% 1969 5.35 111,728 100% Laurel Dr.Bldg. Fee 100% 1981 1.12 19,570 100% Crossroads Bldg. I Fee 100% 1998 11.34 289,920 44% Ballard Dr.Bldg. Fee 100% 1985 3.33 54,274 100% Oakmont Tech Ctr. Fee 100% 1989 6.30 111,659 100% DECATUR, ILLINOIS PARK 101 BUS. CTR. Bldg. 3 Fee 100% 1979 5.76 75,600 91% Bldg. 8 Fee 100% 1980 3.16 50,400 100% NASHVILLE, TENNESSEE HAYWOOD OAKS TECHNECTR. Bldg. 2 Fee 100% 1988 2.94 50,400 71% Bldg. 3 Fee 100% 1988 2.94 52,800 79% Bldg. 4 Fee 100% 1988 5.23 46,800 100% Bldg. 5 Fee 100% 1988 5.23 61,171 100% Bldg. 6 Fee 100% 1989 10.53 113,400 71% Bldg. 7 Fee 100% 1995 8.24 66,873 100% Bldg. 8 Fee 100% 1997 15.44 71,615 100% Greenbriar Bus. Park Fee 100% 1986 10.73 134,759 100% Keebler Bldg. Fee 100% 1985 4.39 36,150 100% MILWAUKEE, WISCONSIN S.F. Music Box Bldg. Fee 33.33% [7] 1993 8.90 153,600 100% - 8 - ST. LOUIS, MISSOURI I-70 Ctr. Fee 100% 1986 4.57 76,240 90% 1920 Beltway Fee 100% 1986 4.44 70,000 100% Alfa Laval Fee 100% 1996 12.76 129,500 100% Westport Ctr. I Fee 100% 1998 11.90 177,600 97% Westport Ctr. II Fee 100% 1998 5.25 51,053 100% St. Louis Bus.Ctr A Fee 100% 1987 2.49 47,876 100% St. Louis Bus.Ctr B Fee 100% 1986 3.14 56,514 98% St. Louis Bus.Ctr C Fee 100% 1986 2.10 38,034 93% St. Louis Bus.Ctr D Fee 100% 1987 1.81 34,004 76% Craig Park Ctr. Fee 100% 1984 3.19 42,210 93% EARTH CITY Dukeport I Fee 50% [1] 1996 21.24 403,200 100% Dukeport II Fee 50% [1] 1997 14.70 244,800 100% Dukeport III Fee 100% 1998 9.50 214,400 100% Dukeport V Fee 100% 1998 6.00 96,000 29% Horizon Bus.Ctr. Fee 100% 1985 5.31 75,746 100% Warson Comm. Ctr. Fee 100% 1987/1988/1997 8.83 122,886 95% RIVERPORT Express Scripts Srv.Ctr. Fee 100% 1992 10.81 119,000 100% Riverport Dist.A Fee 100% 1990 5.96 100,000 100% Riverport Dist.B Fee 100% 1989 3.36 45,200 100% Southport I Fee 100% 1977 1.36 20,810 100% Southport II Fee 100% 1978 1.53 22,400 100% Southport Comm.Ctr. Fee 100% 1978 2.65 34,873 100% CLEVELAND, OHIO Johnson Controls Fee 100% 1972 14.56 85,410 100% Dyment Fee 100% 1988 12.00 246,140 100% Mr. Coffee Fee 50% [1] 1997 35.00 458,000 100% Fountain Pkwy.Bldg.I Fee 100% 1998 6.50 108,704 100% Strongsville Bldg. B Fee 100% 1998 4.50 67,540 100% Enterprise Pky. Fee 100% 1974/1995 7.40 65,810 13% Park 82 Bldg. 2 Fee 100% 1998 7.10 105,600 51% SOLON INDUSTRIAL PARK 30600 Carter Fee 100% 1971 11.30 190,188 100% 6230 Cochran Fee 100% 1977 7.20 100,365 50% 31900 Solon-Front Fee 100% 1974 8.30 85,000 100% 5821 Solon Fee 100% 1970 5.80 66,638 78% 6161 Cochran Fee 100% 1978 6.10 62,400 85% 5901 Harper Fee 100% 1970 4.10 55,408 100% 29125 Solon Fee 100% 1980 5.90 47,329 100% 6661 Cochran Fee 100% 1979 4.70 39,000 87% 6521 Davis Fee 100% 1979 3.20 21,600 100% 31900 Solon-Rear Fee 100% 1982 5.30 7,193 100% ST. PAUL, MINNESOTA University Crsg. Fee 100% 1990 5.65 83,291 100% MINNEAPOLIS, MINNESOTA Enterprise Indust. Ctr. Fee 100% 1979 10.88 165,755 100% Apollo Dist.Ctr. Fee 100% 1997 11.05 168,480 100% Sibley Indust. Ctr. I Fee 100% 1973 2.88 54,612 100% Sibley Indust. Ctr. II Fee 100% 1972 2.58 37,800 0% Sibley Indust. Ctr. III Fee 100% 1968 4.10 32,810 100% Yankee Place Fee 100% 1986 19.03 221,075 100% Larc Indust. Park I Fee 100% 1977 4.59 67,200 94% Larc Indust. Park II Fee 100% 1976 3.70 54,000 99% Larc Indust. Park III Fee 100% 1980 2.38 30,800 100% Larc Indust. Park IV Fee 100% 1980 1.06 13,800 100% Larc Indust. Park V Fee 100% 1980 1.54 22,880 100% - 9 - Larc Indust. Park VI Fee 100% 1975 3.91 63,600 100% Larc Indust. Park VII Fee 100% 1973 2.65 41,088 100% Hampshire Dist. Ctr. N. Fee 100% 1979 9.26 159,200 100% Hampshire Dist. Ctr. S. Fee 100% 1979 9.40 157,000 84% Hampshire Tech Ctr. Fee 100% 1998 14.22 142,526 100% Penn Corp.Bldg. Fee 100% 1977 2.08 40,844 100% Bloomington Indust.Fee 100% 1963 7.40 100,852 29% Edina Interchange I Fee 100% 1995 4.73 73,809 100% Edina Interchange II Fee 100% 1980 3.46 55,006 100% Edina Interchange III Fee 100% 1981 6.39 62,784 100% Edina Interchange IV Fee 100% 1974 1.99 22,440 100% Edina Interchange V Fee 100% 1974 4.92 139,101 100% Edina Interchange VI Fee 100% 1967 4.74 72,300 100% Edina Interchange VII Fee 100% 1970 2.36 30,654 100% Pakwa Bus.Park I Fee 100% 1979 1.67 38,196 100% Pakwa Bus.Park II Fee 100% 1979 1.67 21,254 100% Pakwa Bus.Park III Fee 100% 1979 1.67 19,978 81% Cahill Bus.Ctr. Fee 100% 1980 3.90 60,082 100% Encore Park Fee 100% 1977 14.50 126,858 100% Johnson Bldg. Fee 100% 1974 2.09 62,718 96% Cornerstone Bus. Ctr. Fee 100% 1996 13.49 222,494 100% Westside Bus. Pk. Fee 100% 1987 9.10 114,800 100% Oxford Industrial Fee 100% 1971 1.23 16,736 100% Cedar Lake Bus.Ctr. Fee 100% 1976 3.05 50,400 100% Medicine Lake Industrial Fee 100% 1970 16.37 222,893 100% 801 Zane Ave.N. Fee 100% 1989 4.93 84,219 100% Decatur Bus.Ctr. Fee 100% 1982 3.96 44,279 100% Sandburg Indust.Ctr. Fee 100% 1973 5.68 94,612 100% Crystal Indust.Ctr. Fee 100% 1974 3.23 72,000 95% Bass Lake Bus. Ctr. Fee 100% 1981 5.33 47,368 100% Cliff Rd. Indust.Ctr. Fee 100% 1972 3.31 49,821 97% Professional Plaza IV Fee 100% 1980 2.79 37,528 95% Professional Plaza III Fee 100% 1985 2.24 35,987 89% Professional Plaza II Fee 100% 1984 2.41 35,619 90% Lyndale Commons I Fee 100% 1981 2.60 43,770 55% Lyndale Commons II Fee 100% 1985 2.51 34,816 85% Novartis Warehouse Fee 100% 1960 14.40 355,798 100% Golden Hills I Fee 100% 1996 7.50 91,368 100% Golden Triangle Tech Ctr. Fee 100% 1997 11.10 90,771 100% Trapp Road I Fee 100% 1996 6.50 96,800 100% Broadway Bus. Ctr. III Fee 100% 1983 2.77 21,600 100% Broadway Bus. Ctr. IV Fee 100% 1983 2.77 30,000 100% Broadway Bus. Ctr. V Fee 100% 1983 1.44 24,795 100% Broadway Bus. Ctr. VI Fee 100% 1983 2.77 66,961 100% Broadway Bus. Ctr. VII Fee 100% 1983 2.78 36,000 100% Chanhassen I Fee 100% 1983 5.40 48,573 100% Chanhassen II Fee 100% 1986 6.36 56,731 100% Trapp Road Bldg. 2 Fee 100% 1998 11.86 180,480 100% 7300 Northland Dr. Fee 100% 1980 8.48 152,480 100% Eagandale Tech Ctr. Fee 100% 1998 7.61 76,520 85% Plymouth Tech Ctr. Fee 100% 1986 3.77 52,487 100% Eagandale Crossings Fee 100% 1998 6.60 80,104 75% OFFICE - ------ INDIANAPOLIS, INDIANA PARK 100 BUS. PARK Bldg. 34 Fee 100% 1979 2.00 22,272 94% Bldg. 116 Fee 100% 1988 5.28 35,700 100% Bldg. 118 Fee 100% 1988 6.50 35,700 85% Bldg. 119 Fee 100% 1989 6.50 53,300 100% CopyRite Bldg. Fee 50% [3] 1992 3.88 48,000 100% Bldg. 132 Fee 100% 1997 4.40 27,600 100% Woodland Corp. Ctr. One Fee 100% 1998 6.00 77,186 100% - 10 - WOODFIELD AT THE CROSSING 8440 Woodfield Fee 100% 1987 7.50 117,818 95% 8425 Woodfield Fee 100% 1989 13.30 259,777 94% PARKWOOD CROSSING One Parkwood Fee 100% 1989 5.93 108,281 100% Two Parkwood Fee 100% 1996 5.96 93,950 100% Three Parkwood Fee 100% 1997 6.24 122,712 100% Four Parkwood Fee 100% 1998 5.90 133,086 99% SHADELAND STATION 7240 Shadeland Station Fee 66.67% [8] 1985 2.14 45,585 95% 7330 Shadeland Station Fee 100% 1988 4.50 42,619 100% 7340 Shadeland Station Fee 100% 1989 2.50 33,078 100% 7351 Shadeland Station Fee 100% 1983 2.14 27,740 79% 7369 Shadeland Station Fee 100% 1989 2.20 15,551 100% 7400 Shadeland Station Fee 100% 1990 2.80 49,544 78% KEYSTONE AT THE CROSSING F.C. Tucker Fee/Grnd. Bldg. Lease [9] 100% 1978 4.70 4,840 100% 3520 Commerce Ground/Bldg. Crossing Lease [10] 100% 1976 2.69 30,900 67% 8465 Keystone Fee 100% 1983 1.31 28,298 80% 8555 Keystone Fee/Grnd. Lease [11] 100% 1985 5.42 75,545 91% Community MOB Fee 100% 1995 4.00 39,205 100% One North Capitol [12] 100% 1980 0.34 161,984 92% HAMILTON CROSSING Hamilton Crossing Bldg. 2 Fee 100% 1997 5.10 32,800 77% RIVER ROAD Software Artistry Fee 100% 1998 6.90 108,273 100% GREENWOOD, INDIANA SOUTH PARK BUS.CTR. Bldg. 1 Fee 100% 1989 5.40 39,715 84% Bldg. 3 Fee 100% 1990 3.25 36,082 86% St. Francis Fee/Grnd. Medical Bldg. Lease [13] 100% 1995 N/A 95,579 95% CINCINNATI, OHIO GOVERNOR'S HILL 8600 Governor's Hill Fee 100% 1986 10.79 200,584 99% 8700 Governor's Hill Fee 100% 1985 4.98 58,617 100% 8790 Governor's Hill Fee 100% 1985 5.00 58,177 99% 8800 Governor's Hill Fee 100% 1985 2.13 28,700 100% GOVERNOR'S POINTE 4605 Governor's Pointe Fee 100% 1990 8.00 178,306 100% 4705 Governor's Pointe Fee 100% 1988 7.50 140,984 100% 4770 Governor's Pointe Fee 100% 1986 4.50 76,037 99% Anthem Prescription Mgmt. Fee 100% 1997 5.00 78,240 100% 4660 Governor's Pointe Fee 100% 1997 4.65 76,465 100% 4680 Governor's Pointe Fee 100% 1998 9.80 126,102 73% PARK 50 TECHNECTR. SDRC Bldg. Fee 100% 1991 13.00 221,215 100% Bldg. 17 Fee 100% 1985 8.19 70,644 99% DOWNTOWN CINCINNATI 311 Elm St. Grnd/Bldg. 1902/ Lease [14] 100% 1986 [15] 0.69 90,127 100% 312 Plum Street Fee 100% 1987 0.69 230,489 98% 312 Elm Street Fee 100% 1992 1.10 378,786 96% - 11 - KENWOOD Kenwood Commons Bldg. I Fee 50% [16] 1986 2.09 46,145 100% Kenwood Commons Bldg. II Fee 50% [16] 1986 2.09 46,434 99% Ohio National Fee 100% 1996 9.00 212,125 98% Kenwood Executive Ctr. Fee 100% 1981 3.46 49,984 100% TRI-COUNTY Triangle 1965/ Office Park Fee 100% 1985 [17] 15.64 172,650 92% Tri-County 1971,1973, Office Park Fee 100% 1982 [18] 11.27 102,166 80% Executive Plaza I Fee 100% 1980 5.83 87,912 100% Executive Plaza II Fee 100% 1981 5.02 88,885 100% Executive Plaza III Fee 100% 1998 5.60 90,073 32% BLUE ASH West Lake Ctr. Fee 100% 1981 11.76 179,850 96% Lake Forest Pl. Fee 100% 1985 13.50 217,264 99% Huntington Bank Bldg. Fee 100% 1986 0.94 3,235 100% Blue Ash Office Ctr. VI Fee 100% 1989 2.96 36,138 100% Pfeiffer Woods Fee 50% [6] 1998 11.30 112,657 100% OTHER OFFICE-CINCINNATI Fidelity Drive Bldg. Fee 100% 1972 8.34 38,000 100% Franciscan Fee/Grnd. Health Lease[19] 100% 1996 N/A 36,634 100% One Ashview Place Fee 100% 1989 6.88 120,853 100% Remington Park Bldg. A Fee 100% 1982 3.20 38,236 100% Remington Park Bldg. B Fee 100% 1982 3.20 38,320 99% COLUMBUS, OHIO TUTTLE CROSSING 4600 Lakehurst (Sterling 1) Fee 100% 1990 7.66 106,300 100% 4650 Lakehurst Fee 100% 1990 13.00 164,639 100% 5555 Park Ctr. Fee 100% 1992 6.09 83,971 100% 4700 Lakehurst Fee 100% 1994 3.86 49,600 82% Sterling 2 Fee 100% 1995 3.33 57,660 100% John Alden Fee 100% 1995 6.51 101,112 100% Cardinal Health Fee 100% 1995 10.95 132,854 100% Nationwide Fee 100% 1996 17.90 315,102 100% Sterling 3 Fee 100% 1996 3.56 64,500 100% Parkwood Place Fee 100% 1997 9.08 156,000 100% MetroCtr. III Fee 100% 1983 5.91 73,757 100% Veterans Admin. Clinic Fee 100% 1994 4.98 118,000 100% Scioto Corp.Ctr. Fee 100% 1987 7.58 57,251 100% CompManagement Fee 100% 1997 5.60 68,700 100% Atrium II Phase I Fee 100% 1998 11.04 145,000 100% Sterling 4 Fee 100% 1998 3.10 94,219 100% Emerald II Fee 100% 1998 3.21 45,214 90% Two Easton Oval Fee 100% 1996 7.66 128,707 98% Express Med Fee 50% [6] 1998 8.81 103,606 100% CLEVELAND, OHIO Rock Run - N. Fee 100% 1984 5.00 62,565 91% Rock Run - Ctr. Fee 100% 1985 5.00 61,099 67% Rock Run - S. Fee 100% 1986 5.00 62,989 97% Freedom Square I Fee 100% 1980 2.59 40,208 73% Freedom Square II Fee 100% 1987 7.41 116,665 96% Corporate Plaza I Fee 100% 1989 6.10 114,028 100% Corporate Plaza II Fee 100% 1991 4.90 103,834 88% One Corporate Exchange Fee 100% 1989 5.30 88,376 93% Corporate Ctr. I Fee 100% 1985 5.33 99,260 93% Corporate Ctr. II Fee 100% 1987 5.32 104,402 85% Corporate Place Fee 100% 1988 4.50 84,768 100% - 12 - Corporate Circle Fee 100% 1983 6.65 120,444 98% Freedom Sq. III Fee 100% 1997 2.00 71,025 100% 6111 Oak Tree Fee 100% 1979/1995 5.00 70,906 97% Landerbrook Fee 100% 1997 8.00 112,886 96% Park Ctr. Bldg. 1 Fee 100% 1998 6.68 133,550 70% Landerbrook Phase II Fee 100% 1998 5.74 103,300 46% ST. LOUIS, MISSOURI Laumeier I Fee 100% 1987 4.26 113,852 100% Laumeier II Fee 100% 1988 4.64 112,477 100% Laumeier IV Fee 100% 1987 2.24 62,842 100% Westview Place Fee 100% 1988 2.69 119,585 99% Westmark Fee 100% 1987 6.95 123,889 100% MCI Fee 100% 1998 11.90 96,495 100% EARTH CITY 3300 Pointe 70 [12] 100% 1989 6.61 103,549 100% 3322 NGIC [12] 100% 1987 6.61 112,000 100% Riverport Tower Fee 100% 1991 22.03 317,891 100% MARYVILLE CTR. 500 Maryville Ctr. Fee 100% 1984 9.27 165,544 97% 530 Maryville Ctr. Fee 100% 1990 5.31 107,957 100% 550 Maryville Ctr. Fee 100% 1988 4.55 97,109 96% 635 Maryville Ctr. Fee 100% 1987 8.78 148,307 100% 655 Maryville Ctr. Fee 100% 1994 6.26 90,499 100% 540 Maryville Ctr. Fee 100% 1990 5.23 107,973 100% Twin Oaks Fee 100% 1995 5.91 85,066 100% 625 Maryville Ctr. Fee 50% [6] 1994 6.26 101,576 100% CHICAGO, ILLINOIS Central Park of Lisle Fee 50% [6] 1990 8.88 345,200 100% Executive Towers I Fee 100% 1983 6.33 203,302 99% Executive Towers II Fee 100% 1984 6.33 224,140 100% Executive Towers III Fee 100% 1987 6.33 222,400 78% Atrium II Fee 100% 1986 6.55 100,952 100% One Conway Park Fee 100% 1989 15.85 102,979 95% Yorktown Off. Ctr. Fee 100% 1979/1980/1981 7.52 98,619 99% Oakmont Circle Office Fee 100% 1990 6.90 117,738 81% MINNEAPOLIS, MINNESOTA 10801 Red Cir.Dr. Fee 100% 1977 4.00 60,078 100% Medicine Lake Prof. Bldg. Fee 100% 1970 1.54 8,100 100% 1601 E. Highway 13 Fee 100% 1986 2.80 38,652 98% 5219 Bldg. Fee 100% 1965 0.73 9,141 90% Edina Realty Fee 100% 1965 1.93 24,080 100% Norman Ctr. I Fee 100% 1969 4.27 47,345 0% [20] Norman Ctr. II Fee 100% 1970 6.23 69,077 90% Norman Ctr. III Fee 100% 1971 1.60 17,713 100% Norman Ctr. IV Fee 100% 1967 4.27 45,332 100% North Plaza Fee 100% 1966 2.26 28,141 100% North Star Title Fee 100% 1965 3.41 42,479 100% South Plaza Fee 100% 1966 2.68 33,370 97% Tyrol West Fee 100% 1968 2.98 37,098 91% Travelers Express Tower Fee 30% [21] 1987 5.40 237,643 99% NASHVILLE, TENNESSEE CREEKSIDE CROSSING One Creekside Crossing Fee 100% 1998 5.35 116,390 53% - 13 - One Lakeview Place Fee 100% 1986 6.85 114,972 97% Two Lakeview Place Fee 100% 1988 6.06 114,521 100% RETAIL - ------ INDIANAPOLIS, INDIANA PARK 100 BUS. PARK Bldg. 121 Fee 100% 1989 2.27 19,716 70% CASTLETON CORNER Michael's Plaza Fee 100% 1984 4.50 46,374 100% Cub Plaza Fee 100% 1986 6.83 60,136 92% FORT WAYNE, INDIANA Coldwater Crossing Fee 100% 1990 35.38 246,365 98% GREENWOOD, INDIANA GREENWOOD CORNER First Indiana Bank Branch Fee 100% 1988 1.00 2,400 100% Greenwood Corner Shoppes Fee 100% 1986 7.45 50,840 89% DAYTON, OHIO Sugarcreek Plaza Fee 100% 1988 17.46 77,940 93% CINCINNATI, OHIO Governor's Plaza Fee 100% 1990 35.00 181,493 98% King's Mall Shpg.Ctr.I Fee 100% 1990 5.68 52,661 100% King's Mall Shpg.Ctr.II Fee 100% 1988 8.90 67,725 99% Montgomery Crsg. Phase I Fee 100% 1993 1.90 21,008 100% Kohl's Fee 100% 1994 12.00 80,684 100% Sports Unlimited Fee 100% 1994 7.00 67,148 100% Eastgate Square Fee 100% 1990/1996 11.60 94,182 100% Office Max Fee 100% 1995 2.25 23,484 100% Sofa Express- Governor's Plaza Fee 100% 1995 1.13 15,000 100% Bigg's SuperCtr. Fee 100% 1996 14.00 198,940 100% Fountain Place Fee 14% [22] 1997 1.98 207,170 100% Tri-County Mktpl. Fee 100% 1998 10.36 74,174 100% Western Hills Mktpl. Fee 100% 1998 10.50 148,140 85% Galyans Trading Co. Fee 100% 1984 4.90 74,636 100% Tuttle Retail Ctr. Fee 100% 1995/1996 13.44 144,340 86% GOVERNOR'S POINTE Lowe's Fee 100% 1997 15.00 135,147 99% FLORENCE, KENTUCKY Sofa Express Fee 100% 1997 1.78 20,250 100% BLOOMINGTON, ILLINOIS Lakewood Plaza Fee 100% 1987 11.23 87,010 98% CHAMPAIGN, ILLINOIS Market View Fee 100% 1985 8.50 86,553 84% -------- ---------- Total In Service 3,395.90 52,028,032 -------- ---------- - 14 - UNDER CONSTRUCTION - ------------------- Net Expected Land Rentable % Leased Name/ Ownership Company's In-Service Area Area December Location Interest Ownership Date (Acres) (Sq.Ft.) 31, 1998 - ------------ --------- --------- ---------- ------- --------- -------- INDUSTRIAL - ---------- INDIANAPOLIS, INDIANA PARK 100 BUS. PARK Bldg. 136 Fee 100% Jan-99 10.50 152,000 58% PARK FLETCHER BUS. PARK Bldg. 38 Fee 50% [1] Apr-99 13.70 252,840 0% Bldg. 39 Fee 50% [1] May-99 5.40 91,200 0% Bldg. 40 Fee 50% [1] Jun-99 5.40 89,600 0% LEBANON BUS. PARK Lebanon Bldg 9 (Little Brown) Fee 100% Mar-99 26.80 397,320 100% EXIT 5 BUS.PARK Deflecto Corp. Fee/Grnd. Lease [23] 100% May-99 9.00 134,400 100% CINCINNATI, OHIO WORLD PARK Union Ctr. Bldg. 2 Fee 100% Jan-99 3.82 64,800 29% Union Ctr. Bldg. 3 Fee 100% Jan-99 15.00 321,200 59% Union Ctr. Bldg. 6 Fee 100% Jun-99 16.25 321,464 100% Skyport Bldg. 2 Fee 100% Feb-99 20.00 453,600 0% COLUMBUS, OHIO General Motors BTS Fee 100% Oct-99 27.54 504,000 100% CLEVELAND, OHIO Pioneer Standard Fee 100% Jan-99 12.90 224,600 100% ST. LOUIS, MISSOURI Dukeport 6 Fee 100% Mar-99 16.64 320,000 87% Westport Ctr. III Fee 100% Jan-99 8.70 91,000 23% Riverport I Fee 100% Apr-99 6.64 72,000 0% MINNEAPOLIS, MINNESOTA Silverbell Commons Fee 100% May-99 16.62 234,900 0% 7300 Northland Exp.Fee 100% Jun-99 2.50 33,020 100% CHICAGO, ILLINOIS CROSSROADS BUS. PARK Crossroads Bldg 2 Fee 100% Jun-99 23.50 460,800 0% NASHVILLE Metropolitan Airport Ctr. Fee 100% Apr-99 6.37 80,675 0% OFFICE - ------ INDIANAPOLIS, INDIANA PARKWOOD CROSSING Five Parkwood Fee 100% Jul-99 3.37 133,758 2% Woodland Corp. Ctr. II Fee 100% Jul-99 5.25 60,000 70% HAMILTON CROSSING Hamilton Crossing Bldg 4 Fee 100% Jul-99 5.80 84,000 36% DELAWARE BUS. PARK Banc One Fee 100% Jan-00 14.00 193,000 100% CINCINNATI, OHIO Deerfield Crsg. Fee 100% Aug-99 8.50 159,624 0% - 15 - COLUMBUS, OHIO TUTTLE CROSSING Blazer I Fee 100% Jul-99 5.65 70,209 0% One Easton Oval Fee 100% Mar-99 7.69 127,080 7% Atrium II Fee 100% May-99 10.42 145,084 41% Liebert Off.Bldg. Fee 100% Aug-99 5.65 67,594 67% NEW ALBANY Novus Services Fee 100% Feb-00 51.70 326,481 100% CHICAGO, ILLINOIS Central Park of Lisle II Fee 50% [8] Jan-00 8.36 303,246 0% ST. LOUIS, MISSOURI 520 Maryville Ctr. Fee 100% Jan-99 5.30 115,453 100% Express Scripts Headquarters Fee 100% May-99 11.40 141,774 100% 700 Maryville Ctr. Fee 100% Mar-00 5.70 210,154 0% CLEVELAND, OHIO Park Ctr. Bldg II Fee 100% Sep-99 6.67 133,983 0% Corporate Ctr. III Fee 100% May-99 1.80 68,000 0% NASHVILLE, TENNESSEE Three Lakeview Place Fee 100% Nov-99 7.11 149,700 0% MINNEAPOLIS, MINNESOTA Golden Hills Bldg 3 Fee 100% Nov-99 7.20 86,362 100% Golden Hills Bldg 2 Fee 100% Nov-99 7.50 79,231 32% RETAIL - ------ INDIANAPOLIS, INDIANA Hamilton Crsg. Ctr. Phase I Fee 100% Sep-99 9.00 66,306 45% Hamilton Crsg. Ctr. Phase II Fee 100% Aug-99 2.20 16,000 0% Cincinnati, Ohio Garden Ridge Fee 100% Apr-99 13.94 141,500 100% Drug Emporium Exp. Fee 100% Sep-99 2.90 26,226 100% Tuttle Crossing Tuttle Retail Ctr.-Cost Plus Fee 100% May-99 3.11 36,780 100% -------- ---------- Total Under Construction 457.50 7,240,964 -------- ---------- TOTAL 3,853.40 59,268,996 ======== ==========
[1] These buildings and a 50% general partnership interest in Park Fletcher Buildings 27 and 28 are owned by a limited liability company in which the Company is a 50.1% member. The Company shares in the profit or loss from such buildings in accordance with the Company's ownership interest. [2] These buildings are owned by a partnership in which the Company is a partner. The Company owns a 10% capital interest in the partnership and receives a 50% interest in the residual cash flow after payment of a 9% preferred return to the other partner on its capital interest. [3] This building is owned in partnership with a tenant of the building. The Company owns a 50% general partnership interest in the partnership. The Company shares in the profit or loss from the building in accordance with such ownership interest. [4] This building was constructed in three phases; 1962, 1971 and 1974. An expansion was completed in 1998. [5] This building is owned by a limited partnership in which the Company has a 1% general partnership interest and a 39% limited partnership interest. The Company shares in the profit or loss from such building in accordance with such ownership interest. [6] This building is owned by a limited liability company in which the Company is a 50% member. The Company shares in the profit or loss of the building in accordance with the Company's ownership interest. - 16 - [7] This building is owned by a partnership in which the Company owns a 33.33% limited partnership interest. The Company shares in the profit or loss from the building in accordance with such ownership interest. [8] The Company owns a 66.67% general partnership interest in the partnership owning this building. The Company shares in the profit or loss of this building in accordance with the Company's ownership interest. [9] The Company owns the building and has a leasehold interest in the land underlying this building with a lease term expiring October 2067. [10] The Company has a leasehold interest in this building with a lease term expiring May 2006. [11] The Company owns the building and has a leasehold interest in the land underlying this building with a lease expiring October 2067. [12] These are properties for which there are loans to owners which fully encumber the properties. Under the terms of the loans, the Company effectively receives all income and economic value from the properties. As a result, the properties are accounted for as owned properties. [13] The Company owns this building and has a leasehold interest in the land underlying this building with a lease term expiring August 2045, with two 20-year options to renew. [14] The Company has a leasehold interest in the building and the underlying land with a lease term expiring June 2020. The Company has an option to purchase the fee interest in the property throughout the term of the lease. [15] This building was renovated in 1986. [16] These buildings are owned by a partnership in which the Company owns a 75% general partnership interest. The Company shares in the profit or loss from these buildings in accordance with such ownership interest. [17] This building was renovated in 1985. [18] Tri-County Office Park consists of four buildings. One was built in 1971, two were built in 1973, and one was built in 1982. [19] The Company owns this building and has a leasehold interest in the land underlying this building with a lease term expiring in June 2095. [20] This building is currently vacant because the Company intends to demolish the existing building and construct a new, larger office property. [21] This building is owned by a partnership in which the Company owns a 30% limited partnership interest. The Company shares in the profit or loss from the building in accordance with such ownership interest. [22] This building is owned through a limited liability company in which the partnership is a 25% member. The limited liability company owns a 57.5% interest in the Fountain Place retail project. [23] The Company owns this building and has a leasehold interest in the land underlying this building with a lease term expiring in October 2048. ITEM 3. LEGAL PROCEEDINGS The Company is engaged in litigation as a defendant in a case filed by a tenant involving an alleged breach of contractual lease obligation. Based on information currently available and upon the advice of counsel, it is the opinion of management that the ultimate disposition of the pending legal proceeding should not have a material adverse effect on the Company's consolidated financial statements. However, in the event of an unfavorable ruling by a jury or judge in a court of competent jurisdiction with respect to the ultimate disposition of this case, such a ruling could have a material adverse effect on the Company's results of operations in a particular future period. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 1998. - 17 - PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Company's Common Shares are listed for trading on the New York Stock Exchange, symbol DRE. The following table sets forth the high and low sales prices of the Common Stock for the periods indicated and the dividend paid per share during each such period. Comparable cash dividends are expected in the future. As of March 1, 1999, there were 9,046 record holders of Common Shares.
1998 1997 (1) ---------------------------- --------------------------- QUARTER ENDED HIGH LOW DIVIDEND HIGH LOW DIVIDEND ------------- ---- ----- -------- ---- ----- -------- December 31 $24.38 $21.50 $.340 $25.00 $21.38 $.300 September 30 24.31 19.50 .340 23.63 19.81 .295 June 30 25.00 21.81 .300 20.88 17.13 .255 March 31 25.00 22.31 .300 21.44 19.00 .255
(1) All stock prices and dividend amounts reflect the Company's two-for-one stock split effected in August 1997. On January 27, 1999, the Company declared a quarterly cash dividend of $.34 per share payable on February 26, 1999 to common shareholders of record on February 11, 1999. Following is a summary of the taxable nature of the Company's dividends for the three years ended December 31:
1998 1997 1996 ------- ------- ------- Total dividends paid per share $1.28 $1.10 $1.00 ==== ==== ==== Percent taxable as ordinary income 96.33% 100.00% 99.10% Percent taxable as long-term capital gains - - - Percent non-taxable as return of capital 3.67% - .90% ------ ------ ------ 100.00% 100.00% 100.00% ====== ====== ======
Dividends per share of $1.09, $.97 and $.89 were required for the Company to maintain its REIT status in 1998, 1997, and 1996, respectively. See "Item 10-Directors and Executive Offcers of the Registrant" for a description of certain shares of common stock issued to non-employee directors in non-registered transactions pursuant to Section 4(2) under the Securities Act of 1933, as amended. ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA The following sets forth selected consolidated financial and operating information on a historical basis for the Company for each of the years in the five-year period ended December 31, 1998. The following information should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 8, "Financial Statements and Supplementary Data" included in this Form 10-K (in thousands, except per share amounts): - 18 -
1998 1997 1996 1995 1994 ---- ---- ---- ---- ---- RESULTS OF OPERATIONS: Revenues: Rental Operations $ 348,625 $ 229,702 $ 162,160 $ 113,641 $ 89,299 Service Operations 24,716 22,378 19,929 17,777 18,473 --------- --------- --------- --------- ------- TOTAL REVENUES $ 373,341 $ 252,080 $ 182,089 $ 131,418 $107,772 ========= ========= ========= ========= ======= NET INCOME AVAILABLE FOR COMMON SHARES $ 90,871 $ 65,999 $ 50,872 $ 35,019 $ 26,216 ========= ======== ========= ========= ======= PER SHARE DATA (1): Net Income per Common Share: Basic $ 1.13 $ .99 $ .91 $ .77 $ .77 Diluted 1.12 .98 .90 .77 .77 Dividends paid per Common Share 1.28 1.10 1.00 .96 .92 Weighted Average Common Shares Outstanding 80,704 66,427 56,134 45,358 34,278 Weighted Average Common and Dilutive Potential Common Shares 92,468 74,993 64,398 53,802 43,002 BALANCE SHEET DATA (AT DECEMBER 31): Total Assets $2,853,653 $2,176,214 $1,361,142 $1,045,588 $774,901 Total Debt 1,007,317 720,119 525,815 454,820 298,640 Total Preferred Equity 347,798 218,338 72,288 - - Total Shareholders' Equity 1,570,112 1,234,681 754,932 534,789 445,384 Total Common Shares Outstanding (1) 86,053 76,065 58,972 48,304 40,782 OTHER DATA: Funds From Operations (2) $ 154,074 $ 107,256 $ 76,079 $ 54,746 $ 38,198 Cash Flow Provided by (Used by): Operating activities $ 221,188 $ 159,195 $ 95,135 $ 78,620 $ 51,873 Investing activities (703,814) (597,324) (276,748) (289,569)(116,238) Financing activities 479,223 443,148 181,220 176,243 94,733
(1)Information for all five years reflects the two-for-one stock split effected in August 1997. (2)Funds From Operations, is defined by the National Association of Real Estate Investment Trusts as net income or loss excluding gains or losses from debt restructuring and sales of property plus depreciation and amortization, and after adjustments for minority interest and unconsolidated companies (adjustments for minority interests, unconsolidated companies are calculated to reflect Funds From Operations on the same basis). Funds From Operations does not represent cash flow from operations as defined by generally accepted accounting principles, should not be considered as an alternative to net income as an indicator of the Company's operating performance, and is not indicative of cash available to fund all cash flow needs. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW -------- The Company's income from rental operations is substantially influenced by the supply and demand for the Company's rental space in its primary markets, its ability to maintain occupancy rates and increase rental rates on its in-service portfolio and to continue development and acquisition of additional rental properties. The Company's primary markets in the Midwest have continued to offer strong and stable local economies and have provided attractive new development opportunities because of their central location, established manufacturing base, skilled work force and moderate labor costs. Consequently, the Company's occupancy rate of its in-service portfolio has averaged 94.9% the last two years and was 95.1% at December 31, 1998. The Company expects to maintain its overall occupancy at comparable levels and also expects to increase rental rates as leases are renewed or new leases are executed. This stable occupancy as well as increasing rental rates should improve the Company's results of operations from its in-service properties. The Company's strategy for continued growth includes developing and acquiring additional rental properties in its primary markets and expanding into other attractive markets (see discussion of Weeks merger below). The Company tracks Same Property performance which compares those properties that were fully in-service for all of a two-year period. Because of the rapid growth of the Company, this population of properties only represented 47.7% and 45.3% of the in-service portfolio at December 31, 1998 and December 31, 1997, - 19 - respectively. In 1998, FFO from those properties that were fully in- service for the past two years increased 4.4% over 1997, compared to a 4.7% increase in 1997 over 1996. The following table sets forth information regarding the Company's in- service portfolio of rental properties as of December 31, 1998 and 1997 (square feet in thousands):
Total Percent of Square Feet Total Square Feet Percent Occupied ----------------- ----------------- ------------------ Type 1998 1997 1998 1997 1998 1997 - --------- ------ ------ ------ ------ ------ ------ INDUSTRIAL Service Centers 6,123 4,309 11.7% 10.6% 93.4% 92.5% Bulk 29,745 23,572 57.2% 58.0% 95.4% 93.4% OFFICE Suburban 13,015 10,047 25.0% 24.7% 95.0% 96.0% CBD 861 699 1.7% 1.7% 96.3% 93.9% RETAIL 2,284 2,041 4.4% 5.0% 95.8% 95.8% ------ ------ ----- ----- Total 52,028 40,668 100.0% 100.0% 95.1% 94.1% ====== ====== ===== =====
Management expects occupancy of the in-service property portfolio to remain stable because (i) only 11.1% and 9.0% of the Company's occupied square footage is subject to leases expiring in 1999 and 2000, respectively, and (ii) the Company's renewal percentage averaged 69%, 81% and 80% in 1998, 1997 and 1996, respectively. The following tables reflects the Company's in-service lease expiration schedules as of December 31, 1998, by product type indicating square footage and annualized net effective rents under expiring leases (in thousands, except per square foot amounts):
Indust. Portfolio Office Portfolio Retail Portfolio Total Portfolio ----------------- ---------------- ---------------- --------------- Yr.of Sq. Sq. Sq. Sq. Exp. Ft. Rent Ft. Rent Ft. Rent Ft. Rent - ---- ------ ---------- ------ ------ ------ ----- ------ ------- 1999 3,882 $ 16,884 1,506 $ 16,063 109 $ 1,114 5,497 $ 34,061 2000 3,019 13,054 1,290 16,051 120 1,464 4,429 30,569 2001 3,949 16,708 1,868 23,116 92 1,121 5,909 40,945 2002 4,611 18,977 1,678 19,175 149 1,678 6,438 39,830 2003 4,217 18,980 1,482 19,608 149 1,617 5,848 40,205 2004 1,785 8,062 763 10,245 18 194 2,566 18,501 2005 2,918 9,507 1,090 14,904 216 1,846 4,224 26,257 2006 2,267 8,983 733 10,590 8 108 3,008 19,681 2007 2,344 7,631 569 7,828 76 760 2,989 16,219 2008 2,447 8,698 447 6,048 46 613 2,940 15,359 There- after 2,657 10,348 1,763 24,398 1,206 10,653 5,626 45,399 ------ ------- ------ ------- ----- ------ ------ ------- Total 34,096 $137,832 13,189 $168,026 2,189 $21,168 49,474 $327,026 ====== ======= ====== ======= ===== ====== ====== ======= Total Port- folio 35,868 13,876 2,284 52,028 ====== ====== ===== ====== Annualized net effective rent per sq. ft. leased $ 4.04 $ 12.74 $ 9.67 $ 6.61 ======= ====== ====== ======
This stable occupancy, along with increasing rental rates in each of the Company's markets, will allow the in-service portfolio to continue to provide an increasing level of earnings from rental operations. The Company also expects to realize growth in earnings from rental operations through (i) the development and acquisition of additional rental properties in its primary markets; (ii) the expansion into other attractive Midwestern markets (see discussion of Weeks merger below); and (iii) the completion of the 7.2 million square feet of properties under development at December 31, 1998 over the next four quarters and thereafter. The 7.2 million square under development are expected to be placed in service as follows (in thousands, except percentages): - 20 -
Anticipated Estimated Anticipated In-Service Square Percent Project Stabilized Date Feet Pre-Leased Costs Return - ----------- ----- ---------- --------- ----------- 1st Quarter 1999 2,015 50% $104,830 11.9% 2nd Quarter 1999 2,159 37% 91,151 11.3% 3rd Quarter 1999 1,215 35% 93,553 11.8% 4th Quarter 1999 819 75% 42,063 11.4% Thereafter 1,033 50% 126,439 10.6% ----- ------- 7,241 47% $458,036 11.4% ===== =======
RESULTS OF OPERATIONS --------------------- A summary of the Company's operating results and property statistics for each of the years in the three-year period ended December 31, 1998 is as follows (in thousands, except number of properties and per share amounts):
1998 1997 1996 ------ ------ ------ Rental Operations revenues $348,625 $229,702 $162,160 Service Operations revenues 24,716 22,378 19,929 Earnings from Rental Operations 125,967 83,740 54,332 Earnings from Service Operations 7,195 7,153 6,436 Operating income 121,589 84,363 56,049 Net income available for common shares 90,871 65,999 50,872 Weighted average common shares outstanding (1) 80,704 66,427 56,134 Weighted average common and dilutive potential common shares (1) 92,468 74,993 64,398 Basic income per common share (1) $ 1.13 $ .99 $ .91 Diluted income per common share (1) $ 1.12 $ .98 $ .90 Number of in-service properties at end of year 453 355 249 In-service square footage at end of year 52,028 40,668 27,402 Under development square footage at end of year 7,241 5,243 3,801 (1) As adjusted for the two-for-one stock split effected in August 1997. COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997 --------------------------------------------------------------------------- Rental Operations ----------------- The Company increased its in-service portfolio of rental properties from 355 properties comprising 40.7 million square feet at December 31, 1997 to 453 properties comprising 52.0 million square feet at December 31, 1998 through the acquisition of 66 properties totaling 5.0 million square feet and the placement in service of 34 properties and one seven building expansions totaling 6.3 million square feet developed by the Company. The Company also disposed of two properties totaling 21,000 square feet. These 98 net additional rental properties primarily account for the $118.9 million increase in revenues from Rental Operations from 1997 to 1998. The increase from 1997 to 1998 in rental expenses, real estate taxes and depreciation and amortization expense is also a result of the additional 98 in-service rental properties. Interest expense increased by $19.9 million primarily due to interest expense of $11.4 million on $250 million of unsecured debt which the Company issued in 1998 at effective interest rates ranging from 6.72% to 7.29%. Additionally, interest expense on the Company's $100 million of unsecured debt issued in 1997 increased by $4.7 million due to the fact that debt was outstanding approximately five months in 1997 compared to 12 months in 1998. This issuance bears interest at an effective rate of 7.35%. The proceeds from these debt issuances were used to fund development and acquisition of additional rental properties. - 21 - As a result of the above mentioned items, earnings from Rental Operations increased $42.3 million from $83.7 million for the year ended 1997 to $126.0 million for 1998. Service Operations ------------------ Service Operations revenues increased from $22.4 million to $24.7 million for the year ended 1998 as compared to 1997 primarily as a result of increases in construction management fee revenue because of an increase in third-party construction volume. Service Operations expenses increased from $15.2 million to $17.5 million for the year ended 1998 as compared to 1997 primarily as a result of an increase in payroll expenses resulting from the overall growth of the Company and the additional regional offices opened in 1997. As a result of the above-mentioned items, earnings from Service Operations remained constant at $7.2 million for the years ended 1998 and 1997. General and Administrative Expense ---------------------------------- General and administrative expense increased from $6.5 million for the year ended 1997 to $11.6 million for 1998 as a result of internal acquisition costs which are no longer permitted to be capitalized being charged to general and administrative expense as well as an increase in state and local income taxes resulting from the overall growth of the Company. Net Income Available for Common Shares -------------------------------------- Net income available for common shares for the year ended 1998 was $90.9 million compared to $66.0 million for 1997. This increase results primarily from the increases in the operating results of rental and service operations explained above. COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996 -------------------------------------------------------------------------- Rental Operations ----------------- The Company increased its in-service portfolio of rental properties from 249 properties comprising 27.4 million square feet at December 31, 1996 to 355 properties comprising 40.7 million square feet at December 31, 1997 through the acquisition of 84 properties totaling 8.4 million square feet and the placement in service of 28 properties and two building expansions totaling 5.4 million square feet developed by the Company. The Company also disposed of six properties totaling 443,000 square feet. These 106 net additional rental properties primarily account for the $67.5 million increase in revenues from Rental Operations from 1996 to 1997. The increase from 1996 to 1997 in rental expenses, real estate taxes and depreciation and amortization expense is also a result of the additional 106 in-service rental properties. Interest expense increased by $7.7 million. This increase was primarily because of interest expense on the $90 million of unsecured debt which the Company issued in 1996 at a weighted average rate of 7.20% under its medium-term note program. The Company also issued $100 million of unsecured debt in 1997 which bears interest at an effective interest rate of 7.35%. The proceeds from these debt issuances were used to fund development and acquisition of additional rental properties. As a result of the above mentioned items, earnings from Rental Operations increased $29.4 million from $54.3 million for the year ended 1996 to $83.7 million for the year ended 1997. - 22 - Service Operations ------------------ Service Operations revenues increased from $19.9 million to $22.4 million for the year ended 1997 as compared to 1996 primarily as a result of increases in construction management fee revenue because of an increase in third-party construction volume. Service Operations expenses increased from $13.5 million to $15.2 million for the year ended 1997 as compared to 1996 primarily as a result of an increase in operating expenses resulting from the overall growth of the Company and the additional regional offices opened in 1996 and 1997. As a result of the above-mentioned items, earnings from Service Operations increased from $6.4 million to $7.2 million for the years ended 1996 and 1997, respectively. General and Administrative Expense ---------------------------------- General and administrative expense increased from $4.7 million for the year ended 1996 to $6.5 million for 1997 primarily as a result of increased state and local taxes due to the growth in revenues and net income of the Company. Other Income (Expense) ---------------------- Interest income increased from $1.2 million for the year ended 1996 to $2.2 million for the year ended 1997 as a result of the temporary short-term investment of a greater amount of proceeds from the 1997 debt and equity offerings. Other expense consists of costs incurred in pursuit of unsuccessful development or acquisition opportunities. During the year ended 1996, the Company sold a 251,000 square foot corporate headquarters facility pursuant to a purchase option contained in the original agreement to lease the building. The project was sold for approximately $32.9 million and the Company recognized a gain of approximately $1.6 million on the sale. The Company also realized gains totaling $2.9 million in 1996 related to the sale of a retail center and several parcels of land. Net Income Available for Common Shares -------------------------------------- Net income available for common shares for the year ended 1997 was $66.0 million compared to $50.9 million for 1996. This increase results primarily from the increases in the operating results of rental and service operations explained above. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities totaling $221.2 million, $159.2 million and $95.1 million for the years ended 1998, 1997 and 1996, respectively, represents the primary source of liquidity to fund distributions to shareholders and minority interests and to fund recurring costs associated with the renovation and re-letting of the Company's properties. The primary reason for the increases in net cash provided by operating activities is, as discussed above under "Results of Operations," the increase in net income each year resulting from the expansion of the in-service portfolio through development and acquisitions of additional rental properties. Net cash used by investing activities totaling $703.8 million, $597.3 million and $276.7 million for the years ended 1998, 1997 and 1996, respectively, represents the investment of funds by the Company to expand its portfolio of rental properties through the development and acquisition of additional rental properties. - 23 - Net cash provided by financing activities totaling $479.2 million, $443.1 million and $181.2 million for the years ended 1998, 1997 and 1996, respectively, is comprised of debt and equity issuances, net of distributions to shareholders and minority interests and repayments of outstanding indebtedness. In 1998, the Company received $211.5 million of net proceeds from the issuance of common shares and $129.5 million of net proceeds from a preferred stock offering. The Company also issued $250.0 million of unsecured debt. The Company used the net proceeds from the equity and unsecured debt offerings to reduce amounts outstanding under the Company's lines of credit and to fund the development and acquisition of additional rental properties. In 1997, the Company received $321.2 million of net proceeds from the issuance of common shares and $146.1 million of net proceeds from a preferred stock offering. The Company also issued $100.0 million of unsecured debt. The Company used the net proceeds from the equity and debt offerings to reduce amounts outstanding under the Company's lines of credit and to fund the development and acquisition of additional rental properties. The recurring capital needs of the Company are funded primarily through the undistributed net cash provided by operating activities. A summary of the Company's recurring capital expenditures is as follows (in thousands):
1998 1997 1996 ---- ---- ---- Tenant improvements $10,785 $ 7,985 $6,048 Leasing costs 6,655 5,057 3,032 Building improvements 2,206 1,211 780 ------ ------ ----- Total $19,646 $14,253 $9,860 ====== ====== =====
The Company has a $450.0 million unsecured line of credit ("LOC") available to fund the development and acquisition of additional rental properties and to provide working capital as needed. The LOC matures in April 2001 and bears interest at the 30-day London Interbank Offered Rate ("LIBOR") plus .80%. The Company increased the LOC from $200.0 million in August 1998. The Company has the option to obtain borrowings from financial institutions who participate in the LOC at rates lower than LIBOR plus .80% ("Competitive Bid Option"), subject to certain restrictions. While the Company has utilized the Competitive Bid Option during 1998, all amounts outstanding at December 31, 1998 are at LIBOR plus .80%. Borrowings of $91 million under the LOC as of December 31, 1998 bear interest at an effective rate of 6.43%. The Company also has a demand $7.0 million secured line of credit which is available to provide working capital, and bears interest payable monthly at the 30-day LIBOR rate plus .65%. Borrowings of $7.0 million are outstanding on this line of credit at December 31, 1998 and bear interest at an effective rate of 6.28%. The Company currently has on file three Form S-3 Registration Statements with the Securities and Exchange Commission (the "Shelf Registrations") which have remaining availability as of December 31, 1998 of $967.9 million to issue additional common stock, preferred stock and unsecured debt securities. The Company intends to issue additional securities under such Shelf Registrations to fund the development and acquisition of additional rental properties. The Company also has a shelf registration on file for at-the-market offerings of 1.5 million shares of common stock. The total debt outstanding at December 31, 1998 consists of notes totaling $1.007 billion with a weighted average interest rate of 7.31% maturing at various dates through 2028. The Company has $681.0 million of unsecured debt and $326.3 million of secured debt outstanding at December 31, 1998. Scheduled principal amortization of such debt totaled $7.1 million for the year ended 1998. A summary of the scheduled future amortization and maturities of the Company's indebtedness is as follows (in thousands): - 24 -
Repayments -------------------------------------------- Weighted Average Scheduled Interest Rate of Year Amortization Maturities Total Future Repayments ---- ------------ --------- --------- ----------------- 1999 $ 7,885 $ 35,430 $ 43,315 6.40% 2000 5,753 64,850 70,603 7.13% 2001 5,954 166,095 172,049 6.78% 2002 6,462 50,000 56,462 7.40% 2003 4,519 66,144 70,663 8.47% 2004 3,509 177,035 180,544 7.41% 2005 3,800 100,000 103,800 7.49% 2006 4,117 100,000 104,117 7.07% 2007 3,653 14,938 18,591 7.76% 2008 3,941 100,000 103,941 6.78% Thereafter 33,232 50,000 83,232 7.01% ------ ------- --------- Total $82,825 $924,492 $1,007,317 7.31% ====== ======= =========
The Company intends to pay regular quarterly dividends from net cash provided by operating activities. A quarterly dividend of $.34 per common share was declared on January 27, 1999 which represents an annualized dividend of $1.36 per share. FUNDS FROM OPERATIONS Management believes that Funds From Operations ("FFO"), which is defined by the National Association of Real Estate Investment Trusts as net income or loss excluding gains or losses from debt restructuring and sales of property plus depreciation and amortization, and after adjustments for minority interest and unconsolidated companies (adjustments for minority interest and unconsolidated companies are calculated to reflect FFO on the same basis), is the industry standard for reporting the operations of real estate investment trusts. The following reflects the calculation of the Company's FFO for the years ended December 31 (in thousands):
1998 1997 1996 ---- ---- ---- Net income available for common shares $ 90,871 $ 65,999 $ 50,872 Add back (deduct): Depreciation and amortization 68,766 44,806 31,363 Share of adjustments for unconsolidated companies 4,302 3,017 1,890 Earnings from property sales (1,351) (1,775) (4,532) Minority interest share of add-backs (8,514) (4,791) (3,514) ------- ------- ------- FUNDS FROM OPERATIONS $154,074 $107,256 $ 76,079 ======= ======= ======= CASH FLOW PROVIDED BY (USED BY): Operating activities $221,188 $159,195 $ 95,135 Investing activities (703,814) (597,324) (276,748) Financing activities 479,223 443,148 181,220
The increase in FFO during the three-year period results primarily from the increased in-service rental property portfolio as discussed above under "Results of Operations." While management believes that FFO is the most relevant and widely used measure of the Company's operating performance, such amount does not represent cash flow from operations as defined by generally accepted accounting principles, should not be considered as an alternative to net income as an indicator of the Company's operating performance, and is not indicative of cash available to fund all cash flow needs. MERGER WITH WEEKS On March 1, 1999, the Company announced that it entered into an Agreement and Plan of Merger, dated as of February 28, 1999 (the "Merger Agreement"), with Weeks Corporation ("Weeks"), - 25 - pursuant to which Weeks will merge with and into the Company. Weeks is a self-administered, self-managed, geographically focused REIT that was organized in 1994. As of December 31, 1998, Weeks' in-service property portfolio consisted of 300 industrial properties, 34 suburban office properties and five retail properties comprising 28.1 million square feet. As of December 31, 1998, Weeks' primary markets and the concentration of Weeks' portfolio (based on square footage of in-service properties) were Atlanta, Georgia; Nashville, Tennesses; Miami, Florida; Raleigh-Durham- Chapel Hill (the "Research Triangle"), North Carolina; Dallas/Ft. Worth, Texas; Orlando, Florida; and Spartanburg, South Carolina. In addition, 31 industrial, suburban office and retail properties were under development, in lease-up or under agreement to acquire at December 31, 1998, comprising an additional 3.4 million square feet. At December 31, 1998, Weeks had approximately 19.7 million shares of common stock and six million shares of preferred stock outstanding, and approximately $654 million aggregate principal amount of outstanding indebtedness. In the merger, each outstanding share of common stock of Weeks will be converted into the right to receive 1.38 shares of common stock of the Company; each outstanding share of 8.0% Series A Cumulative Redeemable Preferred Stock of Weeks will be converted into the right to receive one depositary share of the Company representing 1/1000 of a share of 8.0% Series F Cumulative Redeemable Preferred Stock of the Company; and each outstanding share of 8.625% Series D Cumulative Redeemable Preferred Stock of Weeks will be converted into the right to receive one depositary share of the Company representing 1/1000 of a share of 8.625% Series H Cumulative Redeemable Preferred Stock of the Company. The terms of the Company's depositary shares to be issued in the Merger will be identical to the terms of the Weeks Series A and Series D preferred stock. Weeks' principal operating subsidiary, Weeks Realty, L.P. (The "Weeks Operating Partnership"), will be merged with and into the Operating Partnership. In the partnership merger, each outstanding common unit of Weeks Operating Partnership will be converted into the right to receive 1.38 common units of the Operating Partnership. At December 31, 1998, Weeks Operating Partnership had approximately 7.3 million units of limited partnership interest outstanding. The merger of Weeks into the Company is expected to qualify as a tax-free reorganization and will be accounted for under the purchase method of accounting. The transactions are expected to close in the second or third quarter of 1999, subject to receipt of necessary approvals by the Company and Weeks shareholders and satisfaction of customary closing conditions. If the merger between the Company and Weeks is consummated as expected, the combined company will have significant operations and assets located in southeastern markets where the Company and its management have not traditionally owned assets. Since substantially all of the members of Weeks' management are expected to remain with the combined company for the foreseeable future after the merger, the Company expects to have the necessary expertise to operate successfully in the new markets. The combined company's operating performance will, however, be exposed to the general economic conditions of its new markets and could be adversely affected if conditions, such as an oversupply of space or a reduction in demand for the types of properties supplied by the combined company, become unfavorable. YEAR 2000 The Company adopted a Year 2000 readiness plan for its buildings in April 1998 following the basic framework recommended by the Building Owners and Managers Association. This Year 2000 readiness plan consists of eight (8) steps focusing on the identification, prioritization, and remediation of potential Year 2000 problems arising from software and embedded chips located within the building systems at the Company's properties. - 26 - Based upon implementation of this readiness plan which is substantially complete, the Company does not believe the cost for the upgrade and replacement of building systems and equipment having potential Year 2000 related problems will be a material amount. The Company has retained a third-party consultant to identify and assess the Year 2000 readiness of the Company's information systems. Such systems include, but are not limited to, accounting and property management, network operations, desktop and software applications, internally developed software and other general information systems and software utilized for payroll, human resources, budgeting and tenant services. Based upon the results of this assessment, the Company does not believe the cost for the upgrade and replacement of internal information systems having potential Year 2000 problems will be a material amount. Based on the evaluations performed, the Company does not believe the risks associated with its Year 2000 issues are significant. The Company's contingency plans include allowing for alternative access to its properties, the provision of limited electrical and telephone services and security and other basic services. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS The Company is exposed to interest rate changes primarily as a result of its line of credit and long-term debt used to maintain liquidity and fund capital expenditures and expansion of the Company's real estate investment portfolio and operations. The Company's interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives the Company borrows primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The Company does not enter into derivative or interest rate transactions for speculative purposes. The Company's interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts (in thousands) of the expected annual maturities, weighted average interest rates for the average debt outstanding in the specified period, fair values and other terms required to evaluate the expected cash flows and sensitivity to interest rate changes. The fair values of the Company's debt instruments are calculated as the present value of estimated future cash flows using a discount rate commensurate with the risks involved.
1999 2000 2001 2002 2003 ------ ------ ------ ------ ------ Fixed rate secured debt $36,145 $10,413 $80,845 $ 6,237 $70,418 Weighted average interest rate 8.21% 8.34% 8.28% 8.22% 8.11% Variable rate LIBOR based secured debt $ 7,000 $20,000 $ - $ - $ - Weighted average interest rate 6.41% 5.62% N/A N/A N/A Variable rate other secured debt $ 170 $ 190 $ 205 $ 225 $ 245 Weighted average interest rate 3.93% 3.91% 3.90% 3.88% 3.86% Unsecured notes $ - $40,000 $ - $50,000 $ - Weighted average interest rate 7.19% 7.18% 7.18% 7.17% 7.17% Unsecured line of credit $91,000 $ - $ - $ - $ - Weighted average interest rate 6.43% N/A N/A N/A N/A Fair Thereafter Total Value ---------- --------- ------------ Fixed rate secured debt $ 81,834 $285,892 $302,817 Weighted average interest rate 8.00% Variable rate LIBOR based secured debt $ - $ 27,000 $ 27,072 Weighted average interest rate N/A Variable rate other secured debt $ 12,390 $ 13,425 $ 10,052 Weighted average interest rate 3.86% Unsecured Notes $500,000 $590,000 $606,803 Weighted average interest rate 7.16% Unsecured line of credit $ - $ 91,000 $ 91,000 Weighted average interest rate N/A
As the table incorporates only those exposures that exist as of December 31, 1998, it does not consider those exposures or positions which could arise after that date. Moreover, because firm - 27 - commitments are not presented in the table above, the information presented therein has limited predictive value. As a result, the Company's ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, the Company's hedging strategies at that time, and interest rates. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary data are included under Item 14 of this Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ON ACCOUNTING FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following information is provided regarding the Board of Directors of the Company: NAME, AGE, PRINCIPAL OCCUPATION(S) AND DIRECTOR BUSINESS EXPERIENCE DURING PAST 5 YEARS SINCE -------------------------------------- ------- DIRECTORS WHOSE TERMS EXPIRE IN 1999 THOMAS L. HEFNER, AGE 52 1993 Chairman, President and Chief Executive Officer of the Company. L. BEN LYTLE, AGE 52 1996 Chairman, President and Chief Executive Officer of Anthem, Inc., a national insurance and financial services firm. Director of IPALCO Enterprises, Inc. and Central Newspapers, Inc. EDWARD T. BAUR, AGE 52 1997 Vice President and General Manager of the Company. Prior to joining the Company in 1997, Mr. Baur was the Chief Executive Officer of Baur Properties. JOHN W. WYNNE, AGE 65 1986 Former Chairman of the Board of Directors of the Company through 1998. Director of First Indiana Corp. DIRECTORS WHOSE TERMS EXPIRE IN 2000 HOWARD L. FEINSAND, AGE 51 1988 Founder and Principal, Choir Capital Ltd., since 1996. Managing Director, Citicorp North America, Inc., 1995-1996; Senior Vice President and Manager, GE Capital Aviation Services, Inc. an aircraft leasing company, 1994 - 1995. Director of Egan Systems, Inc. JAMES E. ROGERS, AGE 51 1994 Vice Chairman, President and Chief Executive Officer of Cinergy Corp., a regional utility holding company. Director of Cinergy Corp. and Fifth Third Bancorp. DANIEL C. STATON, AGE 46 1993 President of Walnut Capital Partners, an investment and venture capital company, since 1997. Executive Vice President and Chief Operating Officer of the Company until May 1997. Chairman of the Board of Directors of Storage Trust Realty, Inc. JAY J. STRAUSS, AGE 63 1985 Chairman and Chief Executive Officer of Regent Realty Group, Inc., a general real estate and mortgage banking firm. DIRECTORS WHOSE TERMS EXPIRE IN 2001 GEOFFREY BUTTON, AGE 50 1993 An independent real estate and financing consultant. Prior to 1996, was Executive Director of Wyndham Investments Limited, a property holding company of Allied Domecq Pension Funds. Director of Sector Communications, Inc. - 28 - NAME, AGE, PRINCIPAL OCCUPATION(S) AND DIRECTOR BUSINESS EXPERIENCE DURING PAST 5 YEARS SINCE --------------------------------------- -------- NGAIRE E. CUNEO, AGE 48 1995 Executive Vice President, Corporate Development, Conseco, Inc., an owner, operator and provider of services to companies in the financial services industry. Director of Conseco, Inc. and Bankers Life Holding Corporation. JOHN D. PETERSON, AGE 65 1986 Chairman of City Securities Corporation, a securities brokerage firm. Director of Lilly Industries, Inc. DARELL E. ZINK, JR., AGE 52 1993 Executive Vice President, Chief Financial Officer and Assistant Secretary of the Company. Director of People's Bank Corporation of Indianapolis. COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY The Board of Directors of the Company met four times during the last fiscal year. The Board of Directors of the Company has an Asset Committee, an Audit Committee, an Executive Compensation Committee, a Finance Committee and a Nominating Committee. The function of the Asset Committee is to discuss, review and authorize business transactions that exceed established guidelines. The members of the Asset Committee are Messrs. Baur, Feinsand, Peterson, Strauss and Zink and Ms. Cuneo. Mr. Strauss served as the Committee's chairman. The Committee met 12 times in 1998. The function of the Audit Committee is to evaluate audit performance, handle relations with the Company's independent auditors and evaluate policies and procedures related to internal accounting controls. The members of the Audit Committee are Messrs. Button, Feinsand, Lytle and Peterson and Ms. Cuneo. Mr. Feinsand served as the Committee's chairman. The Committee met 3 times during 1998. The function of the Executive Compensation Committee is to review and make recommendations to the Board of Directors with respect to the compensation of directors, officers, and employees of the Company, to implement the Company's long term compensation plans and other employee benefit plans and to make recommendations to the Nominating Committee regarding individuals qualified to be nominated as unaffiliated directors. The members of the Executive Compensation Committee are Messrs. Button, Lytle, Rogers and Strauss and Ms. Cuneo. Mr. Button served as the Committee's chairman. The Committee met 5 times during 1998. The function of the Finance Committee is to review, recommend and authorize certain debt financing and equity transactions. The members of the Finance Committee are Messrs. Baur, Button, Feinsand, Rogers, Staton, Strauss and Zink. Mr. Rogers served as the Committee's chairman. The committee met 6 times during 1998. The function of the Nominating Committee is to nominate individuals to serve as directors. The Nominating Committee is comprised of all of the unaffiliated directors, Messrs. Button, Feinsand, Lytle, Peterson, Rogers and Strauss and Ms. Cuneo. The committee does not formally consider nominations by shareholders. Mr. Button served as the Committee's chairman. The Committee met once during 1998. In 1998, all directors attended at least 75% of the meetings of the Board and all committees of the Board of which they were members except for Mr. Rogers. Mr. Rogers attended 100% of the Board of Directors meetings, but his overall attendance at all Board and committee meetings was less than 75%. - 29 - DIRECTOR EMERITUS At the annual meeting of shareholders, the Company will confer the title of Director Emeritus upon John W. Wynne, who does not intend to stand for re-election as a Director this year. Mr. Wynne has served the Company as a Director with exemplary skill and loyalty since the Company was established and was one of the founders of the Company in 1972. The entire Duke organization wishes to express its gratitude and admiration for Mr. Wynne's outstanding service throughout his career and looks forward to many more years of his valuable counsel in the role of Director Emeritus. COMPENSATION OF DIRECTORS Each non-employee director receives 1,200 shares of Company common stock as annual compensation. Non-employee directors also receive a fee of $2,500 for attendance at each meeting of the Board of Directors. In addition, the non-employee directors receive $500 for participation in each telephonic meeting of the Board and for participation in each committee meeting not held in conjunction with a regularly scheduled Board meeting. Officers of the Company who are also directors receive no additional compensation for their services as directors. Beginning in 1999, certain Directors will receive grants of stock option and dividend increase units under the 1999 Director's Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. Pursuant to this plan, Directors that do not receive grants of stock options under any other Company plan for a year will receive a grant of 2,500 stock options and 2,500 dividend increase units at the first meeting of the Company's Executive Compensation Committee of each year. However, for 1999 only, Directors that have never been granted stock options under a Company plan will receive a grant of 7,500 stock options and 7,500 dividend increase units. The following information is provided regarding the executive officers of the Company who do not serve as Directors of the Company: Name, Age, Principal Occupation(s) and With the Business Experience during Past 5 Years Company Since --------------------------------------- ------------- GARY A. BURK - Age 47 1979 President of Duke Services, Inc. Mr. Burk is responsible for the Company's construction operations. ROBERT CHAPMAN - Age 45 1997 Executive Vice President - Acquisitions. Mr. Chapman was previously with The REEF Funds where he managed acquisitions and dispositions. JOHN R. GASKIN - Age 37 1990 Vice President, General Counsel and Secretary RICHARD W. HORN - Age 41 1984 Executive Vice President - Office. Mr. Horn is responsible for all office activities of the Company. WILLIAM E. LINVILLE, III - Age 44 1987 Executive Vice President - Industrial. Mr. Linville is responsible for all Industrial activities of the Company. JOHN NEMECEK - Age 44 1994 President - Asset and Property Management. Mr. Nemecek was previously with Compass Management where he managed the Florida operations. DENNIS D. OKLAK - AGE 45 1986 Executive Vice President, Chief Administrative Officer and Treasurer. - 30 - BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors, and persons who beneficially own more than 10% of the Company's Common Shares, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Based on a review of these forms, the Company believes that during 1998 all of its officers, directors and greater than 10% beneficial owners timely filed the forms required under Section 16(a). ITEM 11. EXECUTIVE COMPENSATION REPORT OF EXECUTIVE COMPENSATION COMMITTEE Executive Compensation Philosophy --------------------------------- The primary objectives of the Executive Compensation Committee (the "Committee") of the Board of Directors in determining total compensation of the Company's executive officers are (i) to enable the Company to attract and retain high quality executives by providing total compensation opportunities with a combination of compensation elements which are at or above competitive opportunities and which provide for moderate fixed costs and leveraged incentive opportunities, and (ii) to align shareholder interests and executive rewards by providing substantial incentive opportunities to be earned by meeting pay-for-performance standards designed to increase long-term shareholder value. In order to accomplish these objectives, the Committee adopted in 1995 an executive compensation program which provides (i) annual base salaries at or near the market median, (ii) annual incentive opportunities which reward the executives for achieving or surpassing performance goals which represent industry norms of excellence, and (iii) long-term incentive opportunities which are directly related to increasing shareholder value. Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a limitation on the deductibility of nonperformance based compensation in excess of $1 million paid to certain executive officers. The Compensation Committee's policy with respect to Section 162(m) is to make every reasonable effort to ensure that compensation is deductible to the extent permitted, while simultaneously providing executives appropriate awards for their performance. The Company's long-term incentive plans have been designed to comply with the performance-based requirements of Section 162(m). Base Salaries and Annual Cash Incentives ---------------------------------------- The range of base salaries for the executive officers of the Company is established after a review by the Committee of the salaries paid to executive officers of a comparison group of other publicly traded real estate investment trusts. Other subjective factors are considered such as the individual's experience and performance. An annual cash incentive range is established for each executive officer at the beginning of the year. The actual annual cash incentive paid to each executive is determined based on his or her ability to impact measurable results. The amount of each executive's annual award is based on a combination of three performance factors: (i) overall corporate performance; (ii) business segment or departmental performance; and (iii) individual performance. The relative importance of each of the performance factors in determining annual cash incentives differs for each executive position with the performance factor for the most senior executives being based more heavily on overall corporate performance and the performance factor for the officers in-charge of business segments or departments being based more heavily on the performance of their segment or department. The overall corporate performance factor is based on a three-tier measurement system consisting of Funds from Operations Growth Per Common Share, Return on Shareholders' Equity and - 31 - Return on Real Estate Investments. The business segment performance is based on certain financial measurements, including the volume and yield of new acquisitions and developments, performance of the in-service property portfolio, and the business segment's operating income contribution to the Company. The amount of the targeted annual cash incentives paid is based on the perceived level of attainment of each of the measurements by the Committee. Long-Term Incentive Opportunities --------------------------------- The amount of long-term incentive awarded to officers and executives on an annual basis is determined at the discretion of the Committee but is tied to overall corporate and business segment performance, the participant's level of responsibility within the Company and the participant's individual performance. The long-term incentive opportunities consist of approximately two-thirds Stock Options ("Options") and Dividend Increase Units ("DIUs") and one-third Shareholder Value Grants. Stock Option and Dividend Increase Unit Plans --------------------------------------------- The objectives of the Stock Option and Dividend Increase Unit Plans are to provide executive officers with long-term incentive opportunities aligned with the shareholder benefits of an increased Common Share value and increased annual dividends. The number of Options and DIUs issued to each executive annually is set by the Committee based on the goal of providing approximately two-thirds of the total annual long-term incentive award through these plans. The Options and DIUs are for terms of no more than ten years. With certain limited exceptions, awards made under the Stock Option and Dividend Increase Unit Plans vest 20 percent per year over a five- year period. The Options may not be issued for less than the fair market value of the Company's Common Shares at the date of grant. The value of each DIU at the date of exercise will be determined by calculating the percentage of the Company's annualized dividend per share to the market value of one Common Share (the "Dividend Yield") at the date the DIU is granted and dividing the increase in the Company's annualized dividend from the date of grant to the date of exercise by such Dividend Yield. A DIU may be exercised by a participant only to the extent that such participant has exercised an Option to purchase a Common Share of the Company under an Option granted under the 1995 Stock Option Plan on the same date as the grant of the DIU. Shareholder Value Plan ---------------------- The objective of the Shareholder Value Plan is to provide executive officers with long-term incentive opportunities directly related to providing total shareholder return in excess of the median of independent market indices. The annual Shareholder Value Plan amount for each executive is set by the Committee with the goal of providing approximately one-third of the total long-term incentive award through this plan. The award vests entirely three years after the date of grant and the amount paid is based on the Company's total shareholder return for such three year period as compared to independent market indices. The independent market indices used for comparison are the S&P 500 Index and the NAREIT Equity REIT Total Return Index. The amount of the award payable may range from zero percent if both of the rankings of the comparable returns are less than the 50th percentile of both of the indices to 300 percent if the rankings of both of the comparable returns are in the 90th percentile or higher of both of the indices, with 100 percent of the award being payable at the 60th percentile. Compensation of Chief Executive Officer --------------------------------------- The compensation awarded to Mr. Hefner in 1998 consisted primarily of an annual base salary, an annual cash incentive award, and grants under the Company's long-term incentive plans. The total compensation paid to Mr. Hefner has historically resulted in total compensation that is below the comparable market - 32 - median but is considered appropriate in light of Mr. Hefner's substantial equity interest in the Company and his stock options held. Base Salary: ----------- The Committee intends to gradually increase Mr. Hefner's base salary with the intent that, by 1999, his base salary will be equal to 90 percent of the market median of a comparison group of thirteen other publicly traded real estate investment trusts. Mr. Hefner's annual base salary for 1998 was $195,000. Annual Cash Incentive: ---------------------- Under the Committee's executive compensation plan, Mr. Hefner is eligible for a targeted annual cash incentive bonus. The amount of Mr. Hefner's annual cash incentive bonus is determined solely upon overall corporate performance which is based on a three-tier measurement system consisting of Funds from Operations Growth Per Common Share, Return on Shareholders' Equity and Return on Real Estate Investments as compared to pre-determined target criteria established by the Committee. The amount of the targeted annual cash incentives paid is based on the level of attainment of each of the measurements as compared to the pre-determined targets. For 1998, the Company's FFO Growth was 18.13% per Common Share, its Return on Shareholders' Equity was 12.16% and its Return on Real Estate Investments was 9.59%. Based on these results versus the pre- determined targets established by the Committee, Mr. Hefner received an Annual Cash Incentive award of $250,000 for 1998. Long-Term Incentive Opportunity Award: ------------------------------------- Mr. Hefner is also eligible for a targeted long-term incentive award with a value equal to a percentage of his annual base salary. The long-term incentive opportunity award granted to Mr. Hefner in 1998 consisted of i) the grant of an option to purchase 18,960 Common Shares at a price of $24.25 per share, ii) the grant of 18,960 DIUs with a Dividend Yield of 4.95%, and iii) the award of a targeted amount of $66,667 under the Shareholder Value Plan. In January 1998, Mr. Hefner received a payment of $53,460 pursuant to a grant under the Shareholder Value Plan made in 1995. In February 1999, Mr. Hefner received a payment of $64,238 pursuant to a grant under the Shareholder Value Plan made in 1996. The payout percentages of these awards as determined by formulas contained in the plan were 178% and 214% for the grants made in 1995 and 1996, respectively. Stock Purchase Plans -------------------- In 1998, the Board of Directors adopted the Executive and Senior Officer Stock Purchase Plan of Duke Realty Investments, Inc. (the "Officer Stock Purchase Plan") and the Director Stock Purchase Plan of Duke Realty Investments, Inc. (the "Director Stock Purchase Plan"). The purpose of these plans is to more closely align officer and Director financial rewards with the financial rewards realized by Company shareholders, increase officer and Director motivation to manage the Company as equity owners, retain key employees and increase the ownership of Common Shares by officers and directors. On August 25, 1998, under the Officer Stock Purchase Plan, certain officers of the Company received options to purchase 1,231,215 Common Shares at $21.625 per share (the closing price of a Common Share on that date). On that same date, the officers exercised these options by purchasing 1,231,215 Common Shares from the Company at $21.625 per share. From August 26, 1998 through August 31, 1998, certain Directors of the Company purchased 402,335 Common Shares under the Director Stock Purchase Plan in the open market at an average price of $21.623 per share. All officers and Directors participating in the plans borrowed the entire purchase price of the shares from KeyBank, N.A. and are personally obligated to repay the loans. The Operating Partnership has unconditionally guaranteed the payment and performance obligations of the officers and Directors to KeyBank, N.A. Each participant is personally liable to the Operating Partnership for any payments made by the Operating Partnership under the guarantee as a result of default by such participant on their KeyBank, N.A. loan. - 33 - Salary Replacement Plan ----------------------- In January 1999, subject to shareholder approval, the Committee adopted the 1999 Salary Replacement Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. (the "Salary Replacement Plan"). The purpose of this plan is to encourage additional equity ownership in the Company by key officers. Under this plan, certain officers may elect to receive Options and DIUs in lieu of the receipt of all or a portion of their base salary, annual incentive bonus or Shareholder Value Plan payments. The number of Options and DIUs granted under the Salary Replacement Plan will be based on the amount of forgone compensation elected by a participant divided by the Committee's determination of the value of an Option/DIU. The exercise price of an option may not be less than the fair market value of the Company's Common Shares at the date of grant. All awards made under the Salary Replacement Plan will vest on the date of grant. Employment and Severance Agreements ----------------------------------- In April 1998, the Committee adopted the Duke Realty Severance Pay Plan. This plan provides for the payment of severance amounts to certain key officers if, within one year of a change in control of the Company, employment is terminated by the Company other than "for cause" or if an officer voluntarily terminates employment because of a reduction in the officer's pay or his forced relocation. A "Level One" participant will receive two times the sum of the compensation awarded to such terminated participant for the calendar year preceding the date of termination and a "Level Two" will receive one times his prior year compensation. The only participants of the plan at this time are Messrs. Burk, Chapman, Hefner, Horn, Linville, Oklak and Zink. The Committee has designated each of these participants as eligible for Level One benefits. COMPENSATION COMMITTEE Geoffrey Button, Chair Ngaire E. Cuneo James E. Rogers Jay J. Strauss L. Ben Lytle PERFORMANCE TABLE The following table compares, over the last five years, the cumulative total shareholder return on the Company's Common Shares with the cumulative total return of the S&P 500 Index, and the cumulative total return of the NAREIT Equity REIT Total Return Index. - 34 - COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN COMPANY COMMON SHARES, S&P 500 INDEX, AND NAREIT EQUITY REIT TOTAL RETURN INDEX *
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER 1993 1994 1995 1996 1997 1998 ---- ---- ---- ---- ---- ---- The Company 100.00 136.52 162.29 211.86 281.38 285.68 NAREIT 100.00 103.17 118.92 160.86 193.45 159.59 S&P 100.00 101.31 139.23 171.19 228.32 293.57
* Assumes that the value of the investment in the Company's Common Shares and each index was $100 on December 31, 1993 and that all dividends were reinvested. - 35 - COMPENSATION OF EXECUTIVE OFFICERS SUMMARY COMPENSATION TABLE The following table sets forth the compensation awarded, earned by, or paid to the Company's chief executive officer and the Company's six other most highly compensated executive officers (the "Named Executive Officers") during the last three fiscal years.
LONG-TERM LONG-TERM COMPENSATION COMPENSATION ANNUAL COMPENSATION AWARDS PAYMENTS ------------------- ------------ ------------ (1) (2) (3) SECURITIES SHAREHOLDER ALL OTHER NAME AND PRINCIPAL UNDERLYING VALUE PLAN COMPEN- POSITION YEAR SALARY BONUS OPTIONS PAYMENTS SATION - ------------------ ---- --------- --------- ----------- ----------- --------- Thomas L. Hefner 1998 $195,000 $250,000 76,763 $53,460 $7,676 President and 1997 175,000 200,000 13,010 0 3,200 Chief Executive Officer 1996 165,000 100,000 12,880 0 3,000 Richard W. Horn 1998 $175,000 $325,000 23,699 71,280 $9,204 Executive Vice President 1997 132,700 300,000 44,192 0 3,200 Office 1996 120,000 200,000 17,174 0 3,000 William E. Linville, III 1998 $175,000 $275,000 69,942 71,280 $4,800 Executive Vice President 1997 132,700 275,000 44,192 0 3,200 Industrial 1996 120,000 225,000 17,174 0 3,000 Gary A. Burk 1998 $175,000 $200,000 14,220 53,460 $4,800 President 1997 150,000 150,000 13,010 0 3,200 Construction 1996 150,000 75,000 12,880 0 3,000 Robert M. Chapman 1998 $175,000 $200,000 53,642 0 $3,311 Executive Vice President 1997 21,192 100,000 10,000 0 0 Acquisitions 1996 0 0 0 0 0 Dennis D. Oklak Executive Vice President, 1998 $175,000 $200,000 60,463 23,166 $4,800 Chief Administrative 1997 150,000 150,000 7,096 0 3,200 Officer and Treasurer 1996 140,000 85,000 7,872 0 3,000 Darell E. Zink, Jr. 1998 $175,000 $200,000 60,463 53,460 $4,800 Executive Vice President and 1997 150,000 150,000 13,010 0 3,200 Chief Financial Officer 1996 150,000 75,000 12,880 0 3,000
(1) Includes the following options that were granted in August, 1998 in connection with the Officer Stock Purchase Plan: Mr. Hefner 57,803; Mr. Linville 46,243; Mr. Chapman 34,682; Mr. Oklak 46,243; Mr. Zink 46,243. Under that plan, the participants were required to exercise the options the same day they were granted. The grant price and the exercise price were both equal to the fair market value of the Company's Common Shares on the date of grant. (2) Represents payments made under the Company's Shareholder Value Plan. (3) For Messrs. Hefner, Horn, Linville, Burk, Oklak and Zink, includes a $4,800 contribution by the Company to the Company's Profit Sharing and Salary Deferral Plan. For Mr. Chapman, a $2,625 Profit Sharing and Salary Deferral Plan contribution was made. Also includes discounts of $2,876, $ 4,404 and $686 received by Messrs. Hefner, Horn and Chapman, respectively, in connection with Common Shares purchased under the Company's Employee Stock Purchase Plan. - 36 - STOCK OPTION GRANTS IN 1998 The following table sets forth certain information for the Named Executive Officers relating to stock option grants during 1998 under the Company's 1995 Stock Option Plan.
INDIVIDUAL GRANTS ------------------------- POTENTIAL REALIZABLE % OF VALUE AT ASSUMED ANN. NUMBER OF TOTAL RATE OF STOCK PRICE SECURITIES OPTIONS APPRECIATION FOR UNDERLYING GRANTED TO EXERCISE OPTION TERM (1) OPTIONS EMPLOYEES PRICE PER EXPIRATION --------------------- NAME GRANTED IN 1998 SHARE DATE 5% 10% ---- ---------- ---------- ---------- --------- ---------- ---------- Thomas L. Hefner 18,960 1.1275% $24.250 1/28/08 $289,153 $732,771 (2) 57,803 3.4374% $21.625 8/25/98 $0 $0 Richard W. Horn 23,699 1.4093% $24.250 1/28/08 $361,426 $915,925 William E. Linville, III 23,699 1.4093% $24.250 1/28/08 $361,426 $915,925 (2) 46,243 2.7499% $21.625 8/25/98 $0 $0 Gary A. Burk 14,220 .8456% $24.250 1/28/08 $216,865 $549,578 Robert M. Chapman 18,960 1.1275% $24.250 1/28/08 $289,153 $732,771 (2) 34,682 2.0624% $21.625 8/25/98 $0 $0 Dennis D. Oklak 14,220 .8456% $24.250 1/28/08 $216,865 $549,578 (2) 46,243 2.7499% $21.625 8/25/98 $0 $0 Darell E. Zink, Jr. 14,220 .8456% $24.250 1/28/08 $216,865 $549,578 (2) 46,243 2.7499% $21.625 8/25/98 $0 $0
(1) The dollar amounts under these columns are the result of calculations at the 5% and 10% rates set by the Securities and Exchange Commission and, therefore, are not intended to forecast future appreciation of the Company's stock price. For the options expiring on January 28, 2008, the Company's per share stock price would be $39.50 and $62.90 if increased 5% and 10%, respectively, compounded annually over the 10-year option term. (2) These options were granted in connection with the Officer Stock Purchase Plan. Under that plan, the participants were required to exercise the options the same day they were granted. The grant price and the exercise price were each equal to the fair market value of one Common Share on the date of grant. The following table presents certain information for the Named Executive Officers relating to the exercise of stock options during 1998 and, in addition, information relating to the valuation of unexercised stock options. AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS ACQUIRED OPTIONS AT 12/31/98 AT 12/31/98 (1) ON VALUE ------------------------ ------------------------ NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- -------- -------- ----------- ------------- ----------- ------------- Thomas L. Hefner (2) 114,203 $ 669,750 100,459 42,503 $1,073,609 $138,143 Richard W. Horn 0 0 82,515 82,566 783,543 276,942 William E. Linville, III (2) 46,243 0 97,515 92,566 938,230 380,067 Gary A. Burk 42,300 518,175 114,559 37,763 1,233,997 138,143 Robert M. Chapman (2) 34,682 0 2,000 26,960 1,000 4,000 Dennis D. Oklak (2) 46,243 0 64,082 32,962 683,377 136,051 Darell E. Zink, Jr. (2) 167,022 1,374,697 36,080 37,763 370,657 138,143
(1) Based on the closing price of the Company's Common Shares on December 31, 1998 of $23.25. (2) Includes shares exercised in connection with the Officer Stock Purchase Plan for which no value was realized. - 37 - The following table sets forth awards to the Named Executive Officers in 1998 under the Company's Dividend Increase Unit Plan and Shareholder Value Plan.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR EST. FUTURE PAYOUTS NUMBER OF PERFORMANCE UNDER NON-STOCK SHARES, PERIOD PRICE-BASED-PLANS DUIS, OR UNTIL ----------------------- NAME OTHER RIGHTS PAYOUT THRESHOLD TARGET MAXIMUM - ---- ------------ ---------- --------- ------ ------- Thomas L. Hefner Dividend Increase Unit Plan (1) 18,960 DIUs N/A N/A N/A N/A Shareholder Value Plan (2) N/A 3 Years $0 $66,667 $200,000 Richard W. Horn Dividend Increase Unit Plan (1) 23,699 DIUs N/A N/A N/A N/A Shareholder Value Plan (2) N/A 3 Years $0 $83,333 $250,000 William E. Linville, III Dividend Increase Unit Plan (1) 23,699 DIUs N/A N/A N/A N/A Shareholder Value Plan (2) N/A 3 Years $0 $83,333 $250,000 Gary A. Burk Dividend Increase Unit Plan (1) 14,220 DIUs N/A N/A N/A N/A Shareholder Value Plan (2) N/A 3 Years $0 $50,000 $150,000 Robert M. Chapman Dividend Increase Unit Plan (1) 18,960 DIUs N/A N/A N/A N/A Shareholder Value Plan (2) N/A 3 Years $0 $66,667 $200,000 Dennis D. Oklak Dividend Increase Unit Plan (1) 14,220 DIUs N/A N/A N/A N/A Shareholder Value Plan (2) N/A 3 Years $0 $50,000 $150,000 Darell E. Zink, Jr. Dividend Increase Unit Plan (1) 14,220 DIUs N/A N/A N/A N/A Shareholder Value Plan (2) N/A 3 Years $0 $50,000 $150,000
(1) Under the 1995 Dividend Increase Unit Plan, DIUs are granted to key employees. DIUs vest over a five-year period at 20% per year. A participant may exercise DIUs only to the extent that such participant has purchased a Common Share pursuant to an option granted under the 1995 Stock Option Plan on the same date as the grant of the DIU. The value of each DIU at the date of exercise is determined by calculating the Dividend Yield at the date the DIU is granted and dividing the increase in the Company's annualized dividend from the date of grant to the date of exercise by such Dividend Yield. DIUs not exercised within 10 years of the date of grant are forfeited. Distribution of a participant's benefits under the 1995 Dividend Increase Unit Plan will be made in a single lump sum payment in the form of the Company's Common Shares. The "In-the-Money" value of vested DIUs at December 31, 1998 for these executives was $104,402 for Messrs. Hefner, Zink and Burk, $178,247 for Messrs. Horn and Linville, $6,936 for Mr. Chapman and $52,841 for Mr. Oklak. (2) Under the 1995 Shareholder Value Plan, awards are granted in specified dollar amounts to selected key employees. The specified award is payable to the participant on the third anniversary of the grant of the award. The actual payments under the plan will be determined based upon the Company's cumulative total shareholder return for the three year period beginning on the date of grant as compared to the cumulative total return for the S&P 500 Index and the NAREIT Equity REIT Total Return Index (the "Indices") for the same period. The Company's cumulative total shareholder return is calculated by determining the average per share closing price of the Company's Common Shares for the 30 day period preceding the end of the three year period increased by an amount that would be realized if all cash dividends paid during the three year period were reinvested in Common Shares of the Company and comparing this amount to the average per share closing price of the Company's Common Shares for the 30 day period preceding the date of grant. The payment of one-half of the bonus award is adjusted based upon the percentile ranking of the Company's cumulative total shareholder return as compared to each of the Indices for the same period. The payment adjustment may range from zero percent of the amount awarded if both of the rankings of the comparable returns are less than the 50th percentile of both of the Indices to 300 percent of the amount awarded if both of the rankings are in the 90th percentile or higher of both of the Indices, with 100 percent of the award being payable at the 60th percentile. Distribution of a participant's adjusted bonus award at the end of the three-year period after the date of grant will be made one-half in cash and one-half in the form of Common Shares of the Company. The amount of the awards payable to these executives on December 31, 1998 was $64,238 for Messrs. Hefner, Zink, and Burk, $85,650 for Messrs. Linville and Horn, and $39,256 for Mr. Oklak. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Ms. Cuneo, Mr. Lytle and Mr. Strauss serve on the Company's Executive Compensation Committee. The Company contracted with an affiliate of Conseco, Inc. during 1998 for certain construction and insurance related services. Ms. Cuneo is an Executive Vice President and director of Conseco, Inc. In 1998, the Company received $561,000 in construction related fees from a Conseco, Inc. affiliate and paid a Conseco, Inc. affiliate $1,522,000 in insurance premiums. The Company leases office space to affiliates of Anthem, Inc. Mr. Lytle is Chairman, President and Chief Executive Officer of Anthem, Inc. Under the leases, which have lease rates comparable to similar space in the area, the Company received total rental income of $1,756,000 in 1998. In connection with the acquisition of an eight building portfolio of properties with a total purchase price of $16.2 million, the Company paid Regent Realty Group, Inc. a commission of $117,000. Mr. Strauss is Chairman and Chief Executive Officer of Regent Realty Group, Inc. - 38 - ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The Company has one class of voting common stock outstanding of which 86,690,489 shares ("Common Shares") were outstanding as of the close of business on March 1, 1999. The following table shows, as of March 1, 1999, the number and percentage of Common Shares and limited partnership interests ("Units") in Duke Realty Limited Partnership ("DRLP"), an affiliate of the Company, held by (i) all directors and nominees, (ii) each person known to the Company who beneficially owned more than five percent of the issued and outstanding Common Shares, and (iii) certain executive officers. Each Unit is convertible into one Common Share at the option of the holder. The total number of Common Shares and Units (other than Units owned by the Company) outstanding as of the close of business on March 1, 1999 was 97,522,041.
EFFECTIVE ECONOMIC AMOUNT AND NATURE % OF ALL % OF ALL OWNERSHIP OF BENEFICIAL OF BENEFICIAL COMMON COMMON SHARES/ DIRECTORS AND OWNER OWNERSHIP SHARES(1) UNITS (2) EXEC. OFFICERS (3) - --------------- ----------------- --------- ------------- ------------------ Thomas L. Hefner 3,357,664 (4) 3.74% 3.43% 1,644,695 Darell E. Zink, Jr. 3,359,661 (5) 3.76% 3.44% 1,722,709 Daniel C. Staton 3,291,560 (6) 3.69% 3.37% 1,677,983 John W. Wynne 3,413,113 (7) 3.84% 3.50% 1,592,191 Edward T. Baur 1,552,123 (8) 1.76% 1.59% 1,119,744 Gary A. Burk 2,501,111 (9) 2.81% 2.56% 520,869 William E. Linville, III 203,254 (10) (16) (16) 86,726 Richard W. Horn 187,616 (11) (16) (16) 91,088 Dennis D. Oklak 150,630 (12) (16) (16) 77,711 Robert M. Chapman 42,158 (16) (16) 36,366 Geoffrey Button 41,677 (16) (16) 34,177 Ngaire E. Cuneo 65,046 (16) (16) 59,046 Howard L. Feinsand 85,290 (16) (16) 77,790 L. Ben Lytle 17,952 (16) (16) 13,452 John D. Peterson 56,280 (13) (16) (16) 48,780 James E. Rogers 81,387 (16) (16) 75,387 Jay J. Strauss 62,411 (14) (16) (16) 54,911 FMR Corp. 8,005,744 (15) 9.23% 8.21% N/A Directors and Executive Officers as a Group (19 persons) 9,724,149 10.54% 9.90% 9,013,317
- 39 - (1) Assumes that the only Units exchanged for Common Shares are those owned by such beneficial owner. (2) Assumes the exchange of all outstanding Units for Common Shares. (3) Reflects Common Shares and Units beneficially owned by Directors and executive officers, including their proportionate economic interest in Common Shares and Units owned by family members and various entities. Excludes any beneficial interest in stock options. (4) Includes 649,229 Common Shares owned by Mr. Hefner, members of his family and Hefner Family Investors Limited Partnership. Also includes the following Units: (i) 579,506 Units owned directly by Mr. Hefner; and (ii) 2,008,500 Units owned by DMI Partnership, a partnership in which Mr. Hefner owns a 20.71% beneficial interest. (5) Includes 745,235 Common Shares owned by Mr. Zink, members of his family, the Zink Family Foundation and the Zink Family Limited Partnership. Also includes the following Units: (i) 561,514 Units owned directly by Mr. Zink; and (ii) 2,008,500 Units owned by DMI Partnership, a partnership in which Mr. Zink owns a 20.71% beneficial interest. (6) Includes 863,045 Common Shares owned by Mr. Staton and the following Units: (i) 398,978 Units owned directly by Mr. Staton; and (ii) 2,008,500 Units owned by DMI Partnership, a partnership in which Mr. Staton owns a 20.71% beneficial interest. (7) Includes: (i) 965,545 Common Shares owned by Mr. Wynne, members of his family and the Wynne Family Trust; and (ii) 171,982 Common Shares owned as trustee under the Phillip R. Duke Irrevocable Trust in which Mr. Wynne disclaims any beneficial interest. Also includes the following Units: (i) 210,686 Units owned directly by Mr. Wynne; and (ii) 2,008,500 Units owned by DMI Partnership, a partnership in which Mr. Wynne owns a 20.71% beneficial interest. (8) Includes 13,145 Common Shares owned by Mr. Baur and the following Units: (i) 330,148 Units owned directly by Mr. Baur; (ii) 120,000 Units owned by Mr. Baur's spouse; and (iii) 1,086,934 Units owned by Lindbergh-Warson Properties, Inc., a corporation in which Mr. Baur owns a 60.4% beneficial interest. (9) Includes: 214,252 Common Shares owned by Mr. Burk and his spouse and the following Units: (i) 155,778 Units owned directly by Mr. Burk; and (ii) 2,008,500 Units owned by DMI Partnership, a partnership in which Mr. Burk owns a 7.51% beneficial interest. (10) Includes 77,088 Common Shares owned by Mr. Linville and his family. Also includes 9,638 Units beneficially owned by Mr. Linville under an agreement with a partnership owned by certain other executive officers. (11) Includes 84,442 Common Shares owned by Mr. Horn and his spouse. Also includes 6,646 Units beneficially owned by Mr. Horn under an agreement with a partnership owned by certain other executive officers. (12) Includes 69,731 Common Shares owned by Mr. Oklak. Also includes 7,980 Units beneficially owned by Mr. Oklak under an agreement with a partnership owned by certain other executive officers. (13) Includes: (i) 18,098 Common Shares owned by Mr. Peterson and members of his family; (ii) 10,400 Common Shares owned by Mr. Peterson as Trustee for the Peterson Family GST Investment Share Trust; (iii) 14,282 Common Shares owned for investment purposes by City Securities Corporation, a firm in which Mr. Peterson serves as Chairman of the Board and Chief Executive Officer; and (iv) 6,000 Common Shares owned by Mr. Peterson as Trustee for the Peterson Family Trusts. (14) Includes: (i) 49,511 shares owned by Mr. Strauss and his spouse, and (ii) 5,400 shares held in a trust in which Mr. Strauss' family members are beneficiaries. (15) Share amount as reported on Schedule 13G filed with the Securities and Exchange Commission on February 12, 1999. Address: 82 Devonshire Street, Boston, Massachusetts 02109. Includes (i) 6,244,844 shares beneficially owned by Fidelity Management & Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp., which holds such shares for investment advisory clients, (ii) 6,244,844 shares beneficially owned by Edward C. Johnson III, Chairman of FMR Corp., and FMR Corp., through its control of Fidelity, and each is deemed to have sole power to dispose of such shares, (iii) 1,760,900 shares beneficially owned by Fidelity Management Trust Company ("Fidelity Management"), a wholly- owned subsidiary of FMR Corp., which holds such shares as investment manager of certain institutional accounts, and (iv) 1,760,900 shares beneficially owned by Mr. Johnson and FMR Corp., through its control of Fidelity Management, of which each is deemed to have sole voting and dispositive power over 1,668,500 of such shares and sole dispositive but no voting power over the remaining 92,400 shares. Neither FMR Corp. nor Mr. Johnson has the sole power to vote or direct the voting of the shares owned directly by the Fidelity funds, which power resides with such funds' Board of Trustees and Fidelity carries out the voting of the shares under guidelines established by such Board of Trustees. (16) Represents less than 1% of the outstanding Common Shares. - 40 - ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS A wholly owned subsidiary of the Company is the sole general partner of Duke Realty Services Limited Partnership (the "Services Partnership"), which is in turn the sole general partner of Duke Construction Limited Partnership (the "Construction Partnership"). The operations of these entities are included in the consolidated financial statements of the Company. The Services Partnership provides third-party property management, leasing, construction management and development services and the Construction Partnership provides third-party construction services. Certain of the executive officers own limited partnership interests in these entities. Thomas L. Hefner, Daniel C. Staton, Darell E. Zink, Jr., John W. Wynne, Gary A. Burk and David R. Mennel, all of whom are officers or Directors of the Company, control DMI Partnership ("DMI"), which owns ninety percent of the capital interests of the Services Partnership and a profits interest which varies from ten percent to ninety percent. The share of net income of the Services Partnership allocated to DMI in 1998 was $1,211,000. DMI's share of net income from the Services Partnership is included in minority interest in the Company's financial statements. The Company has an option to acquire DMI's interest in the Services Partnership in exchange for 833,334 Common Shares. The Company is required to purchase DMI's interest in the Services Partnership for 833,334 Common Shares upon a change in control of the Company or the dissolution of DRLP. DMI also indirectly owns a ninety-five percent limited partnership interest in the Construction Partnership, which the Company has the option to purchase for $1,000. The Construction Partnership has a deficit cumulative capital balance; thus there was no allocation of net income to any of the partners of the Construction Partnership, including DMI. The Services Partnership and the Construction Partnership provide property management, leasing, construction and other tenant related services to properties in which Messrs. Hefner, Staton, Zink, Wynne, Burk and Mennel have ownership interests. The Company has an option to acquire these executive officers' interests in these properties (the "Option Properties"). In 1998, the Services Partnership and the Construction Partnership received fees of $2,247,000 for services provided to the Option Properties. The fees charged by the Services Partnership and the Construction Partnership for such services are equivalent to those charged to other third-party owners for similar services except for one property. Pursuant to an agreement with this property's lender, the payment of 75% of the fees was deferred and payable only from excess sale or refinancing proceeds. The Company agreed to this deferral in 1997 in order to retain certain contracts for services provided to other properties owned by the lender. In 1998, the Company acquired this loan from the third party lender and all such deferred fees have been paid. The Company also leased operating facilities in certain of the Option Properties. In 1998, the aggregate rent under such leases was approximately $21,309. The rental amount paid is comparable to similar space in the area. The Operating Partnership has a $20.0 million loan to the Services Partnership, which requires interest only payments at 12% through September 2003. The loan then amortizes over a 15-year period with interest at 12% until final maturity in September 2018. The loan is guaranteed by an entity owned indirectly by Messrs. Hefner, Staton, Zink, Wynne, Burk and Mennel. The Operating Partnership also provides working capital financing to the Services Partnership at a rate of prime plus 1%. Messrs. Hefner, Staton, Zink, Wynne, Burk and Mennel, as well as Edward T. Baur, a Director of the Company, and a corporation controlled by Mr. Baur, have personal guarantees for $65.5 million of the Company's debt. The Operating Partnership has indemnified them from any liability with respect to such debt. The Company contracts with Steel Frame Erectors, Inc. ("SFE"), an entity owned by Messrs. Hefner, Staton, Zink, Wynne, Burk and Mennel, for certain construction-related services. During 1998, the total costs under these contracts for Company related projects were $1,396,000. The construction fees earned by SFE on Company related projects were $43,000. A 50% owned subsidiary of SFE leases space in an office building from a limited liability company partially owned by the Company. The subsidiary paid $294,000 under this lease in 1998. In May 1998 and January 1999, a partnership 70% owned by Edward T. Baur contributed land and a building to the Company in return for 101,849 Units of DRLP with a value of $2.3 million and the assumption of $1.4 million in indebtedness. - 41 - Part IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (A) DOCUMENTS FILED AS PART OF THIS REPORT 1. CONSOLIDATED FINANCIAL STATEMENTS: The following Consolidated Financial Statements of the Company, together with the Independent Auditor's Report, are listed below: Independent Auditors' Report Consolidated Balance Sheets, December 31, 1998 and 1997 Consolidated Statements of Operations, Years Ended December 31, 1998, 1997 and 1996 Consolidated Statements of Cash Flows, Years Ended December 31, 1998, 1997 and 1996 Consolidated Statements of Shareholders' Equity, Years Ended December 31, 1998, 1997 and 1996 Notes to Consolidated Financial Statements 2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES Schedule III - Real Estate and Accumulated Depreciation - 42 - INDEPENDENT AUDITORS' REPORT The Shareholders and Directors of Duke Realty Investments, Inc.: We have audited the consolidated financial statements of Duke Realty Investments, Inc. and Subsidiaries as listed in the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Duke Realty Investments, Inc. and Subsidiaries as of December 31, 1998 and 1997, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1998, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG LLP Indianapolis, Indiana January 26, 1999 (except as to note 12, which is as of March 1, 1999) - 43 -
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1998 1997 ---- ---- ASSETS ------ Real estate investments: Land and improvements $ 312,022 $ 231,614 Buildings and tenant improvements 2,091,757 1,591,604 Construction in progress 185,950 107,242 Investments in unconsolidated companies 125,746 106,450 Land held for development 146,911 139,817 --------- --------- 2,862,386 2,176,727 Accumulated depreciation (179,887) (116,264) --------- --------- Net real estate investments 2,682,499 2,060,463 Cash and cash equivalents 6,950 10,353 Accounts receivable, net of allowance of $896 and $420 9,641 5,932 Straight-line rent receivable, net of allowance of $841 20,332 14,746 Receivables on construction contracts 29,162 22,700 Deferred financing costs, net of accumulated amortization of $11,754 and $9,101 11,382 12,386 Deferred leasing and other costs, net of accumulated amortization of $16,838 and $9,251 53,281 34,369 Escrow deposits and other assets 40,406 15,265 --------- --------- $2,853,653 $2,176,214 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Indebtedness: Secured debt $ 326,317 $ 367,119 Unsecured notes 590,000 340,000 Unsecured line of credit 91,000 13,000 --------- --------- 1,007,317 720,119 Construction payables and amounts due subcontractors 55,012 40,786 Accounts payable 4,836 1,342 Accrued expenses: Real estate taxes 36,075 25,203 Interest 10,329 6,883 Other 22,781 13,848 Other liabilities 21,928 11,720 Tenant security deposits and prepaid rents 18,534 14,268 --------- --------- Total liabilities 1,176,812 834,169 --------- --------- Minority interest 106,729 107,364 --------- --------- Shareholders' equity: Preferred shares and paid-in capital ($.01 par value); 5,000 shares authorized 347,798 218,338 Common shares and paid-in capital ($.01 par value); 150,000 shares authorized; 86,053 and 76,065 shares issued and outstanding 1,290,313 1,071,990 Distributions in excess of net income (67,999) (55,647) --------- --------- Total shareholders' equity 1,570,112 1,234,681 --------- --------- $2,853,653 $2,176,214 ========= =========
See accompanying Notes to Consolidated Financial Statements. - 44 -
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1998 1997 1996 ---- ---- ---- RENTAL OPERATIONS: Revenues: Rental income $337,768 $220,970 $156,392 Equity in earnings of unconsolidated companies 10,857 8,732 5,768 ------- ------- ------- 348,625 229,702 162,160 ------- ------- ------- Operating expenses: Rental expenses 59,769 40,375 29,669 Real estate taxes 33,906 20,485 14,244 Interest expense 60,217 40,296 32,552 Depreciation and amortization 68,766 44,806 31,363 ------- ------- ------- 222,658 145,962 107,828 ------- ------- ------- Earnings from rental operations 125,967 83,740 54,332 ------- ------- ------- SERVICE OPERATIONS: Revenues: Property management, maintenance and leasing fees 13,189 12,799 11,496 Construction management and development fees 10,417 8,646 6,895 Other income 1,110 933 1,538 ------- ------- ------- 24,716 22,378 19,929 ------- ------- ------- Operating expenses: Payroll 12,453 10,761 9,176 Maintenance 2,451 2,009 1,526 Office and other 2,617 2,455 2,791 ------- ------- ------- 17,521 15,225 13,493 ------- ------- ------- Earnings from service operations 7,195 7,153 6,436 ------- ------- ------- General and administrative expense (11,573) (6,530) (4,719) ------- ------- ------- Operating income 121,589 84,363 56,049 OTHER INCOME (EXPENSE): Interest income 1,562 2,174 1,194 Earnings from property sales 1,351 1,775 4,532 Other expense (305) (1,083) (174) Minority interest in earnings of unitholders (12,241) (7,574) (7,184) Other minority interest in earnings of subsidiaries (1,252) (1,171) (986) ------- ------- ------- Net income 110,704 78,484 53,431 Dividends on preferred shares (19,833) (12,485) (2,559) ------- ------- ------- Net income available for common shares $ 90,871 $ 65,999 $ 50,872 ======= ======= ======= Net income per common share: Basic $ 1.13 $ .99 $ .91 ======= ======= ======= Diluted $ 1.12 $ .98 $ .90 ======= ======= ======= Weighted average number of common shares outstanding 80,704 66,427 56,134 ======= ======= ======= Weighted average number of common and dilutive potential common shares outstanding 92,468 74,993 64,398 ======= ======= =======
See accompanying Notes to Consolidated Financial Statements. - 45 -
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 (IN THOUSANDS) 1998 1997 1996 ---- ---- ---- Cash flows from operating activities: Net income $110,704 $ 78,484 $53,431 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of buildings and tenant improvements 61,414 39,771 27,568 Amortization of deferred leasing and other costs 7,352 5,035 3,795 Amortization of deferred financing costs 1,362 1,368 1,208 Minority interest in earnings 13,493 8,745 8,170 Straight-line rent adjustment (5,794) (4,469) (3,536) Earnings from property sales (1,351) (1,775) (4,532) Construction contracts, net 7,764 7,778 (1,640) Other accrued revenues and expenses, net 31,765 29,793 12,620 Equity in earnings in excess of operating distributions received from unconsolidated companies (5,521) (5,535) (1,949) ------- ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 221,188 159,195 95,135 ------- ------- ------- Cash flows from investing activities: Development of real estate investments (279,391) (195,088) (130,300) Acquisition of rental real estate investments (301,151) (324,203) (182,024) Acquisition of land held for development and infrastructure costs (53,736) (101,220) (16,122) Recurring tenant improvements (10,785) (7,985) (6,048) Recurring leasing costs (6,655) (5,057) (3,032) Recurring building improvements (2,206) (1,211) (780) Other deferred leasing costs (19,180) (14,000) (7,308) Other deferred costs and other assets (11,047) (8,894) 7,069 Proceeds from property sales, net 9,071 32,560 50,844 Distributions received from unconsolidated companies - 60,000 12,423 Net investment in and advances to unconsolidated companies (28,734) (32,226) (1,470) ------- ------- ------- NET CASH USED BY INVESTING ACTIVITIES (703,814) (597,324) (276,748) ======= ======= ======= Cash flows from financing activities: Proceeds from issuance of common shares, net 211,478 321,239 130,799 Proceeds from issuance of preferred shares, net 129,460 146,050 72,288 Proceeds from indebtedness 250,000 100,000 142,200 Payments on indebtedness including principal amortization (49,997) (9,999) (84,677) Borrowings (repayments) on lines of credit, net 78,000 (14,000) (11,000) Distributions to common shareholders (103,223) (73,183) (56,163) Distributions to preferred shareholders (19,833) (12,485) (1,991) Distributions to minority interest (15,018) (10,184) (8,719) Deferred financing costs (1,644) (4,290) (1,517) ------- ------- ------- NET CASH PROVIDED BY FINANCING ACTIVITIES 479,223 443,148 181,220 ------- ------- ------- NET INCREASE (DECREASE) IN CASH (3,403) 5,019 (393) Cash and cash equivalents at beginning of year 10,353 5,334 5,727 ------- ------- ------- Cash and cash equivalents at end of year $ 6,950 $ 10,353 $ 5,334 ======= ======= ======= Other non-cash items: Assumption of debt for real estate acquisitions $ 9,195 $118,303 $ 24,472 ======= ======= ======= Contributions of property to unconsolidated companies $ 1,040 $ 49,381 $ 20,649 ======= ======= ======= Conversion of Limited Partner Units to shares $ 6,598 $ 19,446 $ 21,627 ======= ======= ======= Issuance of Limited Partner Units for real estate acquisitions $ 2,038 $ 95,720 $ 8,896 ======= ======= =======
See accompanying Notes to Consolidated Financial Statements. - 46 -
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (IN THOUSANDS, EXCEPT PER SHARE DATA) Common Preferred Shares Distributions Shares and and Paid-in in Excess of Paid-in Capital Capital Net Income Total --------------- ----------- ----------- ------------ BALANCE AT DECEMBER 31, 1995 $ - $ 578,529 $ (43,740) $ 534,789 Issuance of common shares, net of under- writing discounts and related costs of $7,299 - 130,951 - 130,951 Issuance of preferred shares, net of under- writing discounts and related costs of $2,712 72,288 - - 72,288 Acquisition of minority interest - 21,627 - 21,627 Net income - - 53,431 53,431 Distributions to preferred shareholders - - (1,991) (1,991) Distributions to common shareholders ($1.00 per share) - - (56,163) (56,163) ------- --------- ------ --------- BALANCE AT DECEMBER 31, 1996 72,288 731,107 (48,463) 754,932 Issuance of common shares, net of under- writing discounts and related costs of $16,920 - 321,437 - 321,437 Issuance of preferred shares, net of under- writing discounts and related costs of $3,950 146,050 - - 146,050 Acquisition of minority interest - 19,446 - 19,446 Net income - - 78,484 78,484 Distributions to preferred shareholders - - (12,485) (12,485) Distributions to common shareholders ($1.10 per share) - - (73,183) (73,183) ------- --------- --------- --------- BALANCE AT DECEMBER 31, 1997 218,338 1,071,990 (55,647) 1,234,681 Issuance of common shares, net of under- writing discounts and related costs of $8,325 - 211,725 - 211,725 Issuance of preferred shares, net of under- writing discounts and related costs of $5,540 129,460 - - 129,460 Acquisition of minority interest - 6,598 - 6,598 Net income - - 110,704 110,704 Distributions to preferred shareholders - - (19,833) (19,833) Distributions to common shareholders ($1.28 per share) - - (103,223) (103,223) ------- --------- ------- --------- BALANCE AT DECEMBER 31, 1998 $347,798 $1,290,313 $ (67,999) $1,570,112 ======= ========= ======= =========
See accompanying Notes to Consolidated Financial Statements. - 47 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (1) THE COMPANY ---------- The Company owns and operates a portfolio of industrial, office and retail properties in the Midwest. The Company's primary markets are Indianapolis, Indiana; Cincinnati, Cleveland and Columbus, Ohio; St. Louis, Missouri; Chicago, Illinois; Minneapolis, Minnesota and Nashville, Tennessee. The Company qualifies as a real estate investment trust ("REIT") under the provisions of the Internal Revenue Code. The Company's rental operations are conducted through Duke Realty Limited Partnership ("DRLP"), of which the Company owns 88.9% at December 31, 1998. The remaining interests in DRLP ("Limited Partner Units") are exchangeable by the unitholders for shares of the Company's common stock on a one-for-one basis. The Company conducts its service operations through Duke Realty Services Limited Partnership and Duke Construction Limited Partnership, in which the Company's wholly-owned subsidiary, Duke Services, Inc., is the sole general partner. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ------------------------------------------- PRINCIPLES OF CONSOLIDATION --------------------------- The consolidated financial statements include the accounts of the Company and its majority-owned or controlled subsidiaries. The equity interests in these majority-owned or controlled subsidiaries not owned by the Company are reflected as minority interests in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. RECLASSIFICATIONS ----------------- Certain 1997 and 1996 balances have been reclassified to conform to 1998 presentation. STOCK SPLIT ----------- All shares and per share amounts have been adjusted to reflect the Company's two-for-one stock split effected in August 1997. REAL ESTATE INVESTMENTS ----------------------- Real estate investments are stated at the lower of cost less accumulated depreciation or fair value if impairment is identified. Buildings and land improvements are depreciated on the straight-line method over 40 and 15 years, respectively, and tenant improvement costs are depreciated on the straight-line method over the term of the related lease. All direct and indirect costs, including interest and real estate taxes clearly associated with the development, construction or expansion of real estate investments are capitalized as a cost of the property. All external costs associated with the acquisition of real estate investments are capitalized as a cost of the property. The Company evaluates its real estate investments upon occurrence of significant changes in the operations, but not less than annually, to assess whether any impairment indications are present, including recurring operating losses and significant adverse changes in legal factors or business climate that affect the - 48 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements recovery of the recorded value. If any real estate investment is considered impaired, a loss is provided to reduce the carrying value of the property to its estimated fair value. The acquisitions of minority interests are recorded under the purchase method with assets acquired reflected at the fair market value of the Company's common stock on the date of acquisition, net of the retirement of any minority interest liabilities. The acquisition amounts are allocated to rental property based on their estimated fair values. The Company has equity interests in unconsolidated partnerships and joint ventures which own and operate rental properties and hold land for development in the Midwest. The equity method of accounting is used for these investments in which the Company has the ability to exercise significant influence over operating and financial policies. Any difference between the carrying amount of these investments and the underlying equity in net assets is amortized to equity in earnings of unconsolidated companies over 40 years. CASH EQUIVALENTS ---------------- Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents. DEFERRED COSTS -------------- Costs incurred in connection with obtaining financing are amortized to interest expense on the straight-line method over the term of the related loan. All direct and indirect costs associated with the rental of real estate investments owned by the Company are amortized over the term of the related lease. Unamortized costs are charged to expense upon the early termination of the lease or upon early payment of the financing. Prepaid interest is amortized to interest expense using the effective interest method over the terms of the related loans. REVENUES -------- Rental Operations ----------------- Rental income from leases with scheduled rental increases during their terms is recognized on a straight-line basis. Service Operations ------------------ Management fees are based on a percentage of rental receipts of properties managed and are recognized as the rental receipts are collected. Maintenance fees are based upon established hourly rates and are recognized as the services are performed. Leasing fees are based on a percentage of the total rental due under completed leases and are generally recognized upon lease execution. Construction management and development fees are generally based on a percentage of costs and are recognized as incurred. - 49 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NET INCOME PER COMMON SHARE --------------------------- Basic net income per common share is computed by dividing net income available for common shares by the weighted average number of common shares outstanding for the period. Diluted net income per share is computed by dividing the sum of net income available for common shares and minority interest in earnings of unitholders, by the sum of the weighted average number of common shares and dilutive potential common shares outstanding for the period. The following table reconciles the components of basic and diluted net income per share:
1998 1997 1996 ------ ------ ------ Basic net income available for common shares $ 90,871 $65,999 $50,872 Minority interest in earnings of unitholders 12,241 7,574 7,184 ------- ------ ------ Diluted net income available for common shares and dilutive potential shares $103,112 $73,573 $58,056 ======= ====== ====== Weighted average number of common shares outstanding 80,704 66,427 56,134 Weighted average partnership units outstanding 10,872 7,715 7,826 Dilutive shares for long-term compensation plans 892 851 438 ------- ------ ------ Weighted average number of common shares and dilutive potential common shares 92,468 74,993 64,398 ======= ====== ======
The Preferred D Series Convertible stock was anti-dilutive in 1998; therefore, no conversion to common shares is included in weighted shares outstanding at December 31, 1998. FEDERAL INCOME TAXES -------------------- As a REIT, the Company is allowed to reduce taxable income by all or a portion of its distributions to shareholders. As deductible distributions have exceeded taxable income, no provision for federal income taxes has been made in the accompanying consolidated financial statements. Earnings and profits, which determine the taxability of dividends to shareholders, differ from reported net income primarily because of different depreciable lives and bases of rental properties and differences in the timing of recognition of earnings upon disposition of properties. A summary of the taxable nature of the Company's dividends for the three years ended December 31 is as follows:
1998 1997 1996 ---- ---- ---- Total dividends per share $1.28 $1.10 $1.00 ==== ==== ==== Percent taxable as ordinary income 96.33% 100.00% 99.10% Percent taxable as long-term capital gains - - - Percent non-taxable as return of capital 3.67% - .90% ------- ------- ------- 100.00% 100.00% 100.00% ======= ======= =======
Dividends per share of $1.09, $.97 and $.89 were required for the Company to maintain its REIT status in 1998, 1997 and 1996, respectively. - 50 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements FAIR VALUE OF FINANCIAL INSTRUMENTS ----------------------------------- The fair values of the Company's financial instruments are generally calculated as the present value of estimated future cash flows using a discount rate commensurate with the risks involved and approximate their carrying or contract values. DERIVATIVE FINANCIAL INSTRUMENTS -------------------------------- The Company enters into derivative financial instruments such as interest rate swaps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. These derivative financial instruments are designated as hedges and deferral accounting is applied as the derivative financial instrument reduces exposure to interest rate risk. Gains and losses on derivative financial instruments are amortized to interest expense over the term of the hedged instrument. Amounts paid or received on interest rate swaps are included in interest expense. USE OF ESTIMATES ---------------- The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. (3) RELATED PARTY TRANSACTIONS -------------------------- The Company provides management, leasing, construction and other tenant related services to partnerships in which certain executive officers have continuing ownership interests. The Company was paid fees totaling $2.3 million, $3.3 million and $3.2 million for such services in 1998, 1997 and 1996, respectively. Management believes the terms for such services are equivalent to those available in the market. The Company has an option to purchase the executive officers' interest in each of these properties which expires October 2003. The option price of each property was established at the date the options were granted. (4) INVESTMENTS IN UNCONSOLIDATED COMPANIES --------------------------------------- Combined summarized financial information of the companies which are accounted for by the equity method as of December 31, 1998 and 1997 and for the years ended December 31, 1998, 1997, and 1996 are as follows (in thousands):
1998 1997 1996 ---- ---- ---- Land, buildings and tenant improvements, net $377,152 $322,799 Land held for development 15,136 14,261 Other assets 35,615 10,707 ------- ------- $427,903 $347,767 ======= ======= Property indebtedness $111,165 $ 94,982 Other liabilities 34,221 12,866 ------- ------- 145,386 107,848 Owners' equity 282,517 239,919 ------- ------- $427,903 $347,767 ======= ======= Rental income $ 52,703 $ 29,709 $21,880 ======= ======= ====== Net income $ 19,753 $ 12,481 $ 9,761 ======= ======= ======
- 51 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (5) INDEBTEDNESS ------------ Indebtedness at December 31 consists of the following (in thousands):
1998 1997 ------ ------ Fixed rate secured debt, weighted average interest rate of 8.09% at December 31, 1998, maturity dates ranging from 1999 to 2017 $ 285,892 $334,239 Variable rate secured debt, weighted average interest rate of 5.58% at December 31, 1998, maturity dates ranging from Demand to 2025 40,425 32,880 Unsecured notes, weighted average interest rate of 7.19% at December 31, 1998, maturity dates ranging from 2000 to 2028 590,000 340,000 Unsecured line of credit, interest rate of 6.43% at December 31, 1998, maturity date of 2001 91,000 13,000 --------- ------- $1,007,317 $720,119 ========= =======
As of December 31, 1998, the $326.3 million of secured debt is collateralized by rental properties with a net carrying value of $515.7 million. The Company's unsecured LOC is used to fund development and acquisition of additional rental properties and to provide working capital as needed. In 1998, the Company increased the amount available under the LOC to $450 million and maintained the borrowing rate of LIBOR plus .80%. As part of the current LOC agreement, the Company has the option to obtain borrowings from the financial institutions which participate in the LOC at rates lower than LIBOR plus .80%, subject to certain restrictions. All amounts outstanding on the unsecured LOC at December 31, 1998 are at LIBOR plus .80% (effective rate of 6.43%). The unsecured line of credit matures in April 2001. The Company entered into a $75.0 million forward Treasury Lock Agreement (the "Treasury Lock") in 1997 to fix the effective interest rate of a debt financing by the Company. The Company paid $575,000 in 1998 to settle the Treasury Lock in conjunction with the closing of the financing. The amount is being treated as a hedge and is being amortized into interest expense over the term of the related financing. At December 31, 1998, scheduled amortization and maturities of all indebtedness for the next five years and thereafter are as follows (in thousands):
Year Amount ---- ------ 1999 $ 43,315 2000 70,603 2001 172,049 2002 56,462 2003 70,663 Thereafter 594,225 --------- $1,007,317 =========
Cash paid for interest in 1998, 1997, and 1996 was $63.6 million, $41.9 million, and $35.5 million, respectively. Total interest capitalized in 1998, 1997 and 1996 was $8.5 million, $6.0 million and $5.5 million, respectively. (6)SEGMENT REPORTING ----------------- The Company is engaged in four operating segments, the ownership and rental of office, industrial, and retail real estate investments and the providing of various real estate services such as property management, maintenance, leasing, and construction management to third- party property owners ("Service Operations). The - 52 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Company's reportable segments offer different products or services and are managed separately because each requires different operating strategies and management expertise. There are no material intersegment sales or transfers. Non-segment revenue to reconcile to total revenue consists mainly of equity in earnings of joint ventures. Non-segment assets to reconcile to total assets consists of corporate assets including cash, deferred financing costs and investments in unconsolidated subsidiaries. The accounting policies of the segments are the same as those described in Note 1. The Company assesses and measures segment operating results based on a performance measure referred to as Funds From Operations ("FFO"). The National Association of Real Estate Investment Trusts defines FFO as net income or loss, excluding gains or losses from debt restructurings and sales of property, plus depreciation and amortization and adjustments for minority interest and unconsolidated companies (adjustments for minority interest and unconsolidated companies are calculated to reflect FFO on the same basis). FFO is not a measure of operating results or cash flows from operating activities as measured by generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Interest expense and other non-property specific revenues and expenses are not allocated to individual segments in determining the Company's performance measure. - 53 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The revenues, FFO and assets for each of the reportable segments are summarized as follows for the years ended and as of December 31, 1998, 1997, and 1996:
1998 1997 1996 ----- ----- ----- Revenues -------- Rental Operations: Office $ 211,638 $ 141,331 $ 98,667 Industrial 104,658 60,209 40,789 Retail 21,102 18,345 16,625 Service Operations 24,716 22,378 19,929 --------- --------- ------- Total Segment Revenues 362,114 242,263 176,010 Non-Segment Revenue 11,227 9,817 6,079 --------- --------- ------- Consolidated Revenue $ 373,341 $ 252,080 $182,089 ========= ========= ======= Funds From Operations --------------------- Rental Operations: Office $ 148,822 $ 98,323 $ 68,011 Industrial 83,606 49,898 33,526 Retail 17,685 15,033 13,514 Services Operations 7,195 7,153 6,436 --------- --------- ------- Total Segment FFO 257,308 170,407 121,487 Non-Segment FFO: Interest expense (60,217) (40,296) (32,552) Interest income 1,562 2,174 1,194 General and administrative expense (11,573) (6,530) (4,719) Other expenses (6,324) (4,227) (2,746) Minority interest in earnings (13,493) (8,745) (8,170) Minority interest share of FFO adjustments (8,514) (4,791) (3,514) Joint Venture FFO 15,159 11,749 7,658 Dividends on preferred shares (19,833) (12,485) (2,559) --------- --------- ------- Consolidated FFO 154,074 107,256 76,079 Depreciation and amortization (68,766) (44,806) (31,363) Share of joint venture adjustments (4,302) (3,017) (1,890) Earnings from property sales 1,351 1,775 4,532 Minority interest share of adjustments 8,514 4,791 3,514 --------- --------- ------- Net income available for common shareholders $ 90,871 $ 65,999 $ 50,872 ========= ========= ======= Assets ------ Rental Operations Office $1,409,162 $1,085,142 Industrial 907,656 639,630 Retail 161,675 140,002 Service Operations 55,268 41,339 --------- --------- Total Segment Assets 2,533,761 1,906,113 Non-Segment Assets 319,892 270,101 --------- --------- Consolidated Assets $2,853,653 $2,176,214 ========= =========
(7) LEASING ACTIVITY ----------------- Future minimum rents due to the Company under non-cancelable operating leases at December 31, 1998 are as follows (in thousands):
Year Amount ----- ------ 1999 $ 284,746 2000 254,783 2001 217,107 2002 176,846 2003 139,674 Thereafter 530,175 --------- $1,603,331 =========
- 54 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements In addition to minimum rents, certain leases require reimbursements of specified operating expenses which amounted to $56.5 million, $33.8 million, and $19.7 million for the years ended December 31, 1998, 1997 and 1996, respectively. (8) EMPLOYEE BENEFIT PLANS ----------------------- The Company maintains a 401(k) plan for the benefit of its full-time employees. The Company matches the employees' contributions up to three percent of the employees' salary and may also make annual discretionary contributions. Total expense recognized by the Company was $1,482,000, $882,000 and $328,000 for the years ended 1998, 1997 and 1996, respectively. The Company makes contributions to a contributory health and welfare plan as necessary to fund claims not covered by employee contributions. Total expense recognized by the Company related to this plan was $2,178,000, $1,245,000 and $1,193,000 for 1998, 1997 and 1996, respectively. Included in total expense is an estimate based on historical experience of the effect of claims incurred but not reported as of year-end. (9) SHAREHOLDERS' EQUITY -------------------- The Company periodically accesses the public equity markets to fund the development and acquisition of additional rental properties. The proceeds of these offerings are contributed to DRLP in exchange for additional interest in the partnership. The following series of preferred stock is outstanding as of December 31, 1998 (in thousands, except percentages):
Shares Dividend Redemption Liquidation Description Outstanding Rate Date Preference Convertible - ----------- ----------- -------- ---------- ----------- ----------- Preferred A Series 300 9.100% August 31, 2001 $ 75,000 No Preferred B Series 300 7.990% September 30, 2007 150,000 No Preferred D Series 540 7.375% December 31, 2003 135,000 Yes
All series of preferred shares require cumulative distributions, have no stated maturity date, and the redemption price of each series may only be paid from the proceeds of other capital shares of the Company, which may include other classes or series of preferred shares. The Preferred Series D shares are convertible at a conversion rate of 9.3677 common shares for each preferred share outstanding. The dividend rate on the Preferred B Series shares increases to 9.99% after September 12, 2012. In July 1998, the Board of Directors of the Company approved the adoption of a shareholder rights plan ("Rights Agreement") and declared a dividend of one right for each outstanding share of the Company's Common Stock to stockholders of record at the close of business on August 3, 1998, and for each share of common stock issued by the Company thereafter and prior to the occurrence of certain triggering events which would in effect execute the Rights Agreement. Upon the occurrence of certain triggering events, each right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series C Junior Preferred Stock of the Company. In general, each share of Series C Preferred Shares has substantially the same economic attributes and carries substantially the same voting rights as one share of Common Stock. As of December 31, 1998, no events have triggered execution of the Rights Agreement. - 55 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (10) STOCK BASED COMPENSATION ------------------------ The Company has two fixed stock option plans and two performance based stock compensation plans. The Company applies APB Opinion No. 25 and related interpretations in accounting for its plans. Accordingly, no compensation cost has been recognized for its fixed stock option plans as the exercise price of each option equals the market price of the Company's stock on the date of grant. The Company charges compensation costs against its income for its two performance based stock plans. If compensation cost for the Company's four stock-based compensation plans had been determined consistent with FASB Statement No. 123, the Company's net income and net income per share for the years ended December 31 would have been reduced to the pro forma amounts indicated below:
1998 1997 1996 ---- ---- ---- Net income As reported $90,871 $65,999 $50,872 Pro forma 90,564 65,825 50,723 Basic net income As reported 1.13 .99 .91 per share Pro forma 1.12 .99 .91 Diluted net income As reported 1.12 .98 .90 per share Pro forma 1.11 .98 .90
The effects of applying FASB Statement No. 123 in this pro forma disclosure are not indicative of future amounts. The Statement does not apply to awards prior to 1995, and additional awards in future years are anticipated. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used: Dividend yield of 6.0% for all grants; expected volatility of 19% for all grants; weighted average risk-free interest rates of 5.7%, 6.4%, and 5.6% for 1998, 1997 and 1996 grants, respectively; and weighted average expected lives of 6.5 years, 6.5 years, 7.9 years for 1998, 1997 and 1996 grants, respectively. Fixed Stock Option Plans ------------------------ A summary of the status of the Company's two fixed stock option plans as of December 31, 1998, 1997 and 1996, and changes during the years ended on those dates is as follows:
1998 1997 1996 ------------------ ------------------- ------------------ Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price ------ -------- ------ -------- ------ -------- Outstanding, beginning of year 1,927,380 $14.26 1,947,642 $12.89 1,732,138 $12.48 Granted 1,681,611 22.32 346,008 20.09 246,914 16.06 Exercised (1,543,026) 19.72 (319,169) 11.98 (200) 12.94 Forfeited (17,993) 21.50 (47,101) 15.74 (31,210) 15.34 --------- --------- --------- Outstanding, end of year 2,047,972 16.70 1,927,380 14.26 1,947,642 12.89 ========= ========= ========= Options exercisable, end of year 1,067,753 927,312 864,657 ========= ========= ========= Weighted-average fair value of options granted during the year $.836 $2.81 $1.96 ==== ==== ====
The options outstanding at December 31, 1998, under the two fixed stock option plans have a range of exercise prices from $11.88 to $24.48 with a weighted average exercise price of $16.70 and a weighted average remaining contractual life of 6.80 years. The options exerciseable at December 31, 1998, have a weighted average exercise price of $13.32. - 56 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Each option's maximum term is ten years and, with limited exceptions, options granted under both plans vest at 20% per year, or, if earlier, upon the death, retirement or disability of the optionee or a change in control of the Company. In August 1998, the Company granted 1,231,215 stock options to certain officers in connection with those officers' participation in the Company's Executive and Senior Officer Stock Purchase Plan. Under this plan, the recipients of these stock options were required to purchase 1,231,215 shares of Company common stock by immediately exercising the stock options. Because the exercise price of the stock option was the same as the fair market value of the stock on the date of grant, these options had no value on the date of grant. Excluding the 1,231,215 stock options granted in connection with the Executive and Senior Officer Stock Purchase Plan, the weighted-average fair value of options granted during 1998 was $3.12. Performance Based Stock Plans ----------------------------- The Company has two performance based equity compensation plans. Under the 1995 Dividend Increase Unit Plan (the "DIU Plan"), Dividend Increase Units ("DIUs") are granted to key employees. The value of DIUs exercised by employees is payable in Company stock. A maximum of 400,000 shares of Company stock may be issued under the DIU Plan. The maximum term of all DIUs granted is ten years. The value of each DIU when exercised is equal to the increase in the Company's annualized dividend per share from the date of grant to the date of exercise, divided by the "dividend yield." Dividend yield is the annualized dividend per share divided by the market price per share of the Company's common stock at the date of grant. DIUs are subject to the same vesting schedule as stock options issued under the 1995 Plan. Under the 1995 Shareholder Value Plan (the "SV Plan"), the Company may grant awards in specified dollar amounts to key employees. The award is payable to the employee on the third anniversary of the date of grant. One-half of the award is payable in common stock of the Company, and one-half is payable in cash. A maximum of 200,000 shares of Company stock may be issued under the SV Plan. The initial dollar amount of each award granted under the SV Plan is adjusted upward or downward based on a comparison of the Company's cumulative total shareholder return for the three year period as compared to the cumulative total return of the S&P 500 and the NAREIT Equity REIT Total Return indices. The award is not payable upon the employee's termination of employment for any reason other than retirement, death, disability or a change in control of the Company. The Company believes that it is not possible to reasonably estimate the fair value of the common stock to be issued under the two performance based stock compensation plans and, therefore, computes compensation cost for these plans based on the intrinsic value of the awards as if they were exercised at the end of each applicable reporting period. The compensation cost that has been charged against income for these plans was $4,132,000, $2,515,000 and $513,000 for 1998, 1997 and 1996, respectively. (11) COMMITMENTS AND CONTINGENCIES ----------------------------- The Company has guaranteed $93 million of mortgage loans of unconsolidated companies of which the Company is a 50% partner. The mortgage loans are collateralized by rental properties of joint ventures which have a net carrying value substantially in excess of the mortgage loans. The Company does not anticipate that it will be required to satisfy these guarantees. - 57 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The Company has entered into agreements, subject to the completion of due diligence requirements, resolution of certain contingencies and completion of customary closing conditions, for the future acquisition of land totaling $86,439,000. The acquisitions are scheduled to close periodically through 2002 and will be paid for through a combination of cash and DRLP Limited Partner Unit issuance. In August 1998, the Company adopted The Executive and Senior Officer Stock Purchase Plan (the "Stock Purchase Plan") whereby members of management and unaffiliated members of the Company's Board of Directors purchased approximately $37 million of common stock of the Company. Both the management and Board of Director purchases were financed by five-year personal loans at market interest rates from a financial institution. Participants are personally responsible for repaying the interest, principal balance, and other obligations as defined in the Stock Purchase Plan. As a condition of the financing agreement with the financial institution, the Company has guaranteed repayment of principal, interest and other obligations for each participant, but is fully indemnified by the participants. In the opinion of management, it is not probable that the Company will be required to satisfy this guarantee. The Company is engaged in litigation as a defendant in a case filed by a tenant involving an alleged breach of contractual lease obligation. Based on information currently available and upon the advice of counsel, it is the opinion of management that the ultimate disposition of the pending legal proceeding should not have a material adverse effect on the Company's consolidated financial statements. However, in the event of an unfavorable ruling by a jury or judge in a court of competent jurisdiction with respect to the ultimate disposition of this case, such a ruling could have a material adverse effect on the Company's results of operations in a particular future period. (12) Subsequent Event ---------------- On March 1, 1999, the Company announced that it entered into an Agreement and Plan of Merger, dated as of February 28, 1999 (the "Merger Agreement"), with Weeks Corporation ("Weeks"), pursuant to which Weeks will merge with and into the Company. Weeks is a self- administered, self-managed, geographically focused REIT that was organized in 1994. As of December 31, 1998, Weeks' in-service property portfolio consisted of 300 industrial properties, 34 suburban office properties and five retail properties comprising 28.1 million square feet. As of December 31, 1998, Weeks' primary markets and the concentration of Weeks' portfolio (based on square footage of in-service properties) were Atlanta, Georgia; Nashville, Tennessee; Miami, Florida; Raleigh-Durham- Chapel Hill (the "Research Triangle"), North Carolina, Dallas/Ft. Worth, Texas; Orlando, Florida; and Spartanburg, South Carolina. In addition, 31 industrial, suburban office and retail properties were under development, in lease-up or under agreement to acquire at December 31, 1998, comprising an additional 3.4 million square feet. At December 31, 1998, Weeks had approximately 19.7 million shares of common stock and six million shares of preferred stock outstanding, and approximately $654 million aggregate principal amount of outstanding indebtedness. In the merger, each outstanding share of common stock of Weeks will be converted into the right to receive 1.38 shares of common stock of the Company; each outstanding share of 8.0% Series A Cumulative Redeemable Preferred Stock of Weeks will be converted into the right to receive one depositary share of the Company representing 1/1000 of a share of 8.0% Series F Cumulative Redeemable Preferred Stock of the Company; and each outstanding share of 8.625% Series D Cumulative Redeemable Preferred Stock of Weeks will be converted into the right to receive one depositary share of the Company representing 1/1000 of a share of 8.625% Series H Cumulative Redeemable Preferred Stock of the Company. The terms of the Company's depositary - 58 - shares to be issued in the merger will be identical to the terms of the Weeks Series A and Series D preferred stock. Weeks' principal operating subsidiary, Weeks Realty, L.P. (the "Weeks Operating Partnership"), will be merged with and into the Operating Partnership. In the partnership merger, each outstanding common unit of Weeks Operating Partnership will be converted into the right to receive 1.38 common units of the Operating Partnership. At December 31, 1998, Weeks Operating Partnership had approximately 7.3 million units of limited partnership interest outstanding. The merger of Weeks into the Company is expected to qualify as a tax-free reorganization and will be accounted for under the purchase method of accounting. The transactions are expected to close in the second or third quarter of 1999, subject to receipt of necessary approvals by the Company and Weeks shareholders and satisfaction of customary closing conditions. If the merger between the Company and Weeks is consummated as expected, the combined company will have significant operations and assets located in southeastern markets where the Company and its management have not traditionally operated or owned assets. Since substantially all of the members of Weeks' management are expacted to remain with the combined company for the foreseeable future after the merger, the Company expects to have the necessary expertise to operate successfully in the new markets. The combined company's operating performance will, however, be exposed to the general economic conditions of its new markets and could be adversely affected if conditions, such as an oversupply of space or a reduction in demand for the types of properties supplied by the combined company, become unfavorable. - 59 -
BUILDING ENCUMB- LOCATION/DEVELOPMENT BUILDING TYPE ANCES - -------------------- -------- ----------- -------- INDIANAPOLIS, INDIANA - --------------------- CASTLETON CORNER CUB CTR. RETAIL - CASTLETON CORNER MICHAEL'S PLAZA RETAIL - COMMUNITY MOB COMMUNITY MOB OFF. - PALOMAR BLDG. PALOMAR BUS.CTR. INDUST. - FRANKLIN RD.BUS.CTR. FRANKLIN RD. BUS.CTR. INDUST. - GEORGETOWN CTR. BLDG 1 INDUST. - GEORGETOWN CTR. BLDG 2 INDUST. - GEORGETOWN CTR. BLDG 3 INDUST. - NAMPAC BLDG. NAMPAC BLDG. INDUST. - 6060 GUION RD. 6060 GUION RD. INDUST. - GREENWOOD CORNER GREENWOOD CORNER SHPS.RETAIL - GREENWOOD CORNER FIRST INDIANA BRANCH RETAIL 249 HAMILTON CRSG. BLDG. 1 OFF. - HAMILTON CRSG. BLDG 2 OFF. - HILLSDALE TECHCTR. HILLSDALE BLDG 4 INDUST. - HILLSDALE TECHCTR. HILLSDALE BLDG 5 INDUST. - HILLSDALE TECHCTR. HILLSDALE BLDG 6 INDUST. - 8465 KEYSTONE 8465 KEYSTONE OFF. - F.C. TUCKER F.C. TUCKER BLDG. OFF. - 8555 KEYSTONE 8555 KEYSTONE OFF. - 3520 COMMERCE CRSG. 3520 COMMERCE CRSG. OFF. - 4750 KENTUCKY AVE. 4750 KENTUCKY AVE. INDUST. - NORTH AIRPORT PK. BLDG 2 INDUST. - ONE N.CAPITOL ONE N. CAPITOL OFF. - PK. 100 BUS.PK. PK. 100 BLDG 34 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 79 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 80 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 83 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 84 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 95 INDUST. 7,836 PK. 100 BUS.PK. PK. 100 BLDG 96 INDUST. 17,208 PK. 100 BUS.PK. PK. 100 BLDG 97 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 98 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 100 INDUST. 4,754 PK. 100 BUS.PK. PK. 100 BLDG 107 INDUST. 1,560 PK. 100 BUS.PK. PK. 100 BLDG 109 INDUST. 1,861 PK. 100 BUS.PK. PK. 100 BLDG 116 OFF. - PK. 100 BUS.PK. PK. 100 BLDG 118 OFF. - PK. 100 BUS.PK. PK. 100 BLDG 119 OFF. - PK. 100 BUS.PK. PK. 100 BLDG 121 RETAIL - PK. 100 BUS.PK. PK. 100 BLDG 122 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 125 INDUST. 4,550 PK. 100 BUS.PK. PK. 100 BLDG 126 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 127 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 128 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 129 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 130 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 131 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 132 OFF. - PK. 100 BUS.PK. PK. 100 BLDG 133 INDUST. - PK. 100 BUS.PK. PK. 100 BLDG 134 INDUST. - PK. 100 BUS.PK. WOODLAND CORP.CTR.ONE OFF. - PK. FLETCHER BLDG 14 INDUST. - PARKWOOD CRSG. ONE PARKWOOD OFF. - PARKWOOD CRSG. TWO PARKWOOD OFF. - PARKWOOD CRSG. THREE PARKWOOD OFF. - PARKWOOD CRSG. FOUR PK.WOOD OFF. - SOFTWARE ARTISTRY, INC. SOFTWARE ARTISTRY,INC.OFF. - SOUTH PK. BUS.CTR. BLDG 1 OFF. 1,329 SOUTH PK. BUS.CTR. BLDG 2 INDUST. 2,905 SOUTH PK. BUS.CTR. BLDG 3 OFF. 990 SHADELAND STA. 7351 SHADELAND 2-STORY OFF. - SHADELAND STA. 7420-86 SHADELAND INDUST.(2) - SHADELAND STA. 7240 SHADELAND 3-STORY OFF. 2,506 - 60 - SHADELAND STA. 7330 SHADELAND STA. OFF. 1,724 SHADELAND STA. 7369 SHADELAND STA. OFF. 1,966 SHADELAND STA. 7340 SHADELAND 2-STORY OFF. 1,108 SHADELAND STA. 7400 SHADELAND STA. OFF. 1,658 ST.FRANCIS MEDICAL ST. FRANCIS MEDICAL OFF. - WOODFIELD CRSG. II 8440 WOODFIELD OFF. - WOODFIELD CRSG. III 8425 WOODFIELD OFF. - 4316 W.MINNESOTA 4316 W.MINNESOTA INDUST. - NORCO WINDOWS LAND LSE. NORCO WINDOWS LND.LSE. - UPS LAND LSE UPS LND.LSE. LND.LSE. - NORGATE LAND LSE NORGATE LND.LSE. LND.LSE. - ZOLLMAN LAND LSE ZOLLMAN LND.LSE. LND.LSE. - BRYLANE LAND LSE BRYLANE LND.LSE. LND.LSE. - SOUTH PK. GRND.S SOUTH PK. GRND.S LAND - FORT WAYNE, INDIANA - ------------------- COLDWATER CRSG. COLDWATER CRSG. RETAIL 5,746 LEBANON, INDIANA - ---------------- LEBANON BUS.PK. AMERICAN AIR FILTER INDUST. - LEBANON BUS.PK. PURITY WHOLESALE INDUST. - LEBANON BUS.PK. PAMIDA INDUST. - LEBANON BUS.PK. PRENTICE HALL INDUST. - LEBANON BUS.PK. GENERAL CABLE INDUST. - NASHVILLE, TENNESSEE - -------------------- LAKEVIEW PLACE ONE LAKEVIEW PL. OFF. - LAKEVIEW PL. TWO LAKEVIEW PL. OFF. - GREENBRIAR BUS.PK. KEEBLER INDUST. - GREENBRIAR BUS.PK. GREENBRIAR BUS.PK. INDUST. - HAYWOOD OAKS TECHCTR. BLDG 2 INDUST. - HAYWOOD OAKS TECHCTR. BLDG 3 INDUST. - HAYWOOD OAKS TECHCTR. BLDG 4 INDUST. - HAYWOOD OAKS TECHCTR. BLDG 5 INDUST. - HAYWOOD OAKS TECHCTR. BLDG 6 INDUST. - HAYWOOD OAKS TECHCTR. BLDG 7 INDUST. - HAYWOOD OAKS TECHCTR. BLDG 8 INDUST. - CREEKSIDE CRSG. ONE ONE CREEKSIDE CRSG. OFF. - HEBRON, KENTUCKY - ---------------- SOUTHPK. BUS.CTR. CR SERVICES INDUST. 5,916 SKYPORT BUS.PK. BLDG 1 INDUST. - KENTUCKY SOUTHPK. BLDG 1 INDUST. - KENTUCKY SOUTHPK. BLDG 3 INDUST. - SOUTHPK. BUS.CTR. REDKEN LABS INDUST. 3,881 FLORENCE, KENTUCKY - ------------------ EMPIRE COMM.CTR. EMPIRE COMM.CTR. INDUST. - SOFA EXPRESS-FLORENCE SOFA EXPRESS-FLORENCE RETAIL - CINCINNATI, OHIO - ---------------- ONE ASHVIEW PL. ONE ASHVIEW PL. OFF. - BLUE ASH OFF.CTR VI BLUE ASH OFF. CTR VI OFF. - CORNELL COMM.CTR. CORNELL COMM.CTR. INDUST. - CREEK RD. BLDG 1 INDUST. - CREEK RD. BLDG 2 INDUST. - ZUSSMAN BLDG. 311 ELM OFF. - 312 ELM 312 ELM OFF. 30,410 ENTERPRISE BUS.PK. BLDG 1 INDUST. 2,038 ENTERPRISE BUS.PK. BLDG 2 INDUST. 1,981 ENTERPRISE BUS.PK. BLDG A INDUST. 414 ENTERPRISE BUS.PK. BLDG B INDUST. 692 - 61 - ENTERPRISE BUS.PK. BLDG D INDUST. 1,195 EASTGATE SQ. EASTGATE SQ. RETAIL - GARDEN RIDGE GARDEN RIDGE (EASTGATE) (EASTGATE) RETAIL - TRI-COUNTY EXECUTIVE PLAZA I OFF. - TRI-COUNTY EXECUTIVE PLAZA II OFF. - TRI-COUNTY EXECUTIVE PLAZA III OFF. - FAIRFIELD BUS.CTR. D FAIRFIELD BUS.CTR. D INDUST. - FAIRFIELD BUS.CTR. E FAIRFIELD BUS.CTR. E INDUST. - GOVERNOR'S PLAZA KOHL'S DEPT. STORE RETAIL - GOVERNOR'S PLAZA SOFA EXPRESS RETAIL - GOVERNOR'S PLAZA OFFICE MAX, INC. RETAIL - FIDELITY DR. BLDG. FIDELITY DR. BLDG. OFF. 1,537 PK. 50 TECHCTR. BLDG 17 OFF. - PK. 50 TECHCTR. BLDG 20 INDUST. 3,884 PK. 50 TECHCTR. BLDG 25 INDUST. - PK. 50 TECHCTR. BLDG 26 (SDRC) OFF. - GOVERNOR'S HILL 8790 GOVERNOR'S HILL OFF. - GOVERNOR'S HILL 8700 GOVERNOR'S HILL OFF. - GOVERNOR'S HILL 8800 GOVERNOR'S HILL OFF. 1,161 GOVERNOR'S HILL 8600 GOVERNOR'S HILL OFF. - GOVERNOR'S PLAZA GOVERNOR'S PLAZA RETAIL - GOVERNOR'S PTE. 4770 BLDG OFF. 3,076 GOVERNOR'S PTE. 4700 BLDG INDUST. 3,091 GOVERNOR'S PTE. 4900 BLDG INDUST. 3,198 GOVERNOR'S PTE. 4705 BLDG OFF. - GOVERNOR'S PTE. 4800 BLDG INDUST. - GOVERNOR'S PTE. 4605 BLDG OFF. 4,159 GOVERNOR'S PTE. RETAIL SOUTH (BIGG'S) RETAIL - GOVERNOR'S PTE. RETAIL N. (LOWE'S) RETAIL - GOVERNOR'S PTE. ANTHEM PRESCRIPT.MGMT.OFF. - GOVERNOR'S PTE. 4660 BLDG. OFF. - GOVERNOR'S PTE. 4680 BLDG. OFF. - FRANCISCAN HEALTH FRANCISCAN HEALTH OFF. - HUNTINGTON BANK BLDG. HUNTINGTON BANK BLDG. OFF. - KING'S MALL SHP.CTR. KING'S AUTO MALL I RETAIL 2,131 KING'S MALL SHP.CTR. KING'S AUTO MALL II RETAIL - 7910 KENTUCKY DR. 7910 KENTUCKY DR. INDUST. - 7920 KENTUCKY DR. 7920 KENTUCKY DR. INDUST. - KENWOOD KENWOOD EXECUTIVE CTR.OFF. - KENWOOD COMMONS BLDG I OFF. (2) 3,838 KENWOOD COMMONS BLDG II OFF. (2) 3,862 LAKE FOREST PL. LAKE FOREST PL. OFF. - MONTGOMERY CROSSING PHASE I RETAIL - GOVERNOR'S PLAZA SPORTS UNLIMITED RETAIL 1,566 MOSTELLER DIST.CTR. MOSTELLER DIST.CTR. INDUST. - MOSTELLER DIST.CTR. II MOSTELLER DIST.CTR.II INDUST. - PFEIFFER RD. OHIO NATIONAL OFF. 18,660 PERIMETER PK. BLDG. A INDUST. - PERIMETER PK. BLDG. B INDUST. - S & L DATA 312 PLUM OFF. - REMINGTON PK. BLDG A OFF. - REMINGTON PK. BLDG B OFF. - GALYAN'S TRADING CO. GALYAN'S TRADING CO. RETAIL 1,741 TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. RETAIL - TRI-COUNTY OFF.PK. TRI-COUNTY OFF.PK. OFF. - TRIANGLE OFF.PK. TRIANGLE OFF.PK. OFF. 4,735 TUTTLE CRSG. TUTTLE RETAIL CTR. RETAIL - UNIVERSITY MVG. UNIVERSITY MVG. INDUST. - WESTERN HILLS MKTPL. WESTERN HILLS MKTPL. RETAIL - WEST LAKE CTR. WEST LAKE CTR. OFF. - WORLD PK. BLDG 5 INDUST. 2,415 WORLD PK. BLDG 6 INDUST. 3,739 WORLD PK. BLDG 7 INDUST. 3,884 WORLD PK. BLDG 8 INDUST. - WORLD PK. BLDG 9 INDUST. - WORLD PK. BLDG 11 INDUST. - WORLD PK. BLDG 14 INDUST. - - 62 - WORLD PK. BLDG 15 INDUST. - WORLD PK. BLDG 16 INDUST. - WORLD PK. BLDG 18 INDUST. - WORLD PK. BLDG 28 INDUST. - WORLD PK. BLDG 29 INDUST. - WORLD PK. BLDG 31 INDUST. - WORLD PK.AT UNION CTR WORLD PK.UNION CTR I INDUST. - APPLEBEES LND.LSE. APPLEBEES LND.LSE. LND.LSE. - LAZARUS LND.LSE. LAZARUS LND.LSE. LND.LSE. - UNO'S LND.LSE. UNO'S LND.LSE. LND.LSE. - CLEVELAND, OHIO - --------------- CORP. CTR. I CORP. CTR. I OFF. - CORP. CTR. II CORP. CTR. II OFF. - CORP. CIRCLE CORP. CIRCLE OFF. - ONE CORP. EXCHANGE ONE CORP. EXCHANGE OFF. 3,576 CORP. PLAZA I CORP. PLAZA I OFF. 4,613 CORP. PLAZA II CORP. PLAZA II OFF. 4,201 CORP. PL. CORP. PL. OFF. - PK. 82 BLDG 2 INDUST. - PK. 82 STRONGSVILLE BLDG B INDUST. - ENTERPRISE BUS.PK. ENTERPRISE PARKWAY INDUST. - FOUNTAIN PKWAY BLDG I FOUNTAIN PKWAY BLDG I INDUST. - FREEDOM SQ. FREEDOM SQ. I OFF. - FREEDOM SQ. FREEDOM SQ. II OFF. 4,720 FREEDOM SQ. FREEDOM SQ. III OFF. - JOHNSON CONTROLS JOHNSON CONTROLS INDUST. - LANDERBROOK CORP.CTR. LANDERBROOK CORP.CTR. OFF. - LANDERBROOK CORP.CTR.II LANDERBROOK II OFF. - 6111 OAK TREE 6111 OAK TREE OFF. - PK. CTR. BLDG I OFF. - ROCK RUN CORP. PK. ROCK RUN - N. OFF. 2,531 ROCK RUN CORP. PK. ROCK RUN-CTR. OFF. 2,472 ROCK RUN CORP. PK. ROCK RUN - S. OFF. 2,548 SOLON INDUST.PK. 30600 CARTER INDUST. - SOLON INDUST.PK. 6230 COCHRAN INDUST. - SOLON INDUST.PK. 31900 SOLON-FRONT INDUST. - SOLON INDUST.PK. 5821 SOLON INDUST. - SOLON INDUST.PK. 6161 COCHRAN INDUST. - SOLON INDUST.PK. 5901 HARPER INDUST. - SOLON INDUST.PK. 29125 SOLON INDUST. - SOLON INDUST.PK. 6661 COCHRAN INDUST. - SOLON INDUST.PK. 6521 DAVIS INDUST. - SOLON INDUST.PK. 31900 SOLON-REAR INDUST. - DYMENT DYMENT INDUST. - COLUMBUS, OHIO - -------------- TWO EASTON OVAL TWO EASTON OVAL OFF. - PET FOODS DIST. PET FOODS DIST. INDUST. 11,167 TUTTLE CRSG. METROCTR. III OFF. - 6600 PORT ROAD 6600 PORT ROAD INDUST. - TUTTLE CRSG. SCIOTO CORP.CTR. OFF. - SOUTH PTE. BLDG D INDUST. - SOUTH PTE. BLDG E INDUST. - TUTTLE CRSG. 4650 LAKEHURST (LITEL) OFF. - TUTTLE CRSG. 4600 LAKEHURST (STERLING 1) OFF. - TUTTLE CRSG. 4700 LAKEHURST (INDIANA INS.) OFF. - TUTTLE CRSG. STERLING 2 OFF. - TUTTLE CRSG. JOHN ALDEN LIFE INS. OFF. - TUTTLE CRSG. CARDINAL HEALTH OFF. - TUTTLE CRSG. STERLING 3 OFF. - TUTTLE CRSG. COMPMANAGEMENT OFF. - TUTTLE CRSG. STERLING 4 OFF. - TUTTLE CRSG. 5555 PK. CTR. (XEROX) OFF. - TUTTLE CRSG. PK.WOOD PL. OFF. - - 63 - TUTTLE CRSG. NATIONWIDE OFF. - TUTTLE CRSG. EMERALD II OFF. - TUTTLE CRSG. ATRIUM II PHASE I OFF. - VETERANS ADMIN. CLINIC VA HOSPITAL OFF. 2,752 WESTBELT 2190-2200 WESTBELT DR.INDUST. - 3800 ZANE TRACE DR.(MBM) 3800 ZANE TRACE DR. INDUST. - 3635 ZANE TRACE DR. 3635 ZANE TRACE DR. INDUST. - BMW PARKING EXP. BMW PARKING EXP. LAND - QWEST PARKING EXP. QWEST PARKING EXP. LAND - DAYTON, OHIO - ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA RETAIL - CHICAGO, ILLINOIS - ----------------- ABBOTT DR. BLDG. ABBOTT DR. BLDG. INDUST. - JANICE AVE. BLDG. JANICE AVE. BLDG. INDUST. - WOLF RD. BLDG. WOLF RD. BLDG. INDUST. - TOUHY AVE. BLDG. TOUHY AVE. BLDG. INDUST. - JARVIS AVE. BLDG. JARVIS AVE. BLDG. INDUST. - BALLARD DR. BLDG. BALLARD DR. BLDG. INDUST. - LAUREL DR. BLDG. LAUREL DR. BLDG. INDUST. - KIRK RD. BLDG KIRK RD. BLDG. INDUST. - ATRIUM II ATRIUM II OFF. - CROSSROAD.S BLDG 1 INDUST. - EXECUTIVE TOWERS I EXECUTIVE TOWERS I OFF. - EXECUTIVE TOWERS II EXECUTIVE TOWERS II OFF. - EXECUTIVE TOWERS III EXECUTIVE TOWERS III OFF. - ONE CONWAY PK. ONE CONWAY PK. OFF. - YORKTOWN OFF.CTR. YORKTOWN OFF.CTR. OFF. - DECATUR, ILLINOIS - ----------------- PK. 101 BUS.CTR. BLDG 3 INDUST. - PK. 101 BUS.CTR. BLDG 8 INDUST. - ILLINOIS POWER ILLINOIS POWER LND.LSE. LND.LSE. LND.LSE. - BLOOMINGTON, ILLINOIS - --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA RETAIL - CHAMPAIGN, ILLINOIS - ------------------- MARKET VIEW MARKET VIEW SHOP CTR. RETAIL - WESTMONT, ILLINOIS - ------------------ OAKMONT CIRCLE OAKMONT TECH CTR. INDUST. - OAKMONT CIRCLE OAKMONT CIRCLE OFF. OFF. - ST. LOUIS, MISSOURI - ------------------- 1920 BELTWAY 1920 BELTWAY INDUST. - CRAIG PARK. CTR. CRAIG PARK. CTR. INDUST. - DUKEPORT 3 DUKEPORT 3 INDUST. - DUKEPORT 5 DUKEPORT 5 INDUST. - ALFA-LAVAL ALFA-LAVAL INDUST. - EARTH CITY 3322 NGIC OFF. 5,837 EARTH CITY 3300 PTE. 70 OFF. 5,397 MCI MCI OFF. - HORIZON BUS.CTR. HORIZON BUS.CTR. INDUST. 1,357 I-170 CTR. I-170 CTR. INDUST. - LAUMEIER OFF.PK. BLDG I OFF. - LAUMEIER OFF.PK. BLDG II OFF. - LAUMEIER OFF.PK. BLDG IV OFF. - - 64 - MARYVILLE CTR. 500 MARYVILLE CTR. OFF. 15,159 MARYVILLE CTR. 530 MARYVILLE CTR. OFF. 8,287 MARYVILLE CTR. 550 MARYVILLE CTR. OFF. 10,500 MARYVILLE CTR. 635 MARYVILLE CTR. OFF. 12,616 MARYVILLE CTR. 655 MARYVILLE CTR. OFF. 9,277 MARYVILLE CTR. 540 MARYVILLE CTR. OFF. 20,000 RIVERPORT TOWER RIVERPORT TOWER OFF. - RIVERPORT DIST. A RIVERPORT DIST. A INDUST. - EXPRESS SCRIPTS EXPRESS SCRIPTS SERVICE CTR. SERVICE CTR. INDUST. - RIVERPORT DIST. B RIVERPORT DIST. B INDUST. - SCRIPTS SCRIPTS OFF. - ST. LOUIS BUS.CTR. BLDG A INDUST. - ST. LOUIS BUS.CTR. BLDG B INDUST. - ST. LOUIS BUS.CTR. BLDG C INDUST. - ST. LOUIS BUS.CTR. BLDG D INDUST. - SOUTHPORT I SOUTHPORT I INDUST. - SOUTHPORT II SOUTHPORT II INDUST. - SOUTHPORT COMM.CTR. SOUTHPORT COMM.CTR. INDUST. - TWIN OAKS TWIN OAKS OFF. - WARSON COMM.CTR. WARSON COMM.CTR. INDUST. - WESTMARK WESTMARK OFF. - WESTPORT WESTPORT CTR. I INDUST. - WESTPORT WESTPORT CTR. II INDUST. - WESTVIEW PL. WESTVIEW PL. OFF. - BLOOMINGTON, MINNESOTA - ---------------------- HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. INDUST. - BROOKLYN PARK, MINNESOTA - ------------------------ 7300 NORTHLAND DR. 7300 NORTHLAND DR. INDUST. - EAGAN, MINNESOTA - ---------------- EAGANDALE TECH CTR. EAGANDALE TECH CTR. INDUST. - SILVER BELL COMMONS SILVER BELL COMMONS INDUST. - PLYMOUTH, MINNESOTA - ------------------- PLYMOUTH OFF./ PLYMOUTH OFF./ TECH CTR. TECH CTR. INDUST. - ST. PAUL, MINNESOTA - ------------------- UNIVERSITY CRSG. UNIVERSITY CRSG. INDUST. - MINNEAPOLIS, MINNESOTA - ------------------------- APOLLO DIST. CTR. APOLLO DIST. CTR. INDUST. - BASS LAKE BUS.CTR. BASS LAKE BUS.CTR. INDUST. 1,076 BRD.WAY BUS.CTR III BRD.WAY BUS.CTR III INDUST. - BRD.WAY BUS.CTR IV BRD.WAY BUS.CTR IV INDUST. - BRD.WAY BUS.CTR V BRD.WAY BUS.CTR V INDUST. - BRD.WAY BUS.CTR VI BRD.WAY BUS.CTR VI INDUST. - BRD.WAY BUS.CTR VII BRD.WAY BUS.CTR VII INDUST. - BLOOMINGTON BLOOMINGTON INDUST.CTR. INDUST.CTR. INDUST. 1,969 CAHILL BUS.CTR. CAHILL BUS.CTR. INDUST. - CEDAR LAKE BUS.CTR. CEDAR LAKE BUS.CTR. INDUST. - CHANHASSEN I CHANHASSEN I INDUST. - CHANHASSEN II CHANHASSEN II INDUST. - CORNERSTONE BUS.CTR CORNERSTONE BUS.CTR. INDUST. 6,700 CRYSTAL INDUST.CTR. CRYSTAL INDUST.CTR. INDUST. - 5219 BLDG. 5219 BLDG. OFF. - DECATUR BUS.CTR. DECATUR BUS.CTR. INDUST. - EAGANDALE CRSG. EAGANDALE CRSG. INDUST. - EDINA INTRCHG. I EDINA INTRCHG. I INDUST. 1,930 EDINA INTRCHG. II EDINA INTRCHG. II INDUST. 1,438 - 65 - EDINA INTRCHG. III EDINA INTRCHG. III INDUST. 1,641 EDINA INTRCHG. IV EDINA INTRCHG. IV INDUST. - EDINA INTRCHG. V EDINA INTRCHG. V INDUST. - EDINA INTRCHG. VI EDINA INTRCHG. VI INDUST. - EDINA INTRCHG. VII EDINA INTRCHG. VII INDUST. - ENTERPRISE INDUST.CTR. ENTERPRISE INDUST.CTR.INDUST. 2,676 ENCORE PK. ENCORE PK. INDUST. - EDINA REALTY EDINA REALTY OFF. - GOLDEN HILLS I GOLDEN HILLS I INDUST. - GOLDEN TRIANGLE GOLDEN TRIANGLE TECH CTR. TECH CTR. INDUST. - PROFESSIONAL PLAZA PROFESSIONAL PLAZA OFF. - PROFESSIONAL PLAZA IV PROFESSIONAL PLAZA IV INDUST. - CLIFF RD. INDUST.CTR. CLIFF RD. INDUST.CTR. INDUST. - PROFESSIONAL PLAZA PROFESSIONAL PLAZA III III INDUST. - PROFESSIONAL PLAZA II PROFESSIONAL PLAZA II INDUST. - LYNDALE COMMONS 1 LYNDALE COMMONS 1 INDUST. - LYNDALE COMMONS 2 LYNDALE COMMONS 2 INDUST. - HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR.N. INDUST. 3,099 HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR.S. INDUST. 3,057 LARC INDUST.PK. I LARC INDUST.PK. I INDUST. - LARC INDUST.PK. II LARC INDUST.PK. II INDUST. - LARC INDUST.PK. III LARC INDUST.PK. III INDUST. - LARC INDUST.PK. IV LARC INDUST.PK. IV INDUST. - LARC INDUST.PK. V LARC INDUST.PK. V INDUST. - LARC INDUST.PK. VI LARC INDUST.PK. VI INDUST. - LARC INDUST.PK. VII LARC INDUST.PK. VII INDUST. - MEDICINE LAKE MEDICINE LAKE INDUST. CTR. INDUST.CTR. INDUST. 4,567 MEDICINE LAKE MEDICINE LAKE PROF. BLDG. PROF. BLDG. OFF. - NORMAN CTR. I NORMAN CTR. I OFF. - NORMAN CTR. II NORMAN CTR. II OFF. - NORMAN CTR. III NORMAN CTR. III OFF. - NORMAN CTR. IV NORMAN CTR. IV OFF. - NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE INDUST. - NORTH PLAZA NORTH PLAZA OFF. - NORTH STAR TITLE NORTH STAR TITLE OFF. - OXFORD INDUST. OXFORD INDUST. INDUST. - PAKWA BUS.PK. I PAKWA BUS.PK. I INDUST. - PAKWA BUS.PK. II PAKWA BUS.PK. II INDUST. - PAKWA BUS.PK. III PAKWA BUS.PK. III INDUST. - PENN CORP. BLDG. PENN CORP. BLDG. INDUST. - 10801 RED CIRCLE DR. 10801 RED CIRCLE DR. OFF. - SANDBURG INDUST.CTR. SANDBURG INDUST.CTR. INDUST. - SIBLEY INDUST.CTR. I SIBLEY INDUST.CTR. I INDUST. - SIBLEY INDUST.CTR. II SIBLEY INDUST.CTR. II INDUST. - SIBLEY INDUST.CTR. III SIBLEY INDUST.CTR.III INDUST. - SOUTH PLAZA SOUTH PLAZA OFF. - JOHNSON BLDG. JOHNSON BLDG. INDUST. - TRAPP RD. I TRAPP RD. I INDUST. - TRAPP RD. BLDG II TRAPP RD. BLDG II INDUST. - TYROL WEST TYROL WEST OFF. - WESTSIDE BUS.PK. WESTSIDE BUS.PK. INDUST. - YANKEE PL. YANKEE PL. INDUST. - 801 ZANE AVE N. 801 ZANE AVE N. INDUST. - CHILIES GRND.LSE. CHILIES GRND.LSE. LND.LSE. - KNOX LND.LSE. KNOX LND.LSE. LND.LSE. - OLIVE GARDEN GRND.LSE. OLIVE GARDEN GRND.LSE.LND.LSE. - UNIVERSITY LND.LSE. UNIVERSITY LND.LSE. LND.LSE. - ELIMINATIONS ELIMINATIONS N/A - ------- TOTALS 326,317 =======
- 66 -
INITIAL COST TO COMPANY COSTS (1) ----------------------- CAPITALIZED BLDGS/ SUBSEQUENT TO LOCATION/DEVELOPMENT BLDG. LAND IMPROVMTS ACQUISITION - -------------------- -------- ------- ------------ ------------- INDIANAPOLIS, INDIANA - --------------------- CASTLETON CORNER CUB CTR. 540 4,850 315 CASTLETON CORNER MICHAEL'S PLAZA 749 3,400 406 COMMUNITY MOB COMMUNITY MOB 350 1,925 930 PALOMAR BLDG. PALOMAR BUS. CTR. 158 1,148 401 FRANKLIN RD.BUS.CTR. FRANKLIN RD.BUS.CTR. 594 3,986 7,146 GEORGETOWN CENTRE BLDG 1 362 2,437 46 GEORGETOWN CENTRE BLDG 2 374 2,588 59 GEORGETOWN CENTRE BLDG 3 421 1,960 72 NAMPAC BLDG. NAMPAC BLDG. 274 1,622 149 6060 GUION RD. 6060 GUION RD. 511 2,656 721 GREENWOOD CORNER GREENWOOD CORNER SHPS. 390 3,435 208 GREENWOOD CORNER FIRST INDIANA BRANCH 46 254 13 HAMILTON CRSG. BLDG. 1 526 2,424 520 HAMILTON CRSG. BLDG 2 313 1,315 683 HILLSDALE TECHNECTR. HILLSDALE BLDG 4 366 4,711 522 HILLSDALE TECHNECTR. HILLSDALE BLDG 5 251 3,235 308 HILLSDALE TECHNECTR. HILLSDALE BLDG 6 315 4,054 250 8465 KEYSTONE 8465 KEYSTONE 89 1,302 61 F.C. TUCKER F.C. TUCKER BLDG. - 264 18 8555 KEYSTONE 8555 KEYSTONE - 5,857 245 3520 COMMERCE CRSG. 3520 COMMERCE CRSG. - 579 382 4750 KENTUCKY AVENUE 4750 KENTUCKY AVENUE 246 2,260 272 NORTH AIRPORT PARK BLDG 2 550 5,470 2,196 ONE N. CAPITOL ONE N. CAPITOL 1,439 8,156 - PARK 100 BUS.PARK PARK 100 BLDG 34 131 1,455 268 PARK 100 BUS.PARK PARK 100 BLDG 79 184 1,764 440 PARK 100 BUS.PARK PARK 100 BLDG 80 251 2,412 259 PARK 100 BUS.PARK PARK 100 BLDG 83 247 2,572 294 PARK 100 BUS.PARK PARK 100 BLDG 84 347 2,604 264 PARK 100 BUS.PARK PARK 100 BLDG 95 642 4,756 344 PARK 100 BUS.PARK PARK 100 BLDG 96 1,414 8,734 4,668 PARK 100 BUS.PARK PARK 100 BLDG 97 676 4,294 1,372 PARK 100 BUS.PARK PARK 100 BLDG 98 473 6,022 2,002 PARK 100 BUS.PARK PARK 100 BLDG 100 103 2,179 748 PARK 100 BUS.PARK PARK 100 BLDG 107 99 1,575 107 PARK 100 BUS.PARK PARK 100 BLDG 109 240 1,807 - PARK 100 BUS.PARK PARK 100 BLDG 116 341 3,144 210 PARK 100 BUS.PARK PARK 100 BLDG 118 226 2,229 242 PARK 100 BUS.PARK PARK 100 BLDG 119 388 3,386 378 PARK 100 BUS.PARK PARK 100 BLDG 121 592 960 149 PARK 100 BUS.PARK PARK 100 BLDG 122 284 3,359 456 PARK 100 BUS.PARK PARK 100 BLDG 125 674 5,712 149 PARK 100 BUS.PARK PARK 100 BLDG 126 165 1,362 215 PARK 100 BUS.PARK PARK 100 BLDG 127 96 1,726 427 PARK 100 BUS.PARK PARK 100 BLDG 128 904 8,429 267 PARK 100 BUS.PARK PARK 100 BLDG 129 865 5,468 665 PARK 100 BUS.PARK PARK 100 BLDG 130 514 4,027 54 PARK 100 BUS.PARK PARK 100 BLDG 131 1,006 7,015 892 PARK 100 BUS.PARK PARK 100 BLDG 132 446 1,165 438 PARK 100 BUS.PARK PARK 100 BLDG 133 69 889 - PARK 100 BUS.PARK PARK 100 BLDG 134 465 3,043 861 PARK 100 BUS.PARK WOODLAND CORP.CTR. 1290 3,355 1,542 PARK FLETCHER BLDG 14 76 722 99 PARKWOOD CRSG. ONE PARKWOOD 1,018 9,578 596 PARKWOOD CRSG. TWO PARKWOOD 861 5,134 2,365 PARKWOOD CRSG. THREE PARKWOOD 1,316 6,048 3,056 PARKWOOD CRSG. FOUR PARKWOOD 1,489 9,011 2,277 SOFTWARE ARTISTRY, SOFTWARE ARTISTRY, INC. INC. 856 5,327 2,054 SOUTH PARK BUS. CTR. BLDG 1 287 2,328 457 SOUTH PARK BUS. CTR. BLDG 2 334 3,081 969 SOUTH PARK BUS. CTR. BLDG 3 208 2,150 636 SHADELAND STA. 7351 SHADELAND 2-STY 101 1,359 233 SHADELAND STA. 7420-86 SHADELAND 260 2,595 648 SHADELAND STA. 7240 SHADELAND 3-STY 152 3,113 869 - 60 - SHADELAND STA. 7330 SHADELAND STA. 255 4,045 65 SHADELAND STA. 7369 SHADELAND STA. 100 1,129 155 SHADELAND STA. 7340 SHADELAND 2-STY 165 2,458 264 SHADELAND STA. 7400 SHADELAND STA. 570 2,959 509 ST. FRANCIS MEDICAL ST. FRANCIS MEDICAL - 5,839 640 WOODFIELD AT THE CROSSING 8440 WOODFIELD 719 9,106 1,275 WOODFIELD AT THE CROSSING 8425 WOODFIELD 3,767 19,817 3,194 4316 W.MINNESOTA 4316 W.MINNESOTA 287 2,178 330 NORCO WINDOWS LND.LSE.NORCO WINDOWS 37 - - UPS LND.LSE. UPS LND.LSE. - - 270 NORGATE LND.LSE. NORGATE LND.LSE. 51 - - ZOLLMAN LND.LSE. ZOLLMAN LND.LSE. 115 - - BRYLANE LND.LSE. BRYLANE LND.LSE. 54 - 3 SOUTH PARK GRNDS. SOUTH PARK GRNDS. 21 - - FORT WAYNE, INDIANA - -------------------- COLDWATER CRSG. COLDWATER CRSG. 2,310 15,827 1,428 LEBANON, INDIANA - ---------------- LEBANON BUS. PARK AMERICAN AIR FILTER 177 3,053 81 LEBANON BUS. PARK PURITY WHOLESALE 610 7,848 418 LEBANON BUS. PARK PAMIDA 177 3,625 624 LEBANON BUS. PARK PRENTICE HALL 510 11,659 718 LEBANON BUS. PARK GENERAL CABLE 443 6,732 472 NASHVILLE, TENNESSEE - --------------------- LAKEVIEW PLACE ONE LAKEVIEW PLACE 2,046 11,591 73 LAKEVIEW PLACE TWO LAKEVIEW PLACE 2,046 11,591 121 GREENBRIAR BUS. PARK KEEBLER 307 1,183 79 GREENBRIAR BUS. PARK GREENBRIAR BUS.PK. 1,445 4,490 842 HAYWOOD OAKS TECHCTR. BLDG 2 395 1,767 167 HAYWOOD OAKS TECHCTR. BLDG 3 346 1,575 317 HAYWOOD OAKS TECHCTR. BLDG 4 435 1,948 218 HAYWOOD OAKS TECHCTR. BLDG 5 629 2,816 556 HAYWOOD OAKS TECHCTR. BLDG 6 924 5,730 716 HAYWOOD OAKS TECHCTR. BLDG 7 456 1,642 743 HAYWOOD OAKS TECHCTR. BLDG 8 617 2,225 1,850 CREEKSIDE CRSG. ONE ONE CREEKSIDE CRSG. 1,900 6,767 1,321 HEBRON, KENTUCKY - ---------------- SOUTHPARK BUS. CTR. CR SERVICES 1,085 4,060 1,121 SKYPORT BUS. PARK BLDG 1 611 5,661 1,192 KENTUCKY SOUTHPARK BLDG 1 682 3,725 519 KENTUCKY SOUTHPARK BLDG 3 841 3,382 752 SOUTHPARK BUS. CTR. REDKEN LABS 779 3,095 189 FLORENCE, KENTUCKY - ------------------ EMPIRE COMMERCE CTR. EMPIRE COMMERCE CTR. 581 2,784 356 SOFA EXPRESS-FLORENCE SOFA EXPRESS-FLORENCE 145 718 922 CINCINNATI, OHIO - ---------------- ONE ASHVIEW PLACE ONE ASHVIEW PLACE 1,204 12,328 209 BLUE ASH OFFICE BLUE ASH OFFICE CENTER VI CENTER VI 518 2,775 118 CORNELL COMMERCE CTR. CORNELL COMMERCE CTR. 495 4,501 391 CREEK ROAD BLDG 1 103 792 53 CREEK ROAD BLDG 2 132 1,093 68 ZUSSMAN BLDG 311 ELM 339 6,226 691 312 ELM 312 ELM 4,750 43,823 7,748 ENTERPRISE BUS. PARK BLDG 1 1,030 5,482 830 ENTERPRISE BUS. PARK BLDG 2 733 3,443 1,268 ENTERPRISE BUS. PARK BLDG A 119 685 55 ENTERPRISE BUS. PARK BLDG B 119 1,117 111 - 61 - ENTERPRISE BUS. PARK BLDG D 243 1,802 646 EASTGATE SQ. EASTGATE SQ. 2,030 4,079 1,122 GARDEN RIDGE GARDEN RIDGE (EASTGATE) (EASTGATE) 626 - 199 TRI-COUNTY EXECUTIVE PLAZA I 729 5,249 58 TRI-COUNTY EXECUTIVE PLAZA II 729 5,332 23 TRI-COUNTY EXECUTIVE PLAZA III 509 4,010 744 FAIRFIELD BUS. CTR. D FAIRFIELD BUS.CTR.D 135 1,639 17 FAIRFIELD BUS. CTR. E FAIRFIELD BUS.CTR.E 398 2,461 151 GOVERNOR'S PLAZA KOHL'S DEPT.STORE 1,345 3,575 273 GOVERNOR'S PLAZA SOFA EXPRESS 145 771 40 GOVERNOR'S PLAZA OFFICE MAX, INC. 651 1,223 104 FIDELITY DR. BLDG. FIDELITY DR. BLDG. 270 2,510 580 PARK 50 TECHNECTR. BLDG 17 500 5,961 - PARK 50 TECHNECTR. BLDG 20 461 7,237 - PARK 50 TECHNECTR. BLDG 25 1,161 3,758 1,077 PARK 50 TECHNECTR. BLDG 26 (SDRC) 911 19,004 1,469 GOVERNOR'S HILL 8790 GOVERNOR'S HILL 400 4,581 542 GOVERNOR'S HILL 8700 GOVERNOR'S HILL 459 5,705 255 GOVERNOR'S HILL 8800 GOVERNOR'S HILL 225 2,305 503 GOVERNOR'S HILL 8600 GOVERNOR'S HILL 1,220 17,689 2,049 GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,012 8,452 775 GOVERNOR'S POINTE 4770 BLDG 586 7,609 524 GOVERNOR'S POINTE 4700 BLDG 584 5,465 547 GOVERNOR'S POINTE 4900 BLDG 654 4,017 869 GOVERNOR'S POINTE 4705 BLDG 719 6,910 2,246 GOVERNOR'S POINTE 4800 BLDG 978 4,742 998 GOVERNOR'S POINTE 4605 BLDG 630 16,236 2,208 GOVERNOR'S POINTE RETAIL SOUTH (BIGG'S) 2,107 4,545 5,128 GOVERNOR'S POINTE RETAIL N. (LOWE'S) 1,241 4,214 2,680 GOVERNOR'S POINTE ANTHEM PRESCRIPT.MGMT. 594 4,100 2,140 GOVERNOR'S POINTE 4660 BLDG 385 3,662 1,572 GOVERNOR'S POINTE 4680 BLDG 1,115 6,413 1,850 FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,248 84 HUNTINGTON BANK BLDG. HUNTINGTON BANK BLDG. 175 220 11 KING'S MALL SHPG.CTR. KING'S AUTO MALL I 1,085 3,859 1,016 KING'S MALL SHPG.CTR. KING'S AUTO MALL II 1,928 3,636 1,349 7910 KENTUCKY DR. 7910 KENTUCKY DR. 285 673 81 7920 KENTUCKY DR. 7920 KENTUCKY DR. 698 1,235 27 KENWOOD KENWOOD EXEC.CTR. 606 3,886 92 KENWOOD COMMONS BLDG I - 3,199 1,060 KENWOOD COMMONS BLDG II - 2,867 1,323 LAKE FOREST PLACE LAKE FOREST PLACE 1,953 19,164 1,575 MONTGOMERY CROSSING PHASE I 260 852 143 GOVERNOR'S PLAZA SPORTS UNLIMITED 778 3,687 217 MOSTELLER DIST.CTR. MOSTELLER DIST.CTR. 1,220 4,209 2,673 MOSTELLER DIST. MOSTELLER DIST. CTR. II CTR. II 408 4,550 1,677 PFEIFFER ROAD OHIO NATIONAL 2,463 24,408 662 PERIMETER PARK BLDG. A 229 1,274 74 PERIMETER PARK BLDG. B 244 1,001 72 S & L DATA 312 PLUM 2,539 24,312 2,856 REMINGTON PARK BLDG A 560 1,442 32 REMINGTON PARK BLDG B 560 1,442 33 GALYAN'S TRADING CO. GALYAN'S TRADING CO. 1,925 3,359 143 TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. 5,368 4,065 76 TRI-COUNTY OFF.PK. TRI-COUNTY OFF.PK. 217 5,211 873 TRIANGLE OFF.PK. TRIANGLE OFF.PK. 1,000 10,440 2,233 TUTTLE CRSG. TUTTLE RETAIL CTR. 2,625 6,598 598 UNIVERSITY MVG. UNIVERSITY MVG. 248 1,612 105 WESTERN HILLS MKTPL. WESTERN HILLS MKTPL. 3,583 7,511 67 WEST LAKE CTR. WEST LAKE CTR. 2,459 15,972 1,569 WORLD PARK WORLD PARK BLDG 5 270 3,260 689 WORLD PARK WORLD PARK BLDG 6 378 3,821 - WORLD PARK WORLD PARK BLDG 7 525 4,150 386 WORLD PARK WORLD PARK BLDG 8 561 5,309 518 WORLD PARK WORLD PARK BLDG 9 317 2,993 366 WORLD PARK WORLD PARK BLDG 11 460 4,701 405 WORLD PARK WORLD PARK BLDG 14 380 3,592 291 - 62 - WORLD PARK WORLD PARK BLDG 15 373 2,274 364 WORLD PARK WORLD PARK BLDG 16 321 3,033 236 WORLD PARK WORLD PARK BLDG 18 834 5,425 - WORLD PARK WORLD PARK BLDG 28 738 1,549 2,750 WORLD PARK WORLD PARK BLDG 29 1,379 3,861 5,767 WORLD PARK WORLD PARK BLDG 31 458 3,058 34 WORLD PARK AT WORLD PARK AT UNION CTR.I UNION CTR. I 324 1,760 391 APPLEBEES LND.LSE. APPLEBEES LND.LSE. 309 - 29 LAZARUS LND.LSE. LAZARUS LND.LSE. 852 - - UNO'S LND.LSE. UNO'S LND.LSE. - - 587 CLEVELAND, OHIO - --------------- CORPORATE CTR. I CORPORATE CTR. I 1,048 6,695 533 CORPORATE CTR. II CORPORATE CTR. II 1,048 6,712 971 CORPORATE CIRCLE CORPORATE CIRCLE 1,696 10,846 793 ONE CORPORATE EXG. ONE CORPORATE EXG. 1,287 8,226 488 CORPORATE PLAZA I CORPORATE PLAZA I 2,116 13,528 621 CORPORATE PLAZA II CORPORATE PLAZA II 1,841 11,768 514 CORPORATE PLACE CORPORATE PLACE 1,161 7,425 430 PARK 82 BLDG 2 322 2,065 717 PARK 82 STRONGSVILLE BLDG B 243 1,902 324 ENTERPRISE BUS. PARK ENTERPRISE PKWY. 198 1,525 32 FOUNTAIN PKWY. FOUNTAIN PKWY. BLDG. I BLDG. I 438 2,733 164 FREEDOM SQ. FREEDOM SQ. I 595 3,796 182 FREEDOM SQ. FREEDOM SQ. II 1,746 11,141 591 FREEDOM SQ. FREEDOM SQ. III 701 5,027 1,603 JOHNSON CONTROLS JOHNSON CONTROLS 364 2,330 61 LANDERBROOK CORP.CTR. LANDERBROOK CORP. CTR. 1,807 7,445 3,290 LANDERBROOK CORP.CTR. LANDERBROOK CORP. CTR. 2 1,382 7,453 743 6111 OAK TREE 6111 OAK TREE 703 4,492 288 PARK CTR. BLDG I 1,997 9,647 1,623 ROCK RUN CORP. PARK ROCK RUN-N. 837 5,351 242 ROCK RUN CORP. PARK ROCK RUN-CTR. 1,046 6,686 677 ROCK RUN CORP. PARK ROCK RUN-S. 877 5,604 225 SOLON INDUST. PARK 30600 CARTER 819 3,286 98 SOLON INDUST. PARK 6230 COCHRAN 600 2,408 114 SOLON INDUST. PARK 31900 SOLON-FRONT 473 1,897 28 SOLON INDUST. PARK 5821 SOLON 554 2,222 58 SOLON INDUST. PARK 6161 COCHRAN 395 1,583 33 SOLON INDUST. PARK 5901 HARPER 349 1,399 128 SOLON INDUST. PARK 29125 SOLON 504 2,023 30 SOLON INDUST. PARK 6661 COCHRAN 244 981 39 SOLON INDUST. PARK 6521 DAVIS 128 514 10 SOLON INDUST. PARK 31900 SOLON-REAR 81 325 4 DYMENT DYMENT 817 5,203 - COLUMBUS, OHIO - -------------- TWO EASTON OVAL TWO EASTON OVAL 2,489 16,360 117 PET FOODS DIST. PET FOODS DIST. 268 4,932 1,323 TUTTLE CRSG. METROCTR. III 887 2,727 1,031 6600 PORT ROAD 6600 PORT ROAD 2,005 17,468 5,383 TUTTLE CRSG. SCIOTO CORP.CTR. 1,137 3,147 297 SOUTH POINTE BLDG D 276 2,485 1,000 SOUTH POINTE BLDG E 279 2,046 208 TUTTLE CRSG. 4650 LAKEHURST (LITEL) 2,618 17,428 1,627 TUTTLE CRSG. 4600 LAKEHURST (STERLING 1) 1,494 11,856 996 TUTTLE CRSG. 4700 LAKEHURST (INDIANA INS.) 717 2,081 1,128 TUTTLE CRSG. STERLING 2 605 5,300 425 TUTTLE CRSG. JOHN ALDEN LIFE INS. 1,066 6,856 622 TUTTLE CRSG. CARDINAL HEALTH 1,600 9,556 1,495 TUTTLE CRSG. STERLING 31,601 8,207 275 TUTTLE CRSG. COMPMANAGEMENT 867 2,860 1,681 TUTTLE CRSG. STERLING 4 483 9,011 766 TUTTLE CRSG. 5555 PARK CTR. (XEROX) 1,580 8,630 559 TUTTLE CRSG. PARKWOOD PLACE 1,690 5,457 6,042 - 63 - TUTTLE CRSG. NATIONWIDE 4,815 18,380 - TUTTLE CRSG. EMERALD II 495 2,225 859 TUTTLE CRSG. ATRIUM II PHASE I 1,649 7,640 2,820 VETERANS ADMIN.CL. VA HOSPITAL 703 9,239 509 WESTBELT 2190-2200 WESTBELT DR. 300 1,900 8 3800 ZANE TRACE DR. 3800 ZANE TRACE DR. (MBM) 170 1,916 480 3635 ZANE TRACE DR. 3635 ZANE TRACE DR. 236 1,749 122 BMW PARKING EXP. BMW PARKING EXP. 351 - - QWEST PARKING EXP. QWEST PARKING EXP. 201 - - DAYTON, OHIO - ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA 898 6,268 - CHICAGO, ILLINOIS - ----------------- ABBOTT DR. BLDG. ABBOTT DR. BLDG. 91 830 18 JANICE AVENUE BLDG. JANICE AVENUE BLDG. 94 855 - WOLF ROAD BLDG. WOLF ROAD BLDG. 179 1,593 - TOUHY AVENUE BLDG. TOUHY AVENUE BLDG. 310 2,823 381 JARVIS AVENUE BLDG. JARVIS AVENUE BLDG. 462 4,205 173 BALLARD DR. BLDG. BALLARD DR. BLDG. 186 1,693 24 LAUREL DR. BLDG. LAUREL DR. BLDG. 98 895 50 KIRK ROAD BLDG KIRK ROAD BLDG. 203 1,852 55 ATRIUM II ATRIUM II 776 6,991 123 CROSSROADS BLDG 1 917 8,251 711 EXECUTIVE TOWERS I EXECUTIVE TOWERS I 2,652 23,705 1,037 EXECUTIVE TOWERS II EXECUTIVE TOWERS II 3,386 30,965 430 EXECUTIVE TOWERS III EXECUTIVE TOWERS III 3,512 32,126 391 ONE CONWAY PARK ONE CONWAY PARK 1,901 17,391 401 YORKTOWN OFFICE CTR. YORKTOWN OFFICE CTR. 872 7,861 450 DECATUR, ILLINOIS - ----------------- PARK 101 BUS. CTR. BLDG 3 275 2,405 894 PARK 101 BUS. CTR. BLDG 8 80 1,660 97 ILLINOIS POWER ILLINOIS POWER LND.LSE. LND.LSE. 212 - - BLOOMINGTON, ILLINOIS - --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA 766 7,199 1,201 CHAMPAIGN, ILLINOIS - ------------------- MARKET VIEW MARKET VIEW SHOP CTR. 740 6,626 - WESTMONT, ILLINOIS - ------------------ OAKMONT CIRCLE OAKMONT TECH CTR. 1,501 8,450 - OAKMONT CIRCLE OAKMONT CIRCLE OFF. 2,538 13,777 - ST. LOUIS, MISSOURI - ------------------- 1920 BELTWAY 1920 BELTWAY 605 1,462 44 CRAIG PARK CTR. CRAIG PARK CTR. 254 2,285 - DUKEPORT 3 DUKEPORT 3 741 3,768 890 DUKEPORT 5 DUKEPORT 5 636 2,354 204 ALFA-LAVAL ALFA-LAVAL 1,158 4,944 455 EARTH CITY 3322 NGIC 2,615 10,461 287 EARTH CITY 3300 POINTE 70 1,186 7,287 193 MCI MCI 1,151 6,844 286 HORIZON BUS. CTR. HORIZON BUS. CTR. 344 2,411 88 I-170 CTR. I-170 CTR. 950 3,915 453 LAUMEIER OFF.PK. BLDG I 1,220 9,091 1,227 LAUMEIER OFF.PK. BLDG II 1,258 9,054 1,149 LAUMEIER OFF.PK. BLDG IV 1,029 7,200 - - 64 - MARYVILLE CTR. 500 MARYVILLE CTR. 3,402 24,101 - MARYVILLE CTR. 530 MARYVILLE CTR. 2,219 15,042 - MARYVILLE CTR. 550 MARYVILLE CTR. 2,219 11,922 - MARYVILLE CTR. 635 MARYVILLE CTR. 1,996 18,865 - MARYVILLE CTR. 655 MARYVILLE CTR. 3,048 11,626 - MARYVILLE CTR. 540 MARYVILLE CTR. 1,860 14,240 - RIVERPORT TOWER RIVERPORT TOWER 3,250 29,251 629 RIVERPORT DIST. A RIVERPORT DIST. A 242 2,175 38 EXPRESS SCRIPTS EXPRESS SCRIPTS SERV.CTR. SERV.CTR. 942 8,482 96 RIVERPORT DIST. B RIVERPORT DIST. B 216 1,944 20 SCRIPTS SCRIPTS - 237 - ST. LOUIS BUS. CTR. BLDG A 194 1,743 - ST. LOUIS BUS. CTR. BLDG B 250 2,249 - ST. LOUIS BUS. CTR. BLDG C 166 1,492 - ST. LOUIS BUS. CTR. BLDG D 168 1,513 - SOUTHPORT I SOUTHPORT I 192 808 13 SOUTHPORT II SOUTHPORT II 151 636 21 SOUTHPORT COMMERCE SOUTHPORT COMMERCE CTR. CTR. 233 979 44 TWIN OAKS TWIN OAKS 566 8,072 221 WARSON COMMERCE CTR. WARSON COMMERCE CTR. 749 5,240 60 WESTMARK WESTMARK 1,200 9,759 792 WESTPORT WESTPORT CTR. I 1,666 4,161 2,084 WESTPORT WESTPORT CTR. II 714 1,968 1,039 WESTVIEW PLACE WESTVIEW PLACE 673 8,389 1,046 BLOOMINGTON, MINNESOTA - ---------------------- HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. 2,124 11,166 1,546 BROOKLYN PARK, MINNESOTA - ------------------------ 7300 NORTHLAND DR. 7300 NORTHLAND DR. 700 3,576 425 EAGAN, MINNESOTA - ---------------- EAGANDALE TECH CTR. EAGANDALE TECH CTR. 987 5,554 307 SILVER BELL COMMONS SILVER BELL COMMONS 245 1,415 5 PLYMOUTH, MINNESOTA - ------------------- PLYMOUTH OFFICE/ PLYMOUTH OFFICE/ TECH. CTR. TECH. CTR. 428 2,424 2 ST. PAUL, MINNESOTA - ------------------- UNIVERSITY CRSG. UNIVERSITY CRSG. 874 4,886 168 MINNEAPOLIS, MINNESOTA - ---------------------- APOLLO DIST. CTR. APOLLO DIST. CTR. 866 4,842 640 BASS LAKE BUS. CTR . BASS LAKE BUS. CTR. 298 1,668 34 BROADWAY BUS. CTR III BROADWAY BUS. CTR III 140 791 31 BROADWAY BUS. CTR IV BROADWAY BUS. CTR IV 194 1,098 44 BROADWAY BUS. CTR V BROADWAY BUS. CTR V 160 908 37 BROADWAY BUS. CTR VI BROADWAY BUS. CTR VI 233 1,318 138 BROADWAY BUS. CTR VII BROADWAY BUS. CTR VII 433 2,451 (1,195) BLOOMINGTON INDUST. BLOOMINGTON INDUST. CTR. CTR. 628 3,508 88 CAHILL BUS. CTR. CAHILL BUS. CTR. 513 2,868 49 CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 334 1,868 13 CHANHASSEN I CHANHASSEN I 357 2,023 86 CHANHASSEN II CHANHASSEN II 438 2,483 97 CORNERSTONE BUS.CTR. CORNERSTONE BUS.CTR. 1,469 8,212 36 CRYSTAL INDUST. CTR. CRYSTAL INDUST.CTR. 456 2,549 218 5219 BLDG. 5219 BLDG. 99 562 21 DECATUR BUS. CTR. DECATUR BUS. CTR. 436 2,436 26 EAGANDALE CRSG. EAGANDALE CRSG. 974 2,320 - EDINA INTRCHG. I EDINA INTRCHG. I 637 3,560 55 EDINA INTRCHG. II EDINA INTRCHG. II 437 2,444 8 - 65 - EDINA INTRCHG. III EDINA INTRCHG. III 493 2,754 10 EDINA INTRCHG. IV EDINA INTRCHG. IV 230 1,286 322 EDINA INTRCHG. V EDINA INTRCHG. V 982 5,489 28 EDINA INTRCHG. VI EDINA INTRCHG. VI 477 2,669 10 EDINA INTRCHG. VII EDINA INTRCHG. VII 180 1,028 114 ENTERPRISE ENTERPRISE INDUST. CTR. INDUST. CTR. 874 4,884 617 ENCORE PARK ENCORE PARK 984 5,503 91 EDINA REALTY EDINA REALTY 330 1,817 179 GOLDEN HILLS I GOLDEN HILLS I 1,081 6,120 162 GOLDEN TRIANGLE GOLDEN TRIANGLE TECH. CTR. TECH. CTR. 1,446 8,080 183 PROFESSIONAL PLAZA PROFESSIONAL PLAZA 471 2,635 49 PROFESSIONAL PROFESSIONAL PLAZA IV PLAZA IV 248 1,387 26 CLIFF ROAD CLIFF ROAD INDUST. CTR. INDUST. CTR. 258 1,442 46 PROFESSIONAL PROFESSIONAL PLAZA III PLAZA III 237 1,323 30 PROFESSIONAL PROFESSIONAL PLAZA II PLAZA II 218 1,220 35 LYNDALE COMMONS 1 LYNDALE COMMONS 1 248 1,388 104 LYNDALE COMMONS 2 LYNDALE COMMONS 2 181 1,014 34 HAMPSHIRE DIST CTR.N. HAMPSHIRE DIST CTR. N. 782 4,370 158 HAMPSHIRE DIST CTR.S. HAMPSHIRE DIST CTR. S. 910 5,085 77 LARC INDUST. PARK I LARC INDUST. PARK I 283 1,580 27 LARC INDUST. PARK II LARC INDUST. PARK II 227 1,268 24 LARC INDUST. PARK III LARC INDUST. PARK III 137 765 3 LARC INDUST. PARK IV LARC INDUST. PARK IV 91 510 11 LARC INDUST. PARK V LARC INDUST. PARK V 97 541 3 LARC INDUST. PARK VI LARC INDUST. PARK VI 377 2,107 2 LARC INDUST. PARK VII LARC INDUST. PARK VII 244 1,365 147 MEDICINE LAKE MEDICINE LAKE INDUST. CTR. INDUST. CTR. 1,158 6,472 26 MEDICINE LAKE MEDICINE LAKE PROF. BLDG. PROF. BLDG. 77 430 1 NORMAN CTR. I NORMAN CTR. I 632 3,579 83 NORMAN CTR. II NORMAN CTR. II 782 4,433 159 NORMAN CTR. III NORMAN CTR. III 257 1,458 49 NORMAN CTR. IV NORMAN CTR. IV 562 3,183 101 NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE 1,885 10,682 433 NORTH PLAZA NORTH PLAZA 288 1,629 131 NORTH STAR TITLE NORTH STAR TITLE 506 2,869 246 OXFORD INDUST. OXFORD INDUST. 103 576 8 PAKWA BUS. PARK I PAKWA BUS. PARK I 351 1,962 150 PAKWA BUS. PARK II PAKWA BUS. PARK II 217 1,212 19 PAKWA BUS. PARK III PAKWA BUS. PARK III 251 1,403 21 PENN CORPORATE BLDG. PENN CORPORATE BLDG. 315 1,762 6 10801 RED CIRCLE DR. 10801 RED CIRCLE DR. 533 2,981 56 SANDBURG INDUST. CTR. SANDBURG INDUST. CTR. 456 2,551 10 SIBLEY INDUST. CTR. I SIBLEY INDUST. CTR. I 356 2,012 185 SIBLEY INDUST. SIBLEY INDUST. CTR. II CTR. II 234 1,311 5 SIBLEY INDUST. SIBLEY INDUST. CTR. III CTR. III 213 1,191 71 SOUTH PLAZA SOUTH PLAZA 377 2,136 143 JOHNSON BLDG. JOHNSON BLDG. 558 3,121 13 TRAPP ROAD I TRAPP ROAD I 671 3,800 153 TRAPP ROAD BLDG II TRAPP ROAD BLDG II 1,250 6,872 286 TYROL WEST TYROL WEST 350 1,985 208 WESTSIDE BUS. PARK WESTSIDE BUS. PARK 1,189 6,646 54 YANKEE PLACE YANKEE PLACE 2,822 15,777 275 801 ZANE AVE N. 801 ZANE AVE N. 369 2,064 9 CHILIES GRND.LSE. CHILIES GRND.LSE. 921 - 59 KNOX LND.LSE. KNOX LND.LSE. 1,066 - 1 OLIVE GARDEN OLIVE GARDEN GRND.LSE. GRND. LSE. 850 - 70 UNIVERSITY LND.LSE. UNIVERSITY LND.LSE. 296 - - ELIMINATIONS ELIMINATIONS - (132) - ------- --------- ------- TOTALS 298,394 1,894,388 210,997 ======= ========= =======
- 66 -
GROSS BOOK VALUE AT DECEMBER 31, 1998 ---------------------------------- LAND & BLDGS./ LOCATION/DEVELOPMENT BUILDING IPRVMTS. IMPRVMTS. TOTAL - -------------------- -------- --------- -------- --------- INDIANAPOLIS, INDIANA - --------------------- CASTLETON CORNER CUB CTR. 549 5,156 5,705 CASTLETON CORNER MICHAEL'S PLAZA 764 3,791 4,555 COMMUNITY MOB COMMUNITY MOB 350 2,855 3,205 PALOMAR BUILDING PALOMAR BUS. CTR. 158 1,549 1,707 FRANKLIN ROAD FRANKLIN ROAD BUS. CTR. BUS. CTR. 594 11,132 11,726 GEORGETOWN CTR. BLDG 1 362 2,483 2,845 GEORGETOWN CTR. BLDG 2 374 2,647 3,021 GEORGETOWN CTR. BLDG 3 421 2,032 2,453 NAMPAC BUILDING NAMPAC BUILDING 274 1,771 2,045 6060 GUION RD. 6060 GUION RD. 511 3,377 3,888 GREENWOOD CORNER GREENWOOD CORNER SHPS. 418 3,615 4,033 GREENWOOD CORNER FIRST INDIANA BRANCH 47 266 313 HAMILTON CRSG. BLDG. 1 538 2,932 3,470 HAMILTON CRSG. BLDG. 2 384 1,927 2,311 HILLSDALE TECHCTR. HILLSDALE BLDG 4 366 5,233 5,599 HILLSDALE TECHCTR. HILLSDALE BLDG 5 251 3,543 3,794 HILLSDALE TECHCTR. HILLSDALE BLDG 6 315 4,304 4,619 8465 KEYSTONE 8465 KEYSTONE 89 1,363 1,452 F.C. TUCKER F.C. TUCKER BUILDING - 282 282 8555 KEYSTONE 8555 KEYSTONE - 6,102 6,102 3520 COMMERCE CRSG. 3520 COMMERCE CRSG. - 961 961 4750 KENTUCKY AVENUE 4750 KENTUCKY AVENUE 246 2,532 2,778 NORTH AIRPORT PARK BLDG 2 777 7,439 8,216 ONE N. CAPITOL ONE N. CAPITOL 1,439 8,156 9,595 PARK 100 BUS. PARK PARK 100 BLDG 34 133 1,721 1,854 PARK 100 BUS. PARK PARK 100 BLDG 79 187 2,201 2,388 PARK 100 BUS. PARK PARK 100 BLDG 80 256 2,666 2,922 PARK 100 BUS. PARK PARK 100 BLDG 83 252 2,861 3,113 PARK 100 BUS. PARK PARK 100 BLDG 84 354 2,861 3,215 PARK 100 BUS. PARK PARK 100 BLDG 95 642 5,100 5,742 PARK 100 BUS. PARK PARK 100 BLDG 96 1,436 13,380 14,816 PARK 100 BUS. PARK PARK 100 BLDG 97 676 5,666 6,342 PARK 100 BUS. PARK PARK 100 BLDG 98 273 8,224 8,497 PARK 100 BUS. PARK PARK 100 BLDG 100 103 2,927 3,030 PARK 100 BUS. PARK PARK 100 BLDG 107 99 1,682 1,781 PARK 100 BUS. PARK PARK 100 BLDG 109 246 1,801 2,047 PARK 100 BUS. PARK PARK 100 BLDG 116 348 3,347 3,695 PARK 100 BUS. PARK PARK 100 BLDG 118 230 2,467 2,697 PARK 100 BUS. PARK PARK 100 BLDG 119 395 3,757 4,152 PARK 100 BUS. PARK PARK 100 BLDG 121 604 1,097 1,701 PARK 100 BUS. PARK PARK 100 BLDG 122 290 3,809 4,099 PARK 100 BUS. PARK PARK 100 BLDG 125 674 5,861 6,535 PARK 100 BUS. PARK PARK 100 BLDG 126 165 1,577 1,742 PARK 100 BUS. PARK PARK 100 BLDG 127 96 2,153 2,249 PARK 100 BUS. PARK PARK 100 BLDG 128 904 8,696 9,600 PARK 100 BUS. PARK PARK 100 BLDG 129 865 6,133 6,998 PARK 100 BUS. PARK PARK 100 BLDG 130 513 4,082 4,595 PARK 100 BUS. PARK PARK 100 BLDG 131 1,111 7,802 8,913 PARK 100 BUS. PARK PARK 100 BLDG 132 446 1,603 2,049 PARK 100 BUS. PARK PARK 100 BLDG 133 69 889 958 PARK 100 BUS. PARK PARK 100 BLDG 134 464 3,905 4,369 PARK 100 BUS. PARK WOODLAND CORP.CTR.1 320 4,867 5,187 PARK FLETCHER BLDG 14 76 821 897 PARKWOOD CRSG. ONE PARKWOOD 1,018 10,174 11,192 PARKWOOD CRSG. TWO PARKWOOD 861 7,499 8,360 PARKWOOD CRSG. THREE PARKWOOD 1,377 9,043 10,420 PARKWOOD CRSG. FOUR PARKWOOD 1,490 11,287 12,777 SOFTWARE ARTISTRY, INC. SOFTWARE ARTISTRY,INC. 856 7,381 8,237 SOUTH PARK BUS. CTR. BLDG 1 292 2,780 3,072 SOUTH PARK BUS. CTR. BLDG 2 341 4,043 4,384 SOUTH PARK BUS. CTR. BLDG 3 212 2,782 2,994 SHADELAND STA. 7351 SHADELAND 2-STY 103 1,590 1,693 SHADELAND STA. 7420-86 SHADELAND 266 3,237 3,503 SHADELAND STA. 7240 SHADELAND 3-STY 152 3,982 4,134 - 60 - SHADELAND STA. 7330 SHADELAND STA. 260 4,105 4,365 SHADELAND STA. 7369 SHADELAND STA. 102 1,282 1,384 SHADELAND STA. 7340 SHADELAND 2-STY 169 2,718 2,887 SHADELAND STA. 7400 SHADELAND STA. 581 3,457 4,038 ST. FRANCIS MEDICAL ST. FRANCIS MEDICAL - 6,479 6,479 WOODFIELD AT THE 8440 WOODFIELD 733 10,367 11,100 THE CROSSING II WOODFIELD AT THE 8425 WOODFIELD 3,843 22,935 26,778 THE CROSSING III 4316 W.MINNESOTA 4316 W.MINNESOTA 287 2,508 2,795 NORCO WINDOWS LND.LSE. NORCO WINDOWS LND.LSE. 37 - 37 UPS LND.LSE. UPS LND.LSE. 270 - 270 NORGATE LND.LSE. NORGATE LND.LSE. 51 - 51 ZOLLMAN LND.LSE. ZOLLMAN LND.LSE. 115 - 115 BRYLANE LND.LSE. BRYLANE LND.LSE. 57 - 57 SOUTH PARK GRND.S SOUTH PARK GRND.S 21 - 21 FORT WAYNE, INDIANA - ------------------- COLDWATER CRSG. COLDWATER CRSG. 2,310 17,255 19,565 LEBANON, INDIANA - ---------------- LEBANON BUS. PARK AMERICAN AIR FILTER 177 3,134 3,311 LEBANON BUS. PARK PURITY WHOLESALE 610 8,266 8,876 LEBANON BUS. PARK PAMIDA 305 4,121 4,426 LEBANON BUS. PARK PRENTICE HALL 740 12,147 12,887 LEBANON BUS. PARK GENERAL CABLE 443 7,204 7,647 NASHVILLE, TENNESSEE - -------------------- LAKEVIEW PLACE ONE LAKEVIEW PLACE 2,046 11,664 13,710 LAKEVIEW PLACE TWO LAKEVIEW PLACE 2,046 11,712 13,758 GREENBRIAR BUS. PARK KEEBLER 307 1,262 1,569 GREENBRIAR BUS. PARK GREENBRIAR BUS. PARK 1,445 5,332 6,777 HAYWOOD OAKS TECHCTR. BLDG 2 395 1,934 2,329 HAYWOOD OAKS TECHCTR. BLDG 3 346 1,892 2,238 HAYWOOD OAKS TECHCTR. BLDG 4 435 2,166 2,601 HAYWOOD OAKS TECHCTR. BLDG 5 629 3,372 4,001 HAYWOOD OAKS TECHCTR. BLDG 6 946 6,424 7,370 HAYWOOD OAKS TECHCTR. BLDG 7 456 2,385 2,841 HAYWOOD OAKS TECHCTR. BLDG 8 751 3,941 4,692 CREEKSIDE CRSG. ONE ONE CREEKSIDE CRSG. 1,900 8,088 9,988 HEBRON, KENTUCKY - ---------------- SOUTHPARK BUS. CTR. CR SERVICES 1,085 5,181 6,266 SKYPORT BUS. PARK BLDG 1 906 6,558 7,464 KENTUCKY SOUTHPARK BLDG 1 696 4,230 4,926 KENTUCKY SOUTHPARK BLDG 3 858 4,117 4,975 SOUTHPARK BUS. CTR. REDKEN LABS 779 3,284 4,063 FLORENCE, KENTUCKY - ------------------ EMPIRE COMMERCE CTR. EMPIRE COMMERCE CTR. 581 3,140 3,721 SOFA EXPRESS-FLORENCE SOFA EXPRESS-FLORENCE 735 1,050 1,785 CINCINNATI, OHIO - ---------------- ONE ASHVIEW PLACE ONE ASHVIEW PLACE 1,204 12,537 13,741 BLUE ASH OFFICE CTR VI BLUE ASH OFFICE CTR VI 518 2,893 3,411 CORNELL COMMERCE CTR. CORNELL COMMERCE CTR. 495 4,892 5,387 CREEK ROAD BLDG 1 103 845 948 CREEK ROAD BLDG 2 132 1,161 1,293 ZUSSMAN BLDG 311 ELM 346 6,910 7,256 312 ELM 312 ELM 5,424 50,897 56,321 ENTERPRISE BUS. PARK BLDG 1 1,051 6,291 7,342 ENTERPRISE BUS. PARK BLDG 2 747 4,697 5,444 ENTERPRISE BUS. PARK BLDG A 119 740 859 ENTERPRISE BUS. PARK BLDG B 119 1,228 1,347 - 61 - ENTERPRISE BUS. PARK BLDG D 243 2,448 2,691 EASTGATE SQ. EASTGATE SQ. 2,030 5,201 7,231 GARDEN RIDGE (EASTGATE) GARDEN RIDGE (EASTGATE) 626 199 825 TRI-COUNTY EXECUTIVE PLAZA I 728 5,308 6,036 TRI-COUNTY EXECUTIVE PLAZA II 728 5,356 6,084 TRI-COUNTY EXECUTIVE PLAZA III 509 4,754 5,263 FAIRFIELD BUS. CTR. D FAIRFIELD BUS. CTR. D 135 1,656 1,791 FAIRFIELD BUS. CTR. E FAIRFIELD BUS. CTR. E 398 2,612 3,010 GOVERNOR'S PLAZA KOHL'S DEPT. STORE 1,345 3,848 5,193 GOVERNOR'S PLAZA SOFA EXPRESS 164 792 956 GOVERNOR'S PLAZA OFFICE MAX, INC. 651 1,327 1,978 FIDELITY DRIVE BUILDING FIDELITY DRIVE BLFG. 464 2,896 3,360 PARK 50 TECHCTR. BLDG 17 510 5,951 6,461 PARK 50 TECHCTR. BLDG 20 469 7,229 7,698 PARK 50 TECHCTR. BLDG 25 1,184 4,812 5,996 PARK 50 TECHCTR. BLDG 26 (SDRC) 929 20,455 21,384 GOVERNOR'S HILL 8790 GOVERNOR'S HILL 408 5,115 5,523 GOVERNOR'S HILL 8700 GOVERNOR'S HILL 468 5,951 6,419 GOVERNOR'S HILL 8800 GOVERNOR'S HILL 231 2,802 3,033 GOVERNOR'S HILL 8600 GOVERNOR'S HILL 1,245 19,713 20,958 GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,053 9,186 11,239 GOVERNOR'S PTE. 4770 BLDG 596 8,123 8,719 GOVERNOR'S PTE. 4700 BLDG 595 6,001 6,596 GOVERNOR'S PTE. 4900 BLDG 673 4,867 5,540 GOVERNOR'S PTE. 4705 BLDG 792 9,083 9,875 GOVERNOR'S PTE. 4800 BLDG 998 5,720 6,718 GOVERNOR'S PTE. 4605 BLDG 715 18,359 19,074 GOVERNOR'S PTE. RETAIL SOUTH (BIGG'S) 4,227 7,553 11,780 GOVERNOR'S PTE. RETAIL N. (LOWE'S) 3,419 4,716 8,135 GOVERNOR'S PTE. ANTHEM PRESCRIP. MGMT. 594 6,240 6,834 GOVERNOR'S PTE. 4660 BLDG 529 5,090 5,619 GOVERNOR'S PTE. 4680 BLDG 1,115 8,263 9,378 FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,332 3,332 HUNTINGTON BANK BLDG. HUNTINGTON BANK BLDG. 175 231 406 KING'S MALL SHPG. CTR. KING'S AUTO MALL I 124 4,836 5,960 KING'S MALL SHPG. CTR. KING'S AUTO MALL II 952 4,961 6,913 7910 KENTUCKY DRIVE 7910 KENTUCKY DR. 285 754 1,039 7920 KENTUCKY DRIVE 7920 KENTUCKY DR. 698 1,262 1,960 KENWOOD KENWOOD EXECUTIVE CTR. 606 3,978 4,584 KENWOOD COMMONS BLDG I - 4,259 4,259 KENWOOD COMMONS BLDG II - 4,190 4,190 LAKE FOREST PLACE LAKE FOREST PLACE 1,953 20,739 22,692 MONTGOMERY CROSSING PHASE I 260 995 1,255 GOVERNOR'S PLAZA SPORTS UNLIMITED 778 3,904 4,682 MOSTELLER DIST. CTR. MOSTELLER DIST. CTR. 1,327 6,775 8,102 MOSTELLER DIST. CTR. II MOSTELLER DIST. CTR. II 828 5,807 6,635 PFEIFFER ROAD OHIO NATIONAL 2,463 25,070 7,533 PERIMETER PARK BUILDING A 229 1,348 1,577 PERIMETER PARK BUILDING B 244 1,073 1,317 S & L DATA 312 PLUM 2,590 27,117 29,707 REMINGTON PARK BLDG A 560 1,474 2,034 REMINGTON PARK BLDG B 560 1,475 2,035 GALYAN'S TRADING CO. GALYAN'S TRADING CO. 1,925 3,502 5,427 TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. 5,392 4,117 9,509 TRI-COUNTY OFFICE PARK TRI-COUNTY OFF. PARK 221 6,080 6,301 TRIANGLE OFFICE PARK TRIANGLE OFF. PARK 1,018 12,655 13,673 TUTTLE CRSG. TUTTLE RETAIL CTR. 3,450 6,371 9,821 UNIVERSITY MVG. UNIVERSITY MVG. 248 1,717 1,965 WESTERN HILLS MKTPL. WESTERN HILLS MKTPL. 3,583 7,578 11,161 WEST LAKE CTR. WEST LAKE CTR. 2,459 17,541 20,000 WORLD PARK WORLD PARK BLDG 5 276 3,943 4,219 WORLD PARK WORLD PARK BLDG 6 385 3,814 4,199 WORLD PARK WORLD PARK BLDG 7 537 4,524 5,061 WORLD PARK WORLD PARK BLDG 8 561 5,827 6,388 WORLD PARK WORLD PARK BLDG 9 317 3,359 3,676 WORLD PARK WORLD PARK BLDG 11 460 5,106 5,566 WORLD PARK WORLD PARK BLDG 14 380 3,883 4,263 - 62 - WORLD PARK WORLD PARK BLDG 15 381 2,630 3,011 WORLD PARK WORLD PARK BLDG 16 321 3,269 3,590 WORLD PARK WORLD PARK BLDG 18 997 5,262 6,259 WORLD PARK WORLD PARK BLDG 28 738 4,299 5,037 WORLD PARK WORLD PARK BLDG 29 1,379 9,628 11,007 WORLD PARK WORLD PARK BLDG 31 458 3,092 3,550 WORLD PARK AT UNION CTR WORLD PARK UNION CTR I 324 2,151 2,475 APPLEBEES LND.LSE. APPLEBEES LND.LSE. 338 - 338 LAZARUS LND.LSE. LAZARUS LND.LSE. 852 - 852 UNO'S LND.LSE. UNO'S LND.LSE. 587 - 587 CLEVELAND, OHIO - --------------- CORPORATE CTR. I CORPORATE CTR. I 1,038 7,238 8,276 CORPORATE CTR. II CORPORATE CTR. II 1,048 7,683 8,731 CORPORATE CIRCLE CORPORATE CIRCLE 1,698 11,637 13,335 ONE CORPORATE EXCHANGE ONE CORPORATE EXCHANGE 1,287 8,714 10,001 CORPORATE PLAZA I CORPORATE PLAZA I 2,116 14,149 16,265 CORPORATE PLAZA II CORPORATE PLAZA II 1,841 12,282 14,123 CORPORATE PLACE CORPORATE PLACE 1,163 7,853 9,016 PARK 82 BLDG 2 322 2,782 3,104 PARK 82 STRONGSVILLE BLDG B 243 2,226 2,469 ENTERPRISE BUS. PARK ENTERPRISE PARKWAY 198 1,557 1,755 FOUNTAIN PARKWAY BLDG I FOUNTAIN PARKWAY BLDG I 527 2,808 3,335 FREEDOM SQ. FREEDOM SQ. I 595 3,978 4,573 FREEDOM SQ. FREEDOM SQ. II 1,746 11,732 13,478 FREEDOM SQ. FREEDOM SQ. III 701 6,630 7,331 JOHNSON CONTROLS JOHNSON CONTROLS 364 2,391 2,755 LANDERBROOK LANDERBROOK CORP. CTR. CORP. CTR. 1,808 10,734 12,542 LANDERBROOK LANDERBROOK CORP. CTR II CORP. CTR. II 1,382 8,196 9,578 6111 OAK TREE 6111 OAK TREE 703 4,780 5,483 PARK CTR. BLDG I 1,997 11,270 13,267 ROCK RUN CORPORATE PARK ROCK RUN-N. 837 5,593 6,430 ROCK RUN CORPORATE PARK ROCK RUN-CTR. 1,046 7,363 8,409 ROCK RUN CORPORATE PARK ROCK RUN-S. 877 5,829 6,706 SOLON INDUST. PARK 30600 CARTER 821 3,382 4,203 SOLON INDUST. PARK 6230 COCHRAN 602 2,520 3,122 SOLON INDUST. PARK 31900 SOLON-FRONT 474 1,924 2,398 SOLON INDUST. PARK 5821 SOLON 555 2,279 2,834 SOLON INDUST. PARK 6161 COCHRAN 396 1,615 2,011 SOLON INDUST. PARK 5901 HARPER 350 1,526 1,876 SOLON INDUST. PARK 29125 SOLON 505 2,052 2,557 SOLON INDUST. PARK 6661 COCHRAN 245 1,019 1,264 SOLON INDUST. PARK 6521 DAVIS 128 524 652 SOLON INDUST. PARK 31900 SOLON-REAR 81 329 410 DYMENT DYMENT 816 5,204 6,020 COLUMBUS, OHIO - -------------- TWO EASTON OVAL TWO EASTON OVAL 2,488 16,478 18,966 PET FOODS DIST. PET FOODS DIST. 1,031 5,492 6,523 TUTTLE CRSG. METROCTR. III 887 3,758 4,645 6600 PORT ROAD 6600 PORT ROAD 2,725 22,131 24,856 TUTTLE CRSG. SCIOTO CORP. CTR. 1,100 3,481 4,581 SOUTH PTE. BLDG D 76 3,485 3,761 SOUTH PTE. BLDG E 79 2,254 2,533 TUTTLE CRSG. 4650 LAKEHURST (LITEL) 2,670 19,003 21,673 TUTTLE CRSG. 4600 LAKEHURST (STERLING 1) 1,524 12,822 14,346 TUTTLE CRSG. 4700 LAKEHURST (INDIANA INS.) 717 3,209 3,926 TUTTLE CRSG. STERLING 2 605 5,725 6,330 TUTTLE CRSG. JOHN ALDEN LIFE INS. 1,066 7,478 8,544 TUTTLE CRSG. CARDINAL HEALTH 1,932 10,719 12,651 TUTTLE CRSG. STERLING 3 1,601 8,482 10,083 TUTTLE CRSG. COMPMANAGEMENT 867 4,541 5,408 TUTTLE CRSG. STERLING 4 483 9,777 10,260 TUTTLE CRSG. 5555 PARK CTR. (XEROX) 1,580 9,189 10,769 TUTTLE CRSG. PARKWOOD PLACE 1,690 11,499 13,189 - 63 - TUTTLE CRSG. NATIONWIDE 4,815 18,380 23,195 TUTTLE CRSG. EMERALD II 495 3,084 3,579 TUTTLE CRSG. ATRIUM II PHASE I 1,649 10,460 12,109 VETERANS ADMIN. CLINIC VA HOSPITAL 703 9,748 10,451 WESTBELT 2190-2200 WESTBELT DR. 300 1,908 2,208 3800 ZANE TRACE DRIVE 3800 ZANE TRACE DRIVE (MBM) 170 2,396 2,566 3635 ZANE TRACE DRIVE 3635 ZANE TRACE DRIVE 236 1,871 2,107 BMW PARKING EXPANSION BMW PARKING EXPANSION 351 - 351 QWEST PARKING EXPANSION QWEST PARKING EXP. 201 - 201 DAYTON, OHIO - ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA 924 6,242 7,166 CHICAGO, ILLINOIS - ----------------- ABBOTT DRIVE BUILDING ABBOTT DRIVE BLDG. 91 848 939 JANICE AVENUE BUILDING JANICE AVENUE BLDG. 94 855 949 WOLF ROAD BUILDING WOLF ROAD BLDG. 179 1,593 1,772 TOUHY AVENUE BUILDING TOUHY AVENUE BLDG. 310 3,204 3,514 JARVIS AVENUE BUILDING JARVIS AVENUE BLDG. 462 4,378 4,840 BALLARD DRIVE BUILDING BALLARD DRIVE BLDG. 186 1,717 1,903 LAUREL DRIVE BUILDING LAUREL DRIVE BLDG. 98 945 1,043 KIRK ROAD BLDG KIRK ROAD BLDG. 203 1,907 2,110 ATRIUM II ATRIUM II 776 7,114 7,890 CROSSROADS BLDG 1 944 8,935 9,879 EXECUTIVE TOWERS I EXECUTIVE TOWERS I 2,670 4,724 27,394 EXECUTIVE TOWERS II EXECUTIVE TOWERS II 3,386 1,395 34,781 EXECUTIVE TOWERS III EXECUTIVE TOWERS III 3,512 2,517 36,029 ONE CONWAY PARK ONE CONWAY PARK 1,901 7,792 19,693 YORKTOWN OFFICE CTR. YORKTOWN OFFICE CTR. 872 8,311 9,183 DECATUR, ILLINOIS - ----------------- PARK 101 BUS. CTR. BLDG 3 280 3,294 3,574 PARK 101 BUS. CTR. BLDG 8 184 1,653 1,837 ILLINOIS POWER LND.LSE. ILLINOIS POWER LND.LSE. 212 - 212 BLOOMINGTON, ILLINOIS - --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA 786 8,380 9,166 CHAMPAIGN, ILLINOIS - ------------------- MARKET VIEW MARKET VIEW SHOP CTR. 755 6,611 7,366 WESTMONT, ILLINOIS - ------------------- OAKMONT CIRCLE OAKMONT TECH CTR. 1,501 8,450 9,951 OAKMONT CIRCLE OAKMONT CIRCLE OFFICE 2,438 13,877 16,315 ST. LOUIS, MISSOURI - ------------------- 1920 BELTWAY 1920 BELTWAY 614 1,497 2,111 CRAIG PARK CTR. CRAIG PARK CTR. 254 2,285 2,539 DUKEPORT 3 DUKEPORT 3 965 4,434 5,399 DUKEPORT 5 DUKEPORT 5 637 2,557 3,194 ALFA-LAVAL ALFA-LAVAL 1,158 5,399 6,557 EARTH CITY 3322 NGIC 2,615 10,748 13,363 EARTH CITY 3300 PTE. 70 1,186 7,480 8,666 MCI MCI 1,281 7,000 8,281 HORIZON BUS. CTR. HORIZON BUS. CTR. 344 2,499 2,843 I-170 CTR. I-170 CTR. 1,018 4,300 5,318 LAUMEIER OFFICE PARK BLDG I 1,384 10,154 11,538 LAUMEIER OFFICE PARK BLDG II 1,421 10,040 11,461 LAUMEIER OFFICE PARK BLDG IV 1,029 7,200 8,229 - 64 - MARYVILLE CTR. 500 MARYVILLE CTR. 3,402 24,101 27,503 MARYVILLE CTR. 530 MARYVILLE CTR. 2,219 15,042 17,261 MARYVILLE CTR. 550 MARYVILLE CTR. 1,996 12,145 14,141 MARYVILLE CTR. 635 MARYVILLE CTR. 3,048 17,813 20,861 MARYVILLE CTR. 655 MARYVILLE CTR. 1,860 12,814 14,674 MARYVILLE CTR. 540 MARYVILLE CTR. 2,219 13,881 16,100 RIVERPORT TOWER RIVERPORT TOWER 3,250 29,880 33,130 RIVERPORT DIST. A RIVERPORT DIST. A 242 2,213 2,455 EXPRESS SCRIPTS EXPRESS SCRIPTS SERVICE CTR. SERVICE CTR. 942 8,578 9,520 RIVERPORT DIST. B RIVERPORT DIST. B 216 1,964 2,180 SCRIPTS SCRIPTS - 237 237 ST. LOUIS BUS. CTR. BLDG A 194 1,743 1,937 ST. LOUIS BUS. CTR. BLDG B 250 2,249 2,499 ST. LOUIS BUS. CTR. BLDG C 166 1,492 1,658 ST. LOUIS BUS. CTR. BLDG D 168 1,513 1,681 SOUTHPORT I SOUTHPORT I 192 821 1,013 SOUTHPORT II SOUTHPORT II 151 657 808 SOUTHPORT COMMERCE CTR. SOUTHPORT COMMERCE CTR. 233 1,023 1,256 TWIN OAKS TWIN OAKS 566 8,293 8,859 WARSON COMMERCE CTR. WARSON COMMERCE CTR. 749 5,300 6,049 WESTMARK WESTMARK 1,206 10,545 11,751 WESTPORT WESTPORT CTR. I 1,714 6,197 7,911 WESTPORT WESTPORT CTR. II 921 2,800 3,721 WESTVIEW PLACE WESTVIEW PLACE 673 9,435 10,108 BLOOMINGTON, MINNESOTA - ---------------------- HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. 2,124 12,712 14,836 BROOKLYN PARK, MINNESOTA - ------------------------ 7300 NORTHLAND DRIVE 7300 NORTHLAND DRIVE 703 3,998 4,701 EAGAN, MINNESOTA - ----------------- EAGANDALE TECH CTR. EAGANDALE TECH CTR. 987 5,861 6,848 SILVER BELL COMMONS SILVER BELL COMMONS 250 1,415 1,665 PLYMOUTH, MINNESOTA - ------------------- PLYMOUTH OFFICE/ PLYMOUTH OFFICE/ TECH CTR. TECH CTR. 428 2,426 2,854 ST. PAUL, MINNESOTA - ------------------- UNIVERSITY CRSG. UNIVERSITY CRSG. 891 5,037 5,928 MINNEAPOLIS, MINNESOTA APOLLO DIST. CTR. APOLLO DIST. CTR. 880 5,468 6,348 BASS LAKE BUS. CTR. BASS LAKE BUS. CTR. 295 1,705 2,000 BROADWAY BUS. CTR III BROADWAY BUS. CTR III 144 818 962 BROADWAY BUS. CTR IV BROADWAY BUS. CTR IV 200 1,136 1,336 BROADWAY BUS. CTR V BROADWAY BUS. CTR V 166 939 1,105 BROADWAY BUS. CTR VI BROADWAY BUS. CTR VI 447 2,535 2,982 BROADWAY BUS. CTR VII BROADWAY BUS. CTR VII 241 1,448 1,689 BLOOMINGTON INDUST. CTR BLOOMINGTON INDUST. CTR 621 3,603 4,224 CAHILL BUS. CTR. CAHILL BUS. CTR. 507 2,923 3,430 CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 331 1,884 2,215 CHANHASSEN I CHANHASSEN I 370 2,096 2,466 CHANHASSEN II CHANHASSEN II 453 2,565 3,018 CORNERSTONE BUS. CTR CORNERSTONE BUS. CTR 1,454 8,263 9,717 CRYSTAL INDUST. CTR. CRYSTAL INDUST. CTR. 451 2,772 3,223 5219 BUILDING 5219 BUILDING 102 580 682 DECATUR BUS. CTR. DECATUR BUS. CTR. 431 2,467 2,898 EAGANDALE CRSG. EAGANDALE CRSG. 974 2,320 3,294 EDINA INTRCHG. I EDINA INTRCHG. I 630 3,622 4,252 EDINA INTRCHG. II EDINA INTRCHG. II 432 2,457 2,889 - 65 - EDINA INTRCHG. III EDINA INTRCHG. III 487 2,770 3,257 EDINA INTRCHG. IV EDINA INTRCHG. IV 228 1,610 1,838 EDINA INTRCHG. V EDINA INTRCHG. V 971 5,528 6,499 EDINA INTRCHG. VI EDINA INTRCHG. VI 472 2,684 3,156 EDINA INTRCHG. VII EDINA INTRCHG. VII 180 1,142 1,322 ENTERPRISE INDUST. CTR. ENTERPRISE INDUST. CTR. 864 5,511 6,375 ENCORE PARK ENCORE PARK 974 5,604 6,578 EDINA REALTY EDINA REALTY 349 1,977 2,326 GOLDEN HILLS I GOLDEN HILLS I 1,104 6,259 7,363 GOLDEN TRIANGLE TECH CTR GOLDEN TRIANGLE TECH CTR 1,456 8,253 9,709 PROFESSIONAL PLAZA PROFESSIONAL PLAZA 467 2,688 3,155 PROFESSIONAL PLAZA IV PROFESSIONAL PLAZA IV 246 1,415 1,661 CLIFF ROAD INDUST. CTR. CLIFF ROAD INDUST. CTR. 255 1,491 1,746 PROFESSIONAL PLAZA III PROFESSIONAL PLAZA III 234 1,356 1,590 PROFESSIONAL PLAZA II PROFESSIONAL PLAZA II 216 1,257 1,473 LYNDALE COMMONS 1 LYNDALE COMMONS 1 246 1,494 1,740 LYNDALE COMMONS 2 LYNDALE COMMONS 2 180 1,049 1,229 HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR. N. 773 4,537 5,310 HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. 900 5,172 6,072 LARC INDUST. PARK I LARC INDUST. PARK I 280 1,610 1,890 LARC INDUST. PARK II LARC INDUST. PARK II 224 1,295 1,519 LARC INDUST. PARK III LARC INDUST. PARK III 135 770 905 LARC INDUST. PARK IV LARC INDUST. PARK IV 90 522 612 LARC INDUST. PARK V LARC INDUST. PARK V 96 545 641 LARC INDUST. PARK VI LARC INDUST. PARK VI 373 2,113 2,486 LARC INDUST. PARK VII LARC INDUST. PARK VII 242 1,514 1,756 MEDICINE LAKE MEDICINE LAKE INDUST. CTR. INDUST. CTR. 1,145 6,511 7,656 MEDICINE LAKE MEDICINE LAKE PROF. BUILDING PROF. BUILDING 76 432 508 NORMAN CTR. I NORMAN CTR. I 644 3,650 4,294 NORMAN CTR. II NORMAN CTR. II 806 4,568 5,374 NORMAN CTR. III NORMAN CTR. III 263 1,501 1,764 NORMAN CTR. IV NORMAN CTR. IV 577 3,269 3,846 NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE 1,950 11,050 13,000 NORTH PLAZA NORTH PLAZA 303 1,745 2,048 NORTH STAR TITLE NORTH STAR TITLE 539 3,082 3,621 OXFORD INDUST. OXFORD INDUST. 102 585 687 PAKWA BUS. PARK I PAKWA BUS. PARK I 347 2,116 2,463 PAKWA BUS. PARK II PAKWA BUS. PARK II 215 1,233 1,448 PAKWA BUS. PARK III PAKWA BUS. PARK III 248 1,427 1,675 PENN CORPORATE BUILDING PENN CORPORATE BLDG. 312 1,771 2,083 10801 RED CIRCLE DRIVE 10801 RED CIRCLE DR. 527 3,043 3,570 SANDBURG INDUST. CTR. SANDBURG INDUST. CTR. 451 2,566 3,017 SIBLEY INDUST. CTR. I SIBLEY INDUST. CTR. I 356 2,197 2,553 SIBLEY INDUST. CTR. II SIBLEY INDUST. CTR. II 211 1,339 1,550 SIBLEY INDUST. CTR. III SIBLEY INDUST. CTR. III 211 1,264 1,475 SOUTH PLAZA SOUTH PLAZA 396 2,260 2,656 JOHNSON BUILDING JOHNSON BUILDING 552 3,140 3,692 TRAPP ROAD I TRAPP ROAD I 690 3,934 4,624 TRAPP ROAD BLDG II TRAPP ROAD BLDG II 1,250 7,158 8,408 TYROL WEST TYROL WEST 380 2,163 2,543 WESTSIDE BUS. PARK WESTSIDE BUS. PARK 1,176 6,713 7,889 YANKEE PLACE YANKEE PLACE 2,792 16,082 18,874 801 ZANE AVE N. 801 ZANE AVE N. 365 2,077 2,442 CHILIES GRND.LSE. CHILIES GRND.LSE. 980 - 980 KNOX LND.LSE. KNOX LND.LSE. 1,067 - 1,067 OLIVE GARDEN GRND.LSE. OLIVE GARDEN GRND.LSE. 920 - 920 UNIVERSITY LND.LSE. UNIVERSITY LND.LSE. 296 - 296 ELIMINATIONS ELIMINATIONS - (132) (132) -------- --------- --------- TOTALS 312,022 2,091,757 2,403,779 ======== ========= =========
- 66 -
ACCUMU. DATE OF DATE DEPR. LOCATION/DEVELOPMENT BUILDING DEPR. CONST. ACQU. LIFE - ----------------------- --------- ------ ------- ----- ----- INDIANAPOLIS, INDIANA - ---------------------- CASTLETON CORNER CUB CTR. 1,671 1986 1986 (3) CASTLETON CORNER MICHAEL'S PLAZA 557 1984 1993 (3) COMMUNITY MOB COMMUNITY MOB 334 1995 1995 (3) PALOMAR BLDG. PALOMAR BUS. CTR. 155 1973 1995 (3) FRANKLIN ROAD FRANKLIN ROAD BUS. CTR. BUS. CTR. 1,390 1962 1995 (3) GEORGETOWN CTR. BLDG 1 139 1987 1996 (3) GEORGETOWN CTR. BLDG 2 148 1987 1996 (3) GEORGETOWN CTR. BLDG 3 109 1987 1996 (3) NAMPAC BLDG. NAMPAC BLDG. 162 1974 1995 (3) 6060 GUION RD. 6060 GUION RD. 221 1968 1996 (3) GREENWOOD CORNER GREENWOOD CORNER SHOPPES 1,111 1986 1986 (3) GREENWOOD CORNER FIRST INDIANA BRANCH 34 1988 1993 (3) HAMILTON CRSG. BLDG. 1 459 1989 1993 (3) HAMILTON CRSG. BLDG. 2 111 1997 1997 (3) HILLSDALE TECHNECTR. HILLSDALE BLDG 4 754 1987 1993 (3) HILLSDALE TECHNECTR. HILLSDALE BLDG 5 549 1987 1993 (3) HILLSDALE TECHNECTR. HILLSDALE BLDG 6 571 1987 1993 (3) 8465 KEYSTONE 8465 KEYSTONE 135 1983 1995 (3) F.C. TUCKER F.C. TUCKER BLDG. 37 1978 1993 (3) 8555 KEYSTONE 8555 KEYSTONE 319 1985 1997 (3) 3520 COMMERCE CRSG. 3520 COMMERCE CRSG. 301 1976 1993 (3) 4750 KENTUCKY AVENUE 4750 KENTUCKY AVE. 148 1974 1996 (3) NORTH AIRPORT PARK BLDG 2 664 1997 1997 (3) ONE N. CAPITOL ONE N. CAPITOL - 1996 1996 (3) PARK 100 BUS. PARK PARK 100 BLDG 34 617 1979 1986 (3) PARK 100 BUS. PARK PARK 100 BLDG 79 448 1988 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 80 379 1998 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 83 368 1989 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 84 369 1989 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 95 651 1993 1994 (3) PARK 100 BUS. PARK PARK 100 BLDG 96 1,528 1994 1994 (3) PARK 100 BUS. PARK PARK 100 BLDG 97 1,159 1994 1994 (3) PARK 100 BUS. PARK PARK 100 BLDG 98 1,466 1968 1994 (3) PARK 100 BUS. PARK PARK 100 BLDG 100 439 1995 1995 (3) PARK 100 BUS. PARK PARK 100 BLDG 107 224 1984 1995 (3) PARK 100 BUS. PARK PARK 100 BLDG 109 642 1985 1986 (3) PARK 100 BUS. PARK PARK 100 BLDG 116 937 1988 1988 (3) PARK 100 BUS. PARK PARK 100 BLDG 118 336 1988 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 119 541 1989 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 121 145 1989 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 122 559 1990 1993 (3) PARK 100 BUS. PARK PARK 100 BLDG 125 908 1994 1994 (3) PARK 100 BUS. PARK PARK 100 BLDG 126 225 1984 1994 (3) PARK 100 BUS. PARK PARK 100 BLDG 127 241 1995 1995 (3) PARK 100 BUS. PARK PARK 100 BLDG 128 1,243 1996 1996 (3) PARK 100 BUS. PARK PARK 100 BLDG 129 464 1996 1996 (3) PARK 100 BUS. PARK PARK 100 BLDG 130 426 1996 1996 (3) PARK 100 BUS. PARK PARK 100 BLDG 131 513 1997 1997 (3) PARK 100 BUS. PARK PARK 100 BLDG 132 109 1997 1997 (3) PARK 100 BUS. PARK PARK 100 BLDG 133 26 1997 1997 (3) PARK 100 BUS. PARK PARK 100 BLDG 134 89 1998 1998 (3) PARK 100 BUS. PARK WOODLAND CORP.CTR.1 181 1998 1998 (3) PARK FLETCHER BLDG 14 140 1978 1995 (3) PARKWOOD CRSG. ONE PARKWOOD 891 1989 1995 (3) PARKWOOD CRSG. TWO PARKWOOD 213 1996 1996 (3) PARKWOOD CRSG. THREE PARKWOOD 622 1997 1997 (3) PARKWOOD CRSG. FOUR PARKWOOD 156 1998 1998 (3) SOFTWARE SOFTWARE ARTISTRY, INC. ARTISTRY, INC. 246 1998 1998 (3) SOUTH PARK BUS. CTR. BLDG 1 556 1989 1993 (3) SOUTH PARK BUS. CTR. BLDG 2 684 1990 1993 (3) SOUTH PARK BUS. CTR. BLDG 3 575 1990 1993 (3) SHADELAND STA. 7351 SHADELAND 2-STY 254 1983 1993 (3) SHADELAND STA. 7420-86 SHADELAND 1,072 1984 1986 (3) SHADELAND STA. 7240 SHADELAND 3-STY 1,282 1985 1993 (3) - 60 - SHADELAND STA. 7330 SHADELAND STA. 1,051 1988 1988 (3) SHADELAND STA. 7369 SHADELAND STA. 165 1989 1993 (3) SHADELAND STA. 7340 SHADELAND 2-STY 360 1989 1993 (3) SHADELAND STA. 7400 SHADELAND STA. 588 1990 1993 (3) ST. FRANCIS MEDICAL ST. FRANCIS MEDICAL 1,166 1995 1995 (3) WOODFIELD AT THE CRSG. 2 8440 WOODFIELD 1,664 1987 1993 (3) WOODFIELD AT THE CRSG. 3 8425 WOODFIELD 3,474 1989 1993 (3) 4316 W.MINNESOTA 4316 W.MINNESOTA 146 1970 1996 (3) NORCO WINDOWS LND.LSE. NORCO WINDOWS LND.LSE. 7 N/A 1995 (3) UPS LND.LSE. UPS LND.LSE. 12 N/A 1997 (3) NORGATE LND.LSE. NORGATE LND.LSE. - N/A 1995 (3) ZOLLMAN LND.LSE. ZOLLMAN LND.LSE. - N/A 1994 (3) BRYLANE LND.LSE. BRYLANE LND.LSE. 17 N/A 1994 (3) SOUTH PARK GRND.S SOUTH PARK GRND.S - N/A 1996 (3) FORT WAYNE, INDIANA - ------------------- COLDWATER CRSG. COLDWATER CRSG. 1,988 1990 1994 (3) LEBANON, INDIANA - ---------------- LEBANON BUS. PARK AMERICAN AIR FILTER 305 1996 1996 (3) LEBANON BUS. PARK PURITY WHOLESALE 339 1997 1997 (3) LEBANON BUS. PARK PAMIDA 275 1997 1997 (3) LEBANON BUS. PARK PRENTICE HALL 520 1998 1998 (3) LEBANON BUS. PARK GENERAL CABLE 142 1998 1998 (3) NASHVILLE, TENNESSEE - -------------------- LAKEVIEW PLACE ONE LAKEVIEW PLACE 26 1986 1998 (3) LAKEVIEW PLACE TWO LAKEVIEW PLACE 24 1988 1998 (3) GREENBRIAR BUS. PARK KEEBLER 120 1985 1995 (3) GREENBRIAR BUS. PARK GREENBRIAR BUS. PARK 757 1986 1993 (3) HAYWOOD OAKS TECHNECTR. BLDG 2 278 1988 1993 (3) HAYWOOD OAKS TECHNECTR. BLDG 3 423 1988 1993 (3) HAYWOOD OAKS TECHNECTR. BLDG 4 330 1988 1993 (3) HAYWOOD OAKS TECHNECTR. BLDG 5 684 1988 1993 (3) HAYWOOD OAKS TECHNECTR. BLDG 6 925 1989 1993 (3) HAYWOOD OAKS TECHNECTR. BLDG 7 438 1995 1995 (3) HAYWOOD OAKS TECHNECTR. BLDG 8 379 1997 1997 (3) CREEKSIDE CRSG. ONE ONE CREEKSIDE CRSG. 189 1998 1998 (3) HEBRON, KENTUCKY - ---------------- SOUTHPARK BUS. CTR. CR SERVICES 461 1994 1994 (3) SKYPORT BUS. PARK BLDG 1 380 1996 1997 (3) KENTUCKY SOUTHPARK BLDG 1 562 1990 1993 (3) KENTUCKY SOUTHPARK BLDG 3 481 1991 1993 (3) SOUTHPARK BUS. CTR. REDKEN LABS 366 1994 1994 (3) FLORENCE, KENTUCKY - ------------------ EMPIRE COMMERCE CTR. EMPIRE COMMERCE CTR. 215 1973 1996 (3) SOFA EXPRESS-FLORENCE SOFA EXPRESS-FLORENCE 40 1997 1997 (3) CINCINNATI, OHIO - --------------- ONE ASHVIEW PLACE ONE ASHVIEW PLACE 443 1989 1997 (3) BLUE ASH OFFICE CTR VI BLUE ASH OFF. CTR VI 93 1989 1997 (3) CORNELL COMMERCE CTR. CORNELL COMM. CTR. 478 1989 1996 (3) CREEK ROAD BLDG 1 46 1971 1996 (3) CREEK ROAD BLDG 2 63 1971 1996 (3) ZUSSMAN BLDG 311 ELM 1,024 1902 1993 (3) 312 ELM 312 ELM 7,031 1902 1993 (3) ENTERPRISE BUS. PARK BLDG 1 902 1990 1993 (3) ENTERPRISE BUS. PARK BLDG 2 1,022 1990 1993 (3) ENTERPRISE BUS. PARK BLDG A 69 1987 1995 (3) ENTERPRISE BUS. PARK BLDG B 112 1988 1995 (3) - 61 - ENTERPRISE BUS. PARK BLDG D 373 1989 1995 (3) EASTGATE SQ. EASTGATE SQ. 485 1990 1995 (3) GARDEN RIDGE (EASTGATE) GARDEN RIDGE (EASTGATE) - 1998 1998 (3) TRI-COUNTY EXECUTIVE PLAZA I 284 1980 1996 (3) TRI-COUNTY EXECUTIVE PLAZA II 270 1981 1996 (3) TRI-COUNTY EXECUTIVE PLAZA III - 1998 1998 (3) FAIRFIELD BUS. CTR. D FAIRFIELD BUS. CTR. D 146 1990 1995 (3) FAIRFIELD BUS. CTR. E FAIRFIELD BUS. CTR. E 226 1990 1995 (3) GOVERNOR'S PLAZA KOHL'S DEPT. STORE 388 1994 1994 (3) GOVERNOR'S PLAZA SOFA EXPRESS 67 1995 1995 (3) GOVERNOR'S PLAZA OFFICE MAX, INC. 112 1995 1995 (3) FIDELITY DRIVE BLDG. FIDELITY DRIVE BLDG. 965 1972 1986 (3) PARK 50 TECHNECTR. BLDG 17 2,229 1985 1986 (3) PARK 50 TECHNECTR. BLDG 20 1,954 1987 1988 (3) PARK 50 TECHNECTR. BLDG 25 720 1989 1993 (3) PARK 50 TECHNECTR. BLDG 26 (SDRC) 2,593 1991 1993 (3) GOVERNOR'S HILL 8790 GOVERNOR'S HILL 823 1985 1991 (3) GOVERNOR'S HILL 8700 GOVERNOR'S HILL 767 1985 1993 (3) GOVERNOR'S HILL 8800 GOVERNOR'S HILL 1,228 1985 1986 (3) GOVERNOR'S HILL 8600 GOVERNOR'S HILL 2,861 1986 1991 (3) GOVERNOR'S PLAZA GOVERNOR'S PLAZA 1,172 1990 1993 (3) GOVERNOR'S POINTE 4770 BLDG 2,261 1986 1988 (3) GOVERNOR'S POINTE 4700 BLDG 1,647 1987 1988 (3) GOVERNOR'S POINTE 4900 BLDG 1,469 1987 1989 (3) GOVERNOR'S POINTE 4705 BLDG 1,426 1988 1993 (3) GOVERNOR'S POINTE 4800 BLDG 1,126 1989 1993 (3) GOVERNOR'S POINTE 4605 BLDG 2,510 1990 1993 (3) GOVERNOR'S POINTE RETAIL SOUTH (BIGG'S) 538 1996 1996 (3) GOVERNOR'S POINTE RETAIL N. (LOWE'S) 261 1997 1997 (3) GOVERNOR'S POINTE ANTHEM PRESCRIP. MGMT. 383 1997 1997 (3) GOVERNOR'S POINTE 4660 BLDG 352 1997 1997 (3) GOVERNOR'S POINTE 4680 BLDG 95 1998 1998 (3) FRANCISCAN HEALTH FRANCISCAN HEALTH 263 1996 1996 (3) HUNTINGTON BANK BLDG. HUNTINGTON BANK BLDG. 13 1986 1996 (3) KING'S MALL SHOPPING CTR. KING'S AUTO MALL I 1,277 1990 1993 (3) KING'S MALL SHOPPING CTR. KING'S AUTO MALL II 639 1988 1989 (3) 7910 KENTUCKY DRIVE 7910 KENTUCKY DRIVE 39 1980 1997 (3) 7920 KENTUCKY DRIVE 7920 KENTUCKY DRIVE 46 1974 1997 (3) KENWOOD KENWOOD EXECUTIVE CTR. 100 1981 1997 (3) KENWOOD COMMONS BLDG I 1,810 1986 1998 (3) KENWOOD COMMONS BLDG II 982 1986 1998 (3) LAKE FOREST PLACE LAKE FOREST PLACE 1,269 1985 1996 (3) MONTGOMERY CROSSING PHASE I 99 1993 1993 (3) GOVERNOR'S PLAZA SPORTS UNLIMITED 419 1994 1994 (3) MOSTELLER DIST. CTR. MOSTELLER DIST.CTR. 851 1957 1996 (3) MOSTELLER DIST. CTR. II MOSTELLER DIST.CTR. 2 434 1997 1997 (3) PFEIFFER ROAD OHIO NATIONAL 2,448 1996 1996 (3) PERIMETER PARK BLDG. A 72 1991 1996 (3) PERIMETER PARK BLDG. B 63 1991 1996 (3) S & L DATA 312 PLUM 4,080 1987 1993 (3) REMINGTON PARK BLDG A 49 1982 1997 (3) REMINGTON PARK BLDG B 49 1982 1997 (3) GALYAN'S TRADING CO. GALYAN'S TRADING CO. 355 1984 1994 (3) TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. 76 1998 1998 (3) TRI-COUNTY OFFICE PARK TRI-COUNTY OFF.PK. 1,023 1971 1993 (3) TRIANGLE OFFICE PARK TRIANGLE OFF.PK. 5,166 1965 1986 (3) TUTTLE CRSG. TUTTLE RETAIL CTR. 566 1995 1995 (3) UNIVERSITY MVG. UNIVERSITY MVG. 161 1991 1995 (3) WESTERN HILLS MKTPL. WESTERN HILLS MKTPL. 48 1998 1998 (3) WEST LAKE CTR. WEST LAKE CTR. 1,292 1981 1996 (3) WORLD PARK WORLD PARK BLDG 5 1,305 1987 1990 (3) WORLD PARK WORLD PARK BLDG 6 1,125 1987 1990 (3) WORLD PARK WORLD PARK BLDG 7 1,058 1987 1990 (3) WORLD PARK WORLD PARK BLDG 8 776 1989 1993 (3) WORLD PARK WORLD PARK BLDG 9 544 1989 1993 (3) WORLD PARK WORLD PARK BLDG 11 737 1989 1993 (3) WORLD PARK WORLD PARK BLDG 14 523 1989 1993 (3) - 62 - WORLD PARK WORLD PARK BLDG 15 431 1990 1993 (3) WORLD PARK WORLD PARK BLDG 16 419 1989 1993 (3) WORLD PARK WORLD PARK BLDG 18 182 1997 1997 (3) WORLD PARK WORLD PARK BLDG 28 181 1998 1998 (3) WORLD PARK WORLD PARK BLDG 29 252 1998 1998 (3) WORLD PARK WORLD PARK BLDG 31 - 1998 1998 (3) WORLD PARK AT UNION CTR. WORLD PARK UNION CTR I 2 1998 1998 (3) APPLEBEES LND.LSE. APPLEBEES LND.LSE. 11 N/A 1997 (3) LAZARUS LND.LSE. LAZARUS LND.LSE. - N/A 1996 (3) UNO'S LND.LSE. UNO'S LND.LSE. 22 N/A 1997 (3) CLEVELAND, OHIO - --------------- CORP. CTR. I CORP. CTR. I 538 1985 1996 (3) CORP. CTR. II CORP. CTR. II 582 1987 1996 (3) CORP. CIRCLE CORP. CIRCLE 635 1983 1996 (3) ONE CORP. EXCHANGE ONE CORP. EXCHANGE 669 1989 1996 (3) CORP. PLAZA I CORP. PLAZA I 1,098 1989 1996 (3) CORP. PLAZA II CORP. PLAZA II 917 1991 1996 (3) CORP. PLACE CORP. PLACE 432 1988 1996 (3) PARK 82 BLDG 2 6 1998 1998 (3) PARK 82 STRONGSVILLE BLDG B 54 1998 1998 (3) ENTERPRISE BUS. PARK ENTERPRISE PARKWAY 16 1974/1995 1998 (3) FOUNTAIN PARKWAY BLDG I FOUNTAIN PKWY. BLDG I 63 1998 1998 (3) FREEDOM SQ. FREEDOM SQ. I 295 1980 1996 (3) FREEDOM SQ. FREEDOM SQ. II 888 1987 1996 (3) FREEDOM SQ. FREEDOM SQ. III 459 1997 1997 (3) JOHNSON CONTROLS JOHNSON CONTROLS 99 1972 1997 (3) LANDERBROOK CORP. CTR LANDERBROOK CORP. CTR 577 1997 1997 (3) LANDERBROOK CORP. CTR LANDERBROOK CORP. CTR II 16 1998 1998 (3) 6111 OAK TREE 6111 OAK TREE 165 1979 1997 (3) PARK CTR. BLDG I 31 1998 1998 (3) ROCK RUN CORP. PARK ROCK RUN - N. 434 1984 1996 (3) ROCK RUN CORP. PARK ROCK RUN-CTR. 537 1985 1996 (3) ROCK RUN CORP. PARK ROCK RUN - S. 460 1986 1996 (3) SOLON INDUST. PARK 30600 CARTER 110 1971 1997 (3) SOLON INDUST. PARK 6230 COCHRAN 75 1997 1997 (3) SOLON INDUST. PARK 31900 SOLON-FRONT 57 1974 1997 (3) SOLON INDUST. PARK 5821 SOLON 69 1970 1997 (3) SOLON INDUST. PARK 6161 COCHRAN 50 1978 1997 (3) SOLON INDUST. PARK 5901 HARPER 46 1970 1997 (3) SOLON INDUST. PARK 29125 SOLON 61 1980 1997 (3) SOLON INDUST. PARK 6661 COCHRAN 30 1979 1997 (3) SOLON INDUST. PARK 6521 DAVIS 16 1979 1997 (3) SOLON INDUST. PARK 31900 SOLON-REAR 10 1982 1997 (3) DYMENT DYMENT 216 1988 1997 (3) COLUMBUS, OHIO - -------------- TWO EASTON OVAL TWO EASTON OVAL 242 1996 1998 (3) PET FOODS DIST. PET FOODS DIST. 573 1993 1993 (3) TUTTLE CRSG. METROCTR. III 479 1983 1996 (3) 6600 PORT ROAD 6600 PORT ROAD 767 1995 1997 (3) TUTTLE CRSG. SCIOTO CORP. CTR. 191 1987 1996 (3) SOUTH POINTE BLDG D 134 1997 1997 (3) SOUTH POINTE BLDG E 75 1997 1997 (3) TUTTLE CRSG. 4650 LAKEHURST (LITEL) 2,415 1990 1993 (3) TUTTLE CRSG. 4600 LAKEHURST (STERLING 1) 1,632 1990 1993 (3) TUTTLE CRSG. 4700 LAKEHURST (INDIANA INS.) 788 1994 1994 (3) TUTTLE CRSG. STERLING 2 526 1995 1995 (3) TUTTLE CRSG. JOHN ALDEN LIFE INS. 717 1995 1995 (3) TUTTLE CRSG. CARDINAL HEALTH 1,732 1995 1995 (3) TUTTLE CRSG. STERLING 3 777 1996 1995 (3) TUTTLE CRSG. COMPMANAGEMENT 172 1997 1997 (3) TUTTLE CRSG. STERLING 4 225 1998 1998 (3) TUTTLE CRSG. 5555 PARK CTR. (XEROX) 1,051 1992 1994 (3) TUTTLE CRSG. PARKWOOD PLACE 617 1997 1997 (3) - 63 - TUTTLE CRSG. NATIONWIDE 1,843 1996 1996 (3) TUTTLE CRSG. EMERALD II 11 1998 1998 (3) TUTTLE CRSG. ATRIUM II PHASE I 439 1998 1998 (3) VETERANS ADMIN. CLINIC VA HOSPITAL 1,017 1994 1994 (3) WESTBELT 2190-2200 WESTBELT DRIVE 13 1986 1998 (3) 3800 ZANE TRACE DRIVE 3800 ZANE TRACE DRIVE (MBM) 205 1978 1994 (3) 3635 ZANE TRACE DRIVE 3635 ZANE TRACE DR. 27 1980 1998 (3) BMW PARKING EXP. BMW PARKING EXP. 4 N/A 1998 (3) QWEST PARKING EXP. QWEST PARKING EXP. - N/A 1998 (3) DAYTON, OHIO - ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA 1,637 1988 1988 (3) CHICAGO, ILLINOIS - ----------------- ABBOTT DRIVE BLDG. ABBOTT DRIVE BLDG. 19 1989 1998 (3) JANICE AVENUE BLDG. JANICE AVENUE BLDG. 18 1956 1998 (3) WOLF ROAD BLDG. WOLF ROAD BLDG. 34 1966/69 1998 (3) TOUHY AVENUE BLDG. TOUHY AVENUE BLDG. 63 1971 1988 (3) JARVIS AVENUE BLDG. JARVIS AVENUE BLDG. 91 1969 1988 (3) BALLARD DRIVE BLDG. BALLARD DRIVE BLDG. 36 1985 1998 (3) LAUREL DRIVE BLDG. LAUREL DRIVE BLDG. 20 1981 1988 (3) KIRK ROAD BLDG KIRK ROAD BLDG 39 1990 1998 (3) ATRIUM II ATRIUM II 158 1986 1998 (3) CROSSROADS BLDG 1 182 1998 1998 (3) EXECUTIVE TOWERS I EXECUTIVE TOWERS I 896 1983 1997 (3) EXECUTIVE TOWERS II EXECUTIVE TOWERS II 1,085 1984 1997 (3) EXECUTIVE TOWERS III EXECUTIVE TOWERS III 1,162 1987 1997 (3) ONE CONWAY PARK ONE CONWAY PARK 292 1989 1998 (3) YORKTOWN OFFICE CTR. YORKTOWN OFFICE CTR. 119 1979/80/81 1998 (3) DECATUR, ILLINOIS - ----------------- PARK 101 BUS. CTR. BLDG 3 1,210 1979 1986 (3) PARK 101 BUS. CTR. BLDG 8 535 1980 1986 (3) ILLINOIS POWER LND.LSE. ILLINOIS POWER LND.LSE. - N/A 1994 (3) BLOOMINGTON, ILLINOIS - --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA 2,165 1987 1988 (3) CHAMPAIGN, ILLINOIS - ------------------- MARKET VIEW MARKET VIEW SHOPPING CTR. 2,154 1985 1986 (3) WESTMONT, ILLINOIS - ------------------ OAKMONT CIRCLE OAKMONT TECH CTR. 35 1989 1998 (3) OAKMONT CIRCLE OAKMONT CIRCLE OFFICE 58 1990 1998 (3) ST. LOUIS, MISSOURI - ------------------- 1920 BELTWAY 1920 BELTWAY 91 1986 1996 (3) CRAIG PARK CTR. CRAIG PARK CTR. 2 1984 1998 (3) DUKEPORT 3 DUKEPORT 3 167 1998 1998 (3) DUKEPORT 5 DUKEPORT 5 5 1998 1998 (3) ALFA-LAVAL ALFA-LAVAL 291 1996 1996 (3) EARTH CITY 3322 NGIC 456 1987 1997 (3) EARTH CITY 3300 POINTE 70 324 1989 1997 (3) MCI MCI 212 1998 1998 (3) HORIZON BUS. CTR. HORIZON BUS. CTR. 47 1985 1998 (3) I-170 CTR. I-170 CTR. 296 1986 1996 (3) LAUMEIER OFFICE PARK BLDG I 1,098 1987 1995 (3) LAUMEIER OFFICE PARK BLDG II 1,027 1988 1995 (3) LAUMEIER OFFICE PARK BLDG IV 135 1987 1998 (3) - 64 - MARYVILLE CTR. 500 MARYVILLE CTR. 819 1984 1997 (3) MARYVILLE CTR. 530 MARYVILLE CTR. 470 1990 1997 (3) MARYVILLE CTR. 550 MARYVILLE CTR. 379 1988 1997 (3) MARYVILLE CTR. 635 MARYVILLE CTR. 668 1987 1997 (3) MARYVILLE CTR. 655 MARYVILLE CTR. 400 1994 1997 (3) MARYVILLE CTR. 540 MARYVILLE CTR. 472 1990 1997 (3) RIVERPORT TOWER RIVERPORT TOWER 961 1991 1997 (3) RIVERPORT DIST. A RIVERPORT DIST. A 70 1990 1997 (3) EXPRESS SCRIPTS SER.CTR. EXPRESS SCRIPTS SER.CTR. 271 1992 1997 (3) RIVERPORT DIST. B RIVERPORT DIST. B 61 1989 1997 (3) SCRIPTS SCRIPTS - 1998 1998 (3) ST. LOUIS BUS. CTR. BLDG A 1 1987 1998 (3) ST. LOUIS BUS. CTR. BLDG B 2 1986 1998 (3) ST. LOUIS BUS. CTR. BLDG C 1 1986 1998 (3) ST. LOUIS BUS. CTR. BLDG D 1 1987 1998 (3) SOUTHPORT I SOUTHPORT I 26 1997 1997 (3) SOUTHPORT II SOUTHPORT II 23 1978 1997 (3) SOUTHPORT COMMERCE CTR. SOUTHPORT COMMERCE CTR. 38 1978 1997 (3) TWIN OAKS TWIN OAKS 295 1994 1997 (3) WARSON COMMERCE CTR. WARSON COMMERCE CTR. 98 1987/88/97 1998 (3) WESTMARK WESTMARK 818 1987 1995 (3) WESTPORT WESTPORT CTR. I 155 1998 1998 (3) WESTPORT WESTPORT CTR. II 80 1998 1998 (3) WESTVIEW PLACE WESTVIEW PLACE 1,020 1988 1995 (3) BLOOMINGTON, MINNESOTA - ---------------------- HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. 102 1998 1998 (3) BROOKLYN PARK, MINNESOTA - ------------------------ 7300 NORTHLAND DRIVE 7300 NORTHLAND DR. 26 1980 1998 (3) EAGAN, MINNESOTA - ---------------- EAGANDALE TECH CTR. EAGANDALE TECH CTR. 40 1998 1998 (3) SILVER BELL COMMONS SILVER BELL COMMONS - PLYMOUTH, MINNESOTA - ------------------- PLYMOUTH OFFICE/TECH CTR PLYMOUTH OFFICE/ TECH CTR 2 1986 1998 (3) ST. PAUL, MINNESOTA - ------------------- UNIVERSITY CRSG. UNIVERSITY CRSG. 85 1990 1998 (3) MINNEAPOLIS, MINNESOTA - ---------------------- APOLLO DIST. CTR. APOLLO DIST. CTR. 182 1997 1997 (3) BASS LAKE BUS. CTR. BASS LAKE BUS. CTR. 66 1981 1997 (3) BROADWAY BUS. CTR III BROADWAY BUS. CTR III 11 1983 1998 (3) BROADWAY BUS. CTR IV BROADWAY BUS. CTR IV 15 1983 1998 (3) BROADWAY BUS. CTR V BROADWAY BUS. CTR V 12 1983 1998 (3) BROADWAY BUS. CTR VI BROADWAY BUS. CTR VI 33 1983 1998 (3) BROADWAY BUS. CTR VII BROADWAY BUS. CTR VII 83 1983 1998 (3) BLOOMINGTON INDUST. CTR. BLOOMINGTON INDUST. CTR. 104 1963 1997 (3) CAHILL BUS. CTR. CAHILL BUS. CTR. 93 1980 1997 (3) CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 56 1976 1997 (3) CHANHASSEN I CHANHASSEN I 27 1983 1998 (3) CHANHASSEN II CHANHASSEN II 33 1986 1998 (3) CORNERSTONE BUS. CTR. CORNERSTONE BUS. CTR. 243 1996 1997 (3) CRYSTAL INDUST. CTR. CRYSTAL INDUST. CTR. 120 1974 1997 (3) 5219 BLDG. 5219 BLDG. 8 1965 1998 (3) DECATUR BUS. CTR. DECATUR BUS. CTR. 73 1982 1997 (3) EAGANDALE CRSG. EAGANDALE CRSG. 9 1998 1998 (3) EDINA INTRCHG. I EDINA INTRCHG. I 112 1995 1997 (3) EDINA INTRCHG. II EDINA INTRCHG. II 72 1980 1997 (3) - 65 - EDINA INTRCHG. III EDINA INTRCHG. III 81 1981 1997 (3) EDINA INTRCHG. IV EDINA INTRCHG. IV 58 1974 1997 (3) EDINA INTRCHG. V EDINA INTRCHG. V 167 1974 1997 (3) EDINA INTRCHG. VI EDINA INTRCHG. VI 79 1967 1998 (3) EDINA INTRCHG. VII EDINA INTRCHG. VII 11 1970 1998 (3) ENTERPRISE INDUST. CTR. ENTERPRISE INDUST.CTR. 180 1979 1997 (3) ENCORE PARK ENCORE PARK 172 1977 1997 (3) EDINA REALTY EDINA REALTY 29 1965 1998 (3) GOLDEN HILLS I GOLDEN HILLS I 92 1996 1998 (3) GOLDEN TRIANGLE TECH CTR. GOLDEN TRIANGLE TECH CTR. 121 1997 1998 (3) PROFESSIONAL PLAZA PROFESSIONAL PLAZA 56 1986 1998 (3) PROFESSIONAL PLAZA IV PROFESSIONAL PLAZA IV 28 1980 1998 (3) CLIFF ROAD INDUST. CTR. CLIFF ROAD INDUST. CTR. 39 1972 1998 (3) PROFESSIONAL PLAZA III PROFESSIONAL PLAZA III 27 1985 1998 (3) PROFESSIONAL PLAZA II PROFESSIONAL PLAZA II 35 1984 1998 (3) LYNDALE COMMONS 1 LYNDALE COMMONS 1 32 1981 1998 (3) LYNDALE COMMONS 2 LYNDALE COMMONS 2 46 1985 1998 (3) HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR.N. 129 1979 1997 (3) HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR.S. 150 1979 1997 (3) LARC INDUST. PARK I LARC INDUST. PARK I 50 1977 1997 (3) LARC INDUST. PARK II LARC INDUST. PARK II 52 1976 1997 (3) LARC INDUST. PARK III LARC INDUST. PARK III 23 1980 1997 (3) LARC INDUST. PARK IV LARC INDUST. PARK IV 16 1980 1997 (3) LARC INDUST. PARK V LARC INDUST. PARK V 16 1980 1997 (3) LARC INDUST. PARK VI LARC INDUST. PARK VI 62 1975 1997 (3) LARC INDUST. PARK VII LARC INDUST. PARK VII 45 1973 1997 (3) MEDICINE LAKE INDUST.CTR. MEDICINE LAKE INDUST. CTR. 191 1970 1997 (3) MEDICINE LAKE PROF.BLDG. MEDICINE LAKE PROF.BLDG. 13 1970 1997 (3) NORMAN CTR. I NORMAN CTR. I 53 1969 1998 (3) NORMAN CTR. II NORMAN CTR. II 67 1970 1998 (3) NORMAN CTR. III NORMAN CTR. III 22 1971 1998 (3) NORMAN CTR. IV NORMAN CTR. IV 48 1967 1998 (3) NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE 162 1960 1998 (3) N. PLAZA N. PLAZA 34 1966 1998 (3) N. STAR TITLE N. STAR TITLE 45 1965 1998 (3) OXFORD INDUST. OXFORD INDUST. 17 1971 1997 (3) PAKWA BUS. PARK I PAKWA BUS. PARK I 67 1979 1997 (3) PAKWA BUS. PARK II PAKWA BUS. PARK II 38 1979 1997 (3) PAKWA BUS. PARK III PAKWA BUS. PARK III 48 1979 1997 (3) PENN CORP. BLDG. PENN CORP. BLDG. 52 1977 1997 (3) 10801 RED CIRCLE DRIVE 10801 RED CIRCLE DR. 88 1977 1997 (3) SANDBURG INDUST. CTR. SANDBURG INDUST. CTR. 75 1973 1997 (3) SIBLEY INDUST. CTR. I SIBLEY INDUST. CTR. I 59 1973 1997 (3) SIBLEY INDUST. CTR. II SIBLEY INDUST. CTR. II 35 1972 1997 (3) SIBLEY INDUST. CTR. III SIBLEY INDUST. CTR. III 43 1967 1997 (3) SOUTH PLAZA SOUTH PLAZA 35 1966 1998 (3) JOHNSON BLDG. JOHNSON BLDG. 98 1974 1997 (3) TRAPP ROAD I TRAPP ROAD I 57 1996 1998 (3) TRAPP ROAD BLDG II TRAPP ROAD BLDG II 58 1998 1998 (3) TYROL WEST TYROL WEST 32 1968 1998 (3) WESTSIDE BUS. PARK WESTSIDE BUS. PARK 213 1987 1997 (3) YANKEE PLACE YANKEE PLACE 530 1986 1997 (3) 801 ZANE AVE N. 801 ZANE AVE N. 62 1978 1997 (3) CHILIES GRND.LSE. CHILIES GRND.LSE. - N/A 1998 (3) KNOX LND.LSE. KNOX LND.LSE. - N/A 1997 (3) OLIVE GARDEN GRND.LSE. OLIVE GARDEN GRND.LSE. - N/A 1998 (3) UNIVERSITY LND.LSE. UNIVERSITY LND.LSE. - N/A 1997 (3) ELIMINATIONS ELIMINATIONS - N/A N/A N/A ------- TOTALS 179,887 =======
- 66 - DUKE REALTY INVESTMENTS, INC. (IN THOUSANDS) (1) Costs capitalized subsequent to acquisition include decreases for purchase price reduction payments received and land sales or takedowns. (2) The Company owns a 75% interest in the partnership owning these buildings. The Company exercises significant control over the partnership, therefore, the buildings are consolidated by the Company with minority interest recognized on the remaining 25% ownership. (3) Depreciation of real estate is computed using the straight-line method over 40 years for buildings, 15 years for land improvements and shorter periods based on lease terms (generally 3 to 10 years) for tenant improvements.
Real Estate Accumulated Assets Depreciation ------------------------------- -------------------------- 1998 1997 1996 1998 1997 1996 ----- ----- ----- ----- ----- ----- Balance at beginning of year $1,823,218 $1,181,431 $ 804,164 $116,264 $82,207 $56,335 Acquisitions 324,043 525,751 213,979 - - - Construction costs and tenant improvements 251,899 156,745 173,186 - - - Depreciation expense - - - 61,414 39,768 27,569 Acquisition of minority interest 5,450 19,446 21,627 - - - -------- --------- --------- ------- ------- ------ 2,404,610 1,883,373 1,212,956 177,678 121,975 83,904 Deductions during year: Cost of real estate sold (1,329) (32,333) (11,347) (337) (4,224) (586) Contribution to Joint Venture - (27,873) (19,175) - (950) (108) Other 498 51 (1,003) 2,546 (537) (1,003) --------- --------- --------- ------- ------- ------- Balance at end of year $2,403,779 $1,823,218 $1,181,431 $179,887 $116,264 $82,207 ========= ========= ========= ======= ======= ======
- 67 - 3. EXHIBITS Certain exhibits required by Item 601 of Regulation S-K have been filed with previous reports by the Company and are herein incorporated by reference thereto. Number Description ------ ----------- 3.1 Amended and Restated Articles of Incorporation of Registrant are incorporated herein by reference to Exhibit 3.1 to the registration statement on Form S-3, as amended, filed on July 28, 1995, as File No. 33-61361 (the "1995 Registration Statement"). 3.2 Amendment dated August 16, 1996 to Articles of Incorporation of Registrant is incorporated herein by reference to Exhibit 3.2 to the Annual Report on Form 10-K for the year ended December 31, 1997. 3.3 Amendment dated June 12, 1997 to Articles of Incorporation of Registrant is incorporated herein by reference to Exhibit 3.3 to the Annual Report on Form 10-K for the year ended December 31, 1997. 3.4 Amendment dated July 11, 1997 to Articles of Incorporation of Registrant is incorporated herein by reference to Exhibit 3.4 to the Annual Report on Form 10-K for the year ended December 31, 1997. 3.5 Amendment dated May 27, 1998 to Articles of Incorporation of Registrant is incorporated herein by reference to Exhibit 3.2 to the Registration Statement of Form S-3, file number 333-57755. 3.6 Amendment dated July 23, 1998 to Articles of Incorporation of Registrant is incorporated herein by reference to Exhibit 10.0 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. 3.7 Amendment dated November 24, 1998 to Articles of Incorporation of Registrant is incorporated herein by reference to Exhibit 3.0 to the Form 8-K filed November 19, 1998. 3.8 Amendment dated January 20, 1999 to Articles of Incorporation of Registrant is incorporated herein by reference to Exhibit 3.0 to the Form 8-K filed January 19, 1999. 3.9 By-Laws of Registrant are incorporated herein by reference to Exhibit 3.2 to the 1995 Registration Statement. 3.10 Amendment dated October 23, 1997 to Bylaws of Registrant are incorporated herein by reference to Exhibit 3.6 to the Annual Report on Form 10-K for the year ended December 31, 1997. 3.11 Amendment dated July 23, 1998 to Bylaws of Registrant is incorporated herein by reference to Exhibit 7.3 to the Form 8-K filed July 31, 1998. 4.1 Instruments Defining Rights of Security Holders, including Indentures, are incorporated herein by reference to Articles V, VI, VIII, IX and X of Registrant's Articles of Incorporation. 10.1 Amended and Restated Agreement of Limited Partnership of Duke Realty Limited Partnership (the "Operating Partnership") is incorporated herein by reference to Exhibit 10.1 to the registration statement on Form S-2, as amended, filed on June 8, 1993, as File No. 33-64038 (the "1993 Registration Statement). 10.2 First and Second Amendments to Amended and Restated Agreement of Limited Partnership of the Operating Partnership are incorporated herein by reference to Exhibit 10.2 to the Annual Report on Form 10-K for the year ended December 31, 1995, and the Third Amendment to Amended and Restated Agreement of Limited Partnership of the Operating Partnership is incorporated herein by reference to Exhibit 10 to the Report of the Registrant on Form 8-K filed August 15, 1996. - 66 - 10.3 Fourth Amendment dated July 11, 1997 to Amended and Restated Agreement of Operating Partnership of the Registrant are incorporated herein by reference to Exhibit 10.3 to the Annual Report Form 10-K for the year ended December 31, 1997. 10.4 Fifth Amendment dated October 1, 1997 to Amended and Restated Agreement of Operating Partnership of the Registrant. 10.5 Sixth Amendment dated November 24, 1998, to Amended and Restated Agreement of Operating Partnership of the Registrant. 10.6 Seventh Agreement dated January 20, 1999, to Amended and Restated Agreement of Operating Partnership of the Registrant. 10.7 Eighth Amendment dated February 18, 1999, to Amended and Restated Agreement of Operating Partnership of the Registrant 10.8 Second Amended and Restated Agreement of Limited Partnership of Duke Realty Services Limited Partnership (the "Services Partnership") is incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K for the year ended December 31, 1995. 10.9 Promissory Note of the Services Partnership is incorporated herein by reference to Exhibit 10.3 to the 1993 Registration Statement. 10.10 Duke Realty Services Limited Partnership 1993 Stock Option Plan is incorporated herein by reference to Exhibit 10.4 to the 1993 Registration Statement. 10.11 Acquisition Option Agreement relating to certain properties not contributed to the Operating Partnership by Duke Associates (the "Excluded Properties") is incorporated herein by reference to Exhibit 10.5 to the 1993 Registration Statement. 10.12 Management Agreement relating to the Excluded Properties is incorporated herein by reference to Exhibit 10.6 to the 1993 Registration Statement. 10.13 Indemnification Agreement is incorporated herein by reference to Exhibit 10.11 to the 1993 Registration Statement. 10.14 1995 Key Employee Stock Option Plan is incorporated herein by reference to Exhibit 10.13 to the Annual Report on Form 10-K for the year ended December 31, 1995. 10.15 1995 Dividend Increase Unit Plan is incorporated herein by reference to Exhibit 10.14 to the Annual Report on Form 10-K for the year ended December 31, 1995. 10.16 1995 Shareholder Value Plan is incorporated herein by reference to Exhibit 10.15 to the Annual Report on Form 10-K for the year ended December 31, 1995. 10.17 1998 Shareholder Rights Agreement is incorporated herein by reference to Exhibit 7.1 to the Form 8-K dated July 31, 1998. 10.18 1998 Duke Realty Severance Pay Plan. 11.1 Statement of Computation of Earnings to Fixed Charges. 11.2 Statement of Computation of Earnings to Debt Service. 21. List of Subsidiaries of Registrant. - 69 - 23. Consent of KPMG LLP. 24. Executed powers of attorney of certain directors. 27. Financial Data Schedule (EDGAR filing only) 99.1 Selected Quarterly Financial Information The Company will furnish to any security holder, upon written request, copies of any exhibit incorporated by reference, for a fee of 15 cents per page, to cover the costs of furnishing the exhibits. Written request should include a representation that the person making the request was the beneficial owner of securities entitled to vote at the 1998 Annual Meeting of Shareholders. (B) REPORTS ON FORM 8-K The Company filed Form 8-K on October 21, 1998, to file exhibits in connection with the issuance of shares of common stock. The Company filed Form 8-K on November 13, 1998, to file exhibits in connection with the issuance of shares of common stock. The Company filed Form 8-K on November 19, 1998, to file exhibits in connection with the issuance of Preferred Series D Shares. The Company filed Form 8-K on November 25, 1998, to file exhibits in connection with the issuance of shares of common stock. - 70 - SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DUKE REALTY INVESTMENTS, INC. March 30, 1999 By: /s/ Thomas L. Hefner -------------------------------- Thomas L. Hefner Chairman of the Board, President and Chief Executive Officer By: /s/ Darell E. Zink, Jr. ------------------------------- Darell E. Zink, Jr. Executive Vice President and Chief Financial Officer (Principal Financial Officer) By: /s/ Dennis D. Oklak ------------------------------- Dennis D. Oklak Executive Vice President and Chief Administrative Officer (Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Date Title --------- ---- ----- /s/ Thomas L. Hefner * 3/30/99 Chairman of the Board, ----------------------- President and Chief Executive Thomas L. Hefner Officer and Director /s/ Darell E. Zink, Jr. * 3/30/99 Executive Vice President ----------------------- and Chief Financial Darell E. Zink, Jr. Officer and Director /s/ Dennis D. Oklak * 3/30/99 Executive Vice President and ----------------------- Chief Administrative Dennis D. Oklak - 71 - /s/ Geoffrey Button * 3/30/99 Director ----------------------- Geoffrey Button /s/ John D. Peterson * 3/30/99 Director ----------------------- John D. Peterson /s/ Ngaire E. Cuneo * 3/30/99 Director ----------------------- Ngaire E. Cuneo /s/ L. Ben Lytle * 3/30/99 Director ----------------------- L. Ben Lytle /s/ Jay J. Strauss * 3/30/99 Director ----------------------- Jay J. Strauss /s/ Howard L. Feinsand * 3/30/99 Director ----------------------- Howard L. Feinsand /s/ James E. Rogers * 3/30/99 Director ----------------------- James E. Rogers /s/ Daniel C. Staton* 3/30/99 Director ----------------------- Daniel C. Staton /s/ John W. Wynne * 3/30/99 Director ----------------------- John W. Wynne * By Dennis D. Oklak, Attorney-in-Fact /s/ -------------------- Dennis D. Oklak - 71 - EX-10.4 2 FIFTH AMENDMENT Exhibit 10.4 FIFTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF DUKE REALTY LIMITED PARTNERSHIP -------------------------------------------------------- THIS FIFTH AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this "Amendment") is made effective as of October 1, 1997 by and among DUKE REALTY INVESTMENTS, INC. (the "General Partner"), DMI Partnership ("DMI"), Thomas L. Hefner ("Hefner"), LINDBERGH-WARSON PROPERTIES, INC., a Missouri corporation ("LWP"), MARYVILLE LAND PARTNERSHIP, a Missouri general partnership ("MLP"), MARYVILLE CENTRE ASSOCIATES VI, a Missouri general partnership ("MCA VI"), MARYVILLE CENTRE ASSOCIATES VIII, a Missouri general partnership ("MCA VIII"), EDWARD T. BAUR, Trustee, BIRCH M. MULLINS, Trustee, and JAMES D. ECKHOFF (LWP, MLP, MCA VI, MCA VIII, Edward T. Baur, Birch M. Mullins, and James D. Eckhoff are collectively referred to as the "Baur Group"). All capitalized terms used but not defined in this Amendment shall have the meanings respectively assigned to them in the Partnership Agreement (as hereinafter defined). RECITALS: -------- A. The Partnership is governed by that certain Amended and Restated Agreement of Limited Partnership, dated as of October 4, 1993, as amended to date (the "Partnership Agreement"). B. Pursuant to that certain Contribution and Exchange Agreement by and among Lindbergh-Warson Properties, Inc., D/B/A Baur Properties, Duke Realty Limited Partnership, and Duke Realty Investments, Inc. and other parties, dated as of October 1, 1997, the Baur Group contributed to the capital of the Partnership certain assets, subject to certain liabilities, in exchange for ownership interests in the Partnership. C. The Baur Group wishes to be admitted as Additional Limited Partners of the Partnership. D. This Amendment is made pursuant to Section 9.05(a)(iii) and Section 9.05(b) of the Partnership Agreement. E. The General Partner, DMI and Hefner collectively own in excess of 90% of the outstanding Units. F. All of the parties desire to enter into this Amendment for the purpose of setting forth the admission of the Baur Group to the Partnership as Additional Limited Partners and certain amendments to the Partnership Agreement as hereinafter set forth. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows: 1. The Baur Group is hereby admitted as Additional Limited Partners of the Partnership. 2. The Partnership Agreement is hereby amended as follows: SECTION 1.04. DEFINITIONS. ---------------------------- Section 1.04 is hereby amended by inserting the following new definitions: "Baur Contribution and Exchange Agreement" means that certain Contribution and Exchange Agreement by and among Lindbergh-Warson Properties, Inc., D/B/A Baur Properties, Duke Realty Limited Partnership, and Duke Realty Investments, Inc. and other parties dated as of October 1, 1997. "Baur Group" means, collectively, Lindbergh- Warson Properties, Inc., Maryville Land Partnership, Maryville Center Associates VI, Maryville Center Associates VIII, Edward T. Baur, Trustee, Birch M. Mullins, Trustee and James D. Eckhoff. "Baur Units" means one or more Units issued by the Partnership as a class that: (1) are distributed to the Baur Group pursuant to section 2.1(c) of the Baur Contribution and Exchange Agreement; (2) are entitled to the distribution of certain refinancing proceeds pursuant to Section 4.15(b); and (3) after the distribution pursuant to Section 4.15(b), have all the same rights, powers, and privileges as Units. "Restructured Mortgage" means that certain refinancing mortgage in the principal amount of $20,000,000.00, which is subject to a certain liability assumption agreement executed by the Baur Group, a copy of which is attached as an exhibit to the Baur Contribution and Exchange Agreement. SECTION 2.03(A). CLASSIFICATION AND OWNERSHIP OF UNITS. ------------------------------------------------------- Section 2.03(a) is hereby amended by deleting the first sentence thereof and inserting the following in lieu thereof: The Units shall all be of a single class unless and until the Partnership issues Units of one or more additional classes pursuant to Article IV. ARTICLE IV. CAPITAL CONTRIBUTIONS, PROFITS AND LOSSES AND DISTRIBUTIONS. ----------------------------------------------------------------------- Article IV is hereby amended by revising Section 4.03 and adding Section 4.15 as follows: SECTION 4.03. DISTRIBUTABLE CASH. ---------------------------------- Section 4.03 is hereby amended by deleting the first sentence thereof and inserting the following in lieu thereof: Except as otherwise provided in this Article IV, distributions of Distributable Cash shall be made when declared by the General Partner in its sole discretion to the Partners who are Partners on the Partnership Record Date with respect to such Distribution in accordance with their respective Percentage Shares on such Partnership Record Date; provided that in no event may a Partner receive a Distribution of Distributable Cash with respect to a Unit if such Partner is entitled to receive a Distribution out of such Distributable Cash with respect to a REIT Share for which such Unit has been exchanged. SECTION 4.15. BAUR UNITS. -------------------------- (a) Pursuant to subsection (a) of Section 4.02, the Partnership hereby issues Baur Units in the aggregate amount of 1,925,337 to the Baur Group in exchange for the contribution to the capital of the Partnership pursuant to the Baur Contribution and Exchange Agreement of assets with an Agreed Value in the aggregate of $60,817,142.20. Immediately following the capital contributions described in this subsection and the distributions pursuant to subsection (b) of this Section, the Capital Accounts and the number of Baur Units owned by each member of the Baur Group is as follows:
Capital Baur Accounts Units -------- ------ Lindbergh-Warson Properties, Inc.: $ 6,424,625.74 303,048 Maryville Land Partnership: 26,523,604.91 1,251,114 Maryville Center Associates VI: 4,340,250.23 204,729 Maryville Center Associates VIII: 1,858,341.54 87,658 Edward T. Baur: 815,245.35 38,455 Birch M. Mullins: 779,383.24 36,763 James D. Eckhoff: 75,691.40 3,570 ------------ --------- TOTAL $40,817,142.41 1,925,337
(b) Notwithstanding Section 4.03 or any other provision of this Agreement, immediately after the effective time of the admission of the Baur Group as Partners, each holder of Baur Units shall be distributed an amount of cash equal to $10.38779 for each Baur Unit held, for an aggregate Distribution of $20,000,000.00, in accordance with the schedule attached hereto ("Schedule A"). Pursuant to Notice 89-35, 1989-1 C.B. 675, for purposes of applying the interest tracing rules of Treasury Regulations Section 1.163-8T, the Partnership shall treat the amount distributed to each member of the Baur Group as being made from the proceeds of the Restructured Mortgage. Interest expense on such proceeds shall be allocated in accordance with the general allocation rules of V.A of Notice 89- 35. Notwithstanding any other provision of this Agreement, the General Partner shall not be liable for, nor be required to restore or make a capital contribution on account of, any deficit Capital Account balance to the extent that the proceeds of any such restoration or capital contribution would be used to pay the Restructured Mortgage. Furthermore, in the event that the General Partner becomes liable for and is required to pay, directly or indirectly, all or any portion of the Restructured Mortgage from its separate assets, each member of the Baur Group shall upon demand pay to the General Partner an amount of cash in immediately available funds equal to the amount paid by the General Partner on account of the Restructured Mortgage multiplied by a fraction, the numerator of which is the number of Baur Units issued to such member of the Baur Group pursuant to Section 4.15(a) hereof and the denominator of which is the number of Baur Units issued to all members of the Baur Group pursuant to Section 4.15(a) hereof. 3. This Amendment may be executed in any number of counterparts with the same effect as if all of the parties had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 4. Except as amended hereby, the Partnership Agreement shall continue in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written. DUKE REALTY INVESTMENTS, INC., General Partner, Date: By: /s/ ----------------- ----------------------- Thomas L. Hefner Chief Executive Officer Date: /s/ ---------------- ------------------------ THOMAS L. HEFNER Date: DMI PARTNERSHIP ----------------- By: Duke Management, Inc., General Partner By: ------------------------------- Thomas L. Hefner, President Date: ----------------- ------------------------------- EDWARD T. BAUR, TRUSTEE Date: ----------------- ------------------------------- BIRCH M. MULLINS, TRUSTEE Date: ----------------- ------------------------------- JAMES D. ECKHOFF LINDBERGH-WARSON PROPERTIES, INC. Date: By: ------------------ ------------------------------- Attest: Edward T. Baur, Chairman ---------------- James D. Eckhoff Secretary MARYVILLE LAND PARTNERSHIP By: Lindbergh-Warson Properties, Inc., its General Partner Date: By: ------------------ ------------------------- Attest: Edward T. Baur, Chairman ------------------ James D. Eckhoff Secretary MARYVILLE CENTRE ASSOCIATES VI By: Maryville Land Partnership, its General Partner By: Lindbergh-Warson Properties, Inc., its General Partner Date: By: ------------------ ------------------------- Attest: Edward T. Baur, Chairman ------------------ James D. Eckhoff Secretary MARYVILLE CENTRE ASSOCIATES VIII By: Maryville Land Partnership, its General Partner By: Lindbergh-Warson Properties, Inc., its General Partner Date: By: ------------------ ------------------------- Attest: Edward T. Baur, Chairman ------------------ James D. Eckhoff Secretary SCHEDULE A ----------- DISTRIBUTION OF REFINANCING PROCEEDS TO BAUR GROUP PURSUANT TO SECTION 4.03(b) OF THE PARTNERSHIP AGREEMENT ----------------------------------------
DISTRIBUTION OF BAUR GROUP REFINANCING PROCEEDS - ----------- --------------------- EDWARD T. BAUR 399,462.24 BIRCH M. MULLINS 381,890.15 JAMES D. ECKHOFF 37,088.05 MARYVILLE LAND PARTNERSHIP 12,996,306.62 LINDBERGH-WARSON PROPERTIES, INC. 3,148,003.69 MARYVILLE CENTRE ASSOCIATES VI 2,126,680.10 MARYVILLE CENTRE ASSOCIATES VIII 910,569.15 ------------- TOTAL $ 20,000,000.00 =============
EX-10.5 3 SIXTH AMENDMENT Exhibit 10.5 SIXTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF DUKE REALTY LIMITED PARTNERSHIP The undersigned, as the General Partner of Duke Realty Limited Partnership (the "Partnership"), hereby amends the Partnership's Amended and Restated Agreement of Limited Partnership, as heretofore amended (the "Partnership Agreement"), pursuant to Sections 4.02(b) and 9.05(a)(v) of the Partnership Agreement, to add a new Section 4.16 to read as provided in Exhibit A hereto. In all other respects, the Partnership Agreement shall continue in full force and effect as amended hereby. Any capitalized terms used in this Amendment and not defined herein have the meanings given to them in the Partnership Agreement. Effective as of 12:01 a.m., November 24, 1998. DUKE REALTY INVESTMENTS, INC., as General Partner By: ------------------- Dennis D. Oklak Vice President and Treasurer EXHIBIT A Section 4.16. Series D Preferred Units. Pursuant to authority granted under Section 4.02(b) of this Agreement, the General Partner hereby establishes a series of preferred Units designated the 7.375% Series D Convertible Cumulative Redeemable Preferred Units (Liquidation Preference $250.00 Per Unit) (the "Series D Preferred Units") on the following terms: (a) Number. The number of authorized units of the Series D Preferred Units shall be 540,000 and shall at all times be equal to the number of 7.375% Series D Cumulative Convertible Redeemable Preferred Shares ("Series D Preferred Shares") issued by the General Partner and then outstanding. Series D Preferred Units shall be issued only to and held only by the General Partner. (b) Relative Seniority. In respect of rights to receive dividends and to participate in distributions or payments in the event of any liquidation, dissolution or winding up of the Partnership, the Series D Preferred Units shall rank senior to the Units initially established under Section 2.03 and issued under Sections 4.01 and 4.02(a) ("Common Units") and any other class or series of Units of the Partnership ranking, as to Distributions and upon liquidation, junior to the Series D Preferred Units (collectively, "Junior Units") and on a parity with the Series A Preferred Units and the Series B Preferred Units. In the event of Distributions from a Terminating Capital Transaction pursuant to Section 4.04, Distributions to the holder of Series D Preferred Units will be made prior to Distributions to holders of Junior Units or to other Partners in accordance with Capital Account positive balances pursuant to Section 4.04(d). (c) Distributions. (1) The General Partner, as holder of the then outstanding Series D Preferred Units, shall be entitled to receive, when and as declared by the General Partner out of any funds legally available therefor, cumulative Distributions at an initial rate of 7.375% per Unit per year, payable in equal amounts of $4.609375 per Unit quarterly in cash on the last day of each March, June, September and December or, if not a Business Day (as hereinafter defined), the next succeeding Business Day beginning on December 31, 1998 (each such day being hereinafter called a "Quarterly Distribution Date" and each period ending on a Quarterly Distribution Date being hereinafter called a "Distribution Period"). Distributions shall be payable to the General Partner as holder of the Series D Preferred Units at the close of business on the applicable record date (the "Record Date"), which shall be on such date designated by the Partnership for the payment of Distributions that is not more than 30 nor less than 10 days prior to such Quarterly Distribution Date. The amount of any distribution payable for any Distribution Period shorter than a full Distribution Period shall be prorated and computed on the basis of a 360-day year of twelve 30-day months. Distributions on each Series D Preferred Unit shall accrue and be cumulative from and including the date of original issue thereof, whether or not (i) Distributions on such units are earned and declared, (ii) the Partnership has earnings, or (iii) on any Quarterly Distribution Date there shall be funds legally available for the payment of Distributions. Distributions paid on the Series D Preferred Units in an amount less than the total amount of such Distributions at the time accrued and payable on such units shall be allocated pro rata on a per Unit basis among all such Series D Preferred Units at the time outstanding. Except as provided in subparagraph (e)(2)(v) and the last sentence of this paragraph, unless the full cumulative Distributions on the Series D Preferred Units 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 Distribution periods and the then current Distribution period, no Distributions (other than Distributions payable solely in Common Units or other units of Partnership interest ranking junior to the Series D Preferred Units as to Distributions and upon liquidation) shall be declared or paid or set aside for payment or other distribution made upon the Common Units or any other units of Partnership interest ranking junior to or on a parity with the Series D Preferred Units as to Distributions or upon liquidation, nor shall any Common Units, or any other units of Partnership interest ranking junior to or on a parity with the Series D Preferred Units as to Distributions 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 such units) by the Partnership or any subsidiary of the Partnership (except for conversion into or exchange for such capital units of the Partnership ranking junior to the Series D Preferred Units as to Distributions and upon liquidation). If accrued Distributions on the Series D Preferred Units for all prior Distribution periods have not been paid in full, then any Distribution declared on the Series D Preferred Units for any Distribution period and on any series of preferred units at the time outstanding ranking on a parity as to the Distributions with the Series D Preferred Units will be declared ratably in proportion to accrued and unpaid Distributions on the Series D Preferred Units and such series of preferred units at the time outstanding ranking on a parity as to Distributions with the Series D Preferred Units. "Business Day" shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close. (2) The amount of any Distributions accrued on any Series D Preferred Units at any Quarterly Distribution Date shall be the amount of any unpaid Distributions accumulated thereon, to and including such Quarterly Distribution Date, whether or not earned or declared, and the amount of Distributions accrued on any units of Series D Preferred Units at any date other than a Quarterly Distribution Date shall be equal to the sum of the amount of any unpaid Distributions accumulated thereon, to and including the last preceding Quarterly Distribution Date, whether or not earned or declared, plus an amount calculated on the basis of the annual Distribution rate of 7.375% per unit, for the period after such last preceding Quarterly Distribution Date to and including the date as of which the calculation is made based on a 360-day year of twelve 30-day months. (3) Except as provided in this Section 4.16, the Series D Preferred Units shall not be entitled to participate in the earnings or assets of the Partnership. (4) Any Distribution payment made on the Series D Preferred Units shall be first credited against the earliest accrued but unpaid Distribution due with respect to such units which remains payable. (5) If, for any taxable year, the Partnership elects to designate as "capital gain Distributions" (as defined in Section 857 of the Code), any portion (the "Capital Gains Amount") of the Distributions paid or made available for the year to holders of all classes of Units (the "Total Distributions"), then the portion of the Capital Gains Amount that shall be allocated to the holders of the Series D Preferred Units shall be the amount that the total Distributions paid or made available to the holders of the Series D Preferred Units for the year bears to the Total Distributions. (6) No Distributions on the Series D Preferred Units shall be authorized by the General Partner or be paid or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the Partnership, including any agreement relating to its indebtedness, prohibit such authorization, payment or setting apart for payment or provide that such authorization, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such authorization or payment shall be restricted or prohibited by law. Notwithstanding the foregoing, Distributions on the Series D Preferred Units will accrue whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such Distributions and whether or not such Distributions are authorized. (d) Liquidation Rights. (1) Upon the voluntary or involuntary dissolution, liquidation or winding up of the Partnership, the holders of the Series D Preferred Units then outstanding shall be entitled to receive and to be paid out of the assets of the Partnership available for distribution to the Partners, before any payment or distribution shall be made on any Junior Units, the amount of $250.00 per unit, plus accrued and unpaid Distributions thereon. (2) After the payment to the holders of the Series D Preferred Units of the full preferential amounts provided for in this Section 4.16, the holders of the Series D Preferred Units, as such, shall have no right or claim to any of the remaining assets of the Partnership. (3) If, upon any voluntary or involuntary dissolution, liquidation, or winding up of the Partnership, the amounts payable with respect to the preference value of the Series D Preferred Units and any other units of the Partnership ranking as to any such distribution on a parity with the Series D Preferred Units are not paid in full, the holders of the Series D Preferred Units and of such other units will share ratably in any such distribution of assets of the Partnership in proportion to the full respective preference amounts to which they are entitled. (4) Neither the sale, lease, transfer or conveyance of all or substantially all of the property or business of the Partnership, nor the merger or consolidation of the Partnership into or with any other entity or the merger or consolidation of any other entity into or with the Partnership, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 4.16. (e) Redemption by the Partnership. (1) Optional Redemption. The General Partner shall cause the Partnership to redeem one Series D Preferred Unit for each Series D Preferred Share redeemed by the General Partner, at a price per Series D Preferred Unit (the "Series D Redemption Price"), payable in cash, of $250.00, together with all accrued and unpaid Distributions to and including the date fixed for redemption (the "Series D Redemption Date"). The Series D Preferred Units have no stated maturity and will not be subject to any sinking fund or mandatory redemption provisions except as provided in subparagraph (e)(3) below. (2) Procedures of Redemption. (i) The General Partner shall provide the Partnership with a copy of any notice of redemption given by the General Partner pursuant to Section 6.08(e)(2)(i) of its Articles of Incorporation, as amended. No failure to give such notice or any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series D Preferred Units. (ii) If notice has been mailed by the General Partner in accordance with Section 6.08(e)(2)(i) of its Articles of Incorporation, as amended, and provided that on or before the Series D Redemption Date specified in such notice all funds necessary for such redemption shall have been irrevocably set aside by the Partnership, separate and apart from its other funds in trust for the pro rata benefit of the holders of the Series D Preferred Units so called for redemption, so as to be, and to continue to be available therefor, then, from and after the Series D Redemption Date, Distributions on the Series D Preferred Units so called for redemption shall cease to accumulate, and said units shall no longer be deemed to be outstanding and shall not have the status of Series D Preferred Units and all rights of the General Partner as holder thereof (except the right to receive the Series D Redemption Price) shall cease. Upon surrender, in accordance with such notice, of the certificates for any Series D Preferred Units so redeemed (properly endorsed or assigned for transfer, if the Partnership shall so require and the notice shall so state), such Series D Preferred Units shall be redeemed by the Partnership at the Series D Redemption Price. In case fewer than all the Series D Preferred Units represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed Series D Preferred Units without cost to the holder thereof. (iii) Any funds deposited with a bank or trust company for the purpose of redeeming Series D Preferred Units shall be irrevocable except that: (A) the Partnership or the General Partner, as the case may be, shall be entitled to receive from such bank or trust company the interest or other earnings, if any, earned on any money so deposited in trust; and (B) any balance of monies so deposited and unclaimed by the General Partner, as holder of the Series D Preferred Units entitled thereto at the expiration of two years from the applicable Series D Redemption Date shall be repaid, together with any interest or other earnings earned thereon, to the Partnership, and after any such repayment, the General Partner as holder of the units entitled to the funds so repaid to the Partnership shall look only to the Partnership for payment without interest or other earnings. (iv) No Series D Preferred Units may be redeemed except from proceeds from the sale or other issuance of other equity interests of the Partnership. (v) Unless full accumulated distributions on all Series D Preferred Units 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 Distribution Periods and the then current Distribution Period, no Series D Preferred Units shall be redeemed or purchased or otherwise acquired directly or indirectly by the Partnership or any subsidiary of the Partnership (except by conversion into or exchange for Junior Units) and no preferred units of the Partnership shall be redeemed unless all outstanding Series D Preferred Units are simultaneously redeemed; provided, however, that the foregoing shall not prevent the redemption of Series D Preferred Units to preserve the REIT status of the General Partner or the purchase or acquisition of Series D Preferred Units pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series D Preferred Units. Notwithstanding the foregoing, in the case of a Redemption Request (as defined below) which has not been fulfilled at the time the General Partner gives notice of its election to redeem all or any Series D Preferred Shares, the Series D Preferred Units which are the subject of such pending Redemption Request shall be redeemed prior to any other Series D Preferred Units. (3) Optional Redemption Upon the Death of a Holder of Series D Preferred Shares. (i) Commencing on December 31, 1998, and on the last day of each March, June, September and December thereafter (each, a "Holder Redemption Date"), the Partnership will, upon notice from the General Partner that it is required to redeem Series D Preferred Shares as a result of the death of any holder of the Series D Preferred Shares or depositary shares representing Series D Preferred Shares, the Partnership will redeem a number of Series D Preferred Units equal to the number of Series D Preferred Shares redeemed by the General Partner for cash or Common Units, at the option of the General Partner. The Partnership shall redeem the Series D Preferred Units subject to the limitations that the Partnership will not be obligated to redeem (A) more than16,200 Series D Preferred Units in any one year; and (B) more than 100 Series D Preferred Units per deceased owner of depositary shares per year (each a "Redemption Limitation" and together the "Redemption Limitations"). (ii) A Redemption Request which exceeds one or both Redemption Limits will be held for redemption in subsequent years until redeemed in full. A Redemption Request will be applied in the order of receipt by the transfer agent to successive years, regardless of the number of years required to redeem such units. (iii) At the General Partner's option, the Series D Preferred Units may be redeemed for either cash or Common Units. If such units are redeemed by the Partnership for cash, the redemption price of such units is $250.00 per Series D Preferred Unit (plus all accrued and unpaid Distributions). If, however, such units are redeemed by the Partnership for Common Units, the redemption price will be $252.50 per Series D Preferred Unit and the number of Common Units received will be based on the closing price of the General Partners common stock on the day prior to the Holder Redemption Date (plus all accrued and unpaid Distributions, which shall be paid in cash). No fractional Common Units will be issued. In lieu of any fractional units, the Partnership will pay cash in an amount equal to the product of such fraction multiplied by the closing price of one share of the General Partner's common stock on the day prior to the Holder Redemption Date. (f) Voting Rights. Except as required by law, and as set forth below, the holders of the Series D Preferred Units shall not be entitled to vote at any meeting for any purpose or otherwise to participate in any action taken by the Partnership or the Partners, or to receive notice of any meeting of Partners. (1) So long as any Series D Preferred Units remain outstanding, the Partnership will not, without the affirmative vote or consent of the holders of at least two- thirds of the Series D Preferred Units 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 units ranking prior to the Series D Preferred Units with respect to the payment of Distributions or the distribution of assets upon liquidation, dissolution or winding up or reclassify any authorized units of the Partnership into such units, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership's Amended and Restated Agreement of Limited Partnership, as amended, whether by merger, consolidation or otherwise (an "Event"), so as to materially and adversely affect any right, preference, privilege or voting power of the Series D Preferred Units 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 Series D Preferred Units remain outstanding with the terms thereof materially unchanged, taking into account that upon the occurrence of an Event, the Partnership 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 Series D Preferred Units and provided further that (x) any increase in the amount of the authorized preferred units or the creation or issuance of any other series of preferred units, or (y) any increase in the amount of authorized Series D Preferred Units or any other preferred units, in each case ranking on a parity with or junior to the Series D Preferred Units with respect to payment of Distributions 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 Series D Preferred Units shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption. (2) On each matter submitted to a vote of the holders of Series D Preferred Units in accordance with this Section 4.16, or as otherwise required by law, each Series D Preferred Unit shall be entitled to ten (10) votes, each of which ten (10) votes may be directed separately by the holder thereof. (g) Conversion. The General Partner, as holder of the Series D Preferred Units, shall have the right to convert all or a portion of such Series D Preferred Units Common Units, as follows: (1) Upon notice to the Partnership by the General Partner that a holder of depositary shares representing Series D Preferred Shares has elected to convert such depositary shares into common stock of the General Partner, the General Partner shall have the right to convert a number of Series D Preferred Units equal to the number of Series D Preferred Shares so converted into fully paid and non-assessable Common Units by surrendering such Series D Preferred Units to be converted, such surrender to be made in the manner provided in subsection (g)(2); provided, however, that the right to convert units called for redemption pursuant to subsection (e)(1) shall terminate at the close of business on the Redemption Date fixed for such redemption, unless the Partnership shall default in making payment of the Common Units and any cash payable upon such redemption under subsection (e)(1) hereof. (2) (i) In order to exercise the conversion right, the General Partner shall surrender the certificate representing such Series D Preferred Unit, if certificated, duly endorsed or assigned to the Partnership or in blank, to the Partnership. (ii) The General Partner as holder of the Series D Preferred Units at the close of business on a distribution payment record date shall be entitled to receive the distribution payable on such units on the corresponding Distribution Payment Date notwithstanding the conversion thereof following such distribution payment record date and prior to such Distribution Payment Date. However, Series D Preferred Units surrendered for conversion during the period between the close of business on any distribution payment record date and the opening of business on the corresponding Distribution Payment Date (except units converted after the issuance of notice of redemption with respect to a redemption date during such period or coinciding with such Distribution Payment Date, such Series D Preferred Units being entitled to such distribution on the Distribution Payment Date) must be accompanied by payment of an amount equal to the distribution payable on such Series D Preferred Units on such Distribution Payment Date. The General Partner as holder of Series D Preferred Units on a distribution payment record date which are tendered for conversion into Common Units on such Distribution Payment Date will receive the distribution payable by the Partnership on such Series D Preferred Units on such date, and the General Partner as converting holder need not include payment of the amount of such distribution upon surrender of Series D Preferred Units for conversion. Except as provided above, the Partnership shall make no payment or allowance for unpaid distributions, whether or not in arrears, on converted Series D Preferred Units or for distributions on the Common Units issued upon such conversion. (iii) As promptly as practicable after the surrender of Series D Preferred Units as aforesaid, the Partnership shall issue and shall deliver to the General Partner a certificate or certificates for the number of full Common Units issuable upon the conversion of such Series D Preferred Units in accordance with the provisions of this subparagraph (g), and any fractional interest in respect of a Common Unit arising upon such conversion shall be settled as provided in subsection (g)(3). (iv) Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the Series D Preferred Units shall have been surrendered and such notice (and if applicable, payment of an amount equal to the distribution payable on such units) received by the Partnership as aforesaid, and the General Partner shall be deemed to have become the holder of record of the Common Units represented thereby at such time on such date, unless the unit transfer books of the Partnership shall be closed on that date, in which event the General Partner shall be deemed to have become such holder of record at the close of business on the next succeeding day on which such unit transfer books are open. (3) No fractional units of scrip representing fractions of Common Units shall be issued upon conversion of the Series D Preferred Units. Instead of any fractional interest in a Common Unit that would otherwise be deliverable upon the conversion of Series D Preferred Unit, the Partnership shall pay to the General Partner as holder of such unit an amount in cash based upon the Current Market Price (as defined in Section 6.08(g)(3) of the General Partner's Articles of Incorporation, as amended) of the General Partner's common stock on the Trading Day (as defined in Section 6.08(g)(3) of the General Partner's Articles of Incorporation, as amended) immediately preceding the date of conversion. If more than one Series D Preferred Unit shall be surrendered for conversion at one time, the number of full Common Units issuable upon conversion thereof shall be as specified by the General Partner. (4) The number of Series D Preferred Units shall be increased or decreased by split, combination or otherwise in the same manner as the Series D Preferred Shares so that the number of authorized Series D Preferred Units will at all times be equal to the number of authorized Series D Preferred Shares and number of outstanding Series D Preferred Units will at all times be equal to the number of outstanding Series D Preferred Shares. EX-10.6 4 SEVENTH AMENDMENT Exhibit 10.6 SEVENTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF DUKE REALTY LIMITED PARTNERSHIP The undersigned, as the General Partner of Duke Realty Limited Partnership (the "Partnership"), hereby amends the Partnership's Amended and Restated Agreement of Limited Partnership, as heretofore amended (the "Partnership Agreement"), pursuant to Sections 4.02(b) and 9.05(a)(v) of the Partnership Agreement, to add a new Section 4.17 to read as provided in Exhibit A hereto. In all other respects, the Partnership Agreement shall continue in full force and effect as amended hereby. Any capitalized terms used in this Amendment and not defined herein have the meanings given to them in the Partnership Agreement. Effective as of 12:01 a.m., January 20, 1999. DUKE REALTY INVESTMENTS, INC., as General Partner By: ------------------------ Dennis D. Oklak Executive Vice President, Chief Administrative Officer and Treasurer EXHIBIT A Section 4.17. Series E Preferred Units. Pursuant to authority granted under Section 4.02(b) of this Agreement, the General Partner hereby establishes a series of preferred Units designated the 8.25% Series E Cumulative Redeemable Preferred Units (Liquidation Preference $250.00 Per Unit) (the "Series E Preferred Units") on the following terms: (a) Number. The number of authorized units of the Series E Preferred Units shall be 460,000 and shall at all times be equal to the number of 8.25% Series E Cumulative Redeemable Preferred Shares ("Series E Preferred Shares") issued by the General Partner and then outstanding. Series E Preferred Units shall be issued only to and held only by the General Partner. (b) Relative Seniority. In respect of rights to receive dividends and to participate in distributions or payments in the event of any liquidation, dissolution or winding up of the Partnership, the Series E Preferred Units shall rank senior to the Units initially established under Section 2.03 and issued under Sections 4.01 and 4.02(a) ("Common Units") and any other class or series of Units of the Partnership ranking, as to Distributions and upon liquidation, junior to the Series E Preferred Units (collectively, "Junior Units") and on a parity with the Series A Preferred Units and the Series B Preferred Units. In the event of Distributions from a Terminating Capital Transaction pursuant to Section 4.04, Distributions to the holder of Series E Preferred Units will be made prior to Distributions to holders of Junior Units or to other Partners in accordance with Capital Account positive balances pursuant to Section 4.04(d). (c) Distributions. (1) The General Partner, as holder of the then outstanding Series E Preferred Units, shall be entitled to receive, when and as declared by the General Partner out of any funds legally available therefor, cumulative Distributions at an initial rate of 8.25% per Unit per year, payable in equal amounts of $5.15625 per Unit quarterly in cash on the last day of each March, June, September and December or, if not a Business Day (as hereinafter defined), the next succeeding Business Day beginning on March 31, 1999 (each such day being hereinafter called a "Quarterly Distribution Date" and each period ending on a Quarterly Distribution Date being hereinafter called a "Distribution Period"). Distributions shall be payable to the General Partner as holder of the Series E Preferred Units at the close of business on the applicable record date (the "Record Date"), which shall be on such date designated by the Partnership for the payment of Distributions that is not more than 30 nor less than 10 days prior to such Quarterly Distribution Date. The amount of any distribution payable for any Distribution Period shorter than a full Distribution Period (including the first Dividend Period) shall be prorated and computed on the basis of a 360-day year of twelve 30-day months. Distributions on each Series E Preferred Unit shall accrue and be cumulative from and including the date of original issue thereof, whether or not (i) Distributions on such units are earned and declared, (ii) the Partnership has earnings, or (iii) on any Quarterly Distribution Date there shall be funds legally available for the payment of Distributions. Distributions paid on the Series E Preferred Units in an amount less than the total amount of such Distributions at the time accrued and payable on such units shall be allocated pro rata on a per Unit basis among all such Series E Preferred Units at the time outstanding. Except as provided in subparagraph (e)(2)(v) and the last sentence of this paragraph, unless the full cumulative Distributions on the Series E Preferred Units 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 Distribution Periods and the then current Distribution Period, no Distributions (other than Distributions payable solely in Common Units or other units of Partnership interest ranking junior to the Series E Preferred Units as to Distributions and upon liquidation) shall be declared or paid or set aside for payment or other Distribution made upon the Common Units or any other units of Partnership interest ranking junior to or on a parity with the Series E Preferred Units as to Distributions or upon liquidation, nor shall any Common Units, or any other units of Partnership interest ranking junior to or on a parity with the Series E Preferred Units as to Distributions 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 such units) by the Partnership or any subsidiary of the Partnership (except for conversion into or exchange for such capital units of the Partnership ranking junior to the Series E Preferred Units as to Distributions and upon liquidation). If accrued Distributions on the Series E Preferred Units for all prior Distribution Periods have not been paid in full, then any Distribution declared on the Series E Preferred Units for any Distribution Period and on any series of preferred units at the time outstanding ranking on a parity as to the Distributions with the Series E Preferred Units will be declared ratably in proportion to accrued and unpaid Distributions on the Series E Preferred Units and such series of preferred units at the time outstanding ranking on a parity as to Distributions with the Series E Preferred Units. "Business Day" shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close. (2) The amount of any Distributions accrued on any Series E Preferred Units at any Quarterly Distribution Date shall be the amount of any unpaid Distributions accumulated thereon, to and including such Quarterly Distribution Date, whether or not earned or declared, and the amount of Distributions accrued on any units of Series E Preferred Units at any date other than a Quarterly Distribution Date shall be equal to the sum of the amount of any unpaid Distributions accumulated thereon, to and including the last preceding Quarterly Distribution Date, whether or not earned or declared, plus an amount calculated on the basis of the annual Distribution rate of 8.25% per unit, for the period after such last preceding Quarterly Distribution Date to and including the date as of which the calculation is made based on a 360-day year of twelve 30-day months. (3) Except as provided in this Section 4.17, the Series E Preferred Units shall not be entitled to participate in the earnings or assets of the Partnership. (4) Any Distribution payment made on the Series E Preferred Units shall be first credited against the earliest accrued but unpaid Distribution due with respect to such units which remains payable. (5) If, for any taxable year, the Partnership elects to designate as "capital gain Distributions" (as defined in Section 857 of the Code), any portion (the "Capital Gains Amount") of the Distributions paid or made available for the year to holders of all classes of Units (the "Total Distributions"), then the portion of the Capital Gains Amount that shall be allocated to the holders of the Series E Preferred Units shall be the amount that the total Distributions paid or made available to the holders of the Series E Preferred Units for the year bears to the Total Distributions. (6) No Distributions on the Series E Preferred Units shall be authorized by the General Partner or be paid or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the Partnership, including any agreement relating to its indebtedness, prohibit such authorization, payment or setting apart for payment or provide that such authorization, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such authorization or payment shall be restricted or prohibited by law. Notwithstanding the foregoing, Distributions on the Series E Preferred Units will accrue whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such Distributions and whether or not such Distributions are authorized. (d) Liquidation Rights. (1) Upon the voluntary or involuntary dissolution, liquidation or winding up of the Partnership, the holders of the Series E Preferred Units then outstanding shall be entitled to receive and to be paid out of the assets of the Partnership available for distribution to the Partners, before any payment or distribution shall be made on any Junior Units, the amount of $250.00 per Series E Preferred Unit, plus accrued and unpaid Distributions thereon. (2) After the payment to the holders of the Series E Preferred Units of the full preferential amounts provided for in this Section 4.17, the holders of the Series E Preferred Units, as such, shall have no right or claim to any of the remaining assets of the Partnership. (3) If, upon any voluntary or involuntary dissolution, liquidation, or winding up of the Partnership, the amounts payable with respect to the preference value of the Series E Preferred Units and any other units of the Partnership ranking as to any such distribution on a parity with the Series E Preferred Units are not paid in full, the holders of the Series E Preferred Units and of such other units will share ratably in any such distribution of assets of the Partnership in proportion to the full respective preference amounts to which they are entitled. (4) Neither the sale, lease, transfer or conveyance of all or substantially all of the property or business of the Partnership, nor the merger or consolidation of the Partnership into or with any other entity or the merger or consolidation of any other entity into or with the Partnership, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 4.17. (e) Redemption by the Partnership. (1) Optional Redemption. The General Partner shall cause the Partnership to redeem one Series E Preferred Unit for each Series E Preferred Share redeemed by the General Partner, at a price per Series E Preferred Unit (the "Series E Redemption Price"), payable in cash, of $250.00, together with all accrued and unpaid Distributions to and including the date fixed for redemption (the "Series E Redemption Date"). The Series E Preferred Units have no stated maturity and will not be subject to any sinking fund or mandatory redemption provisions. (2) Procedures of Redemption. (i) The General Partner shall provide the Partnership with a copy of any notice of redemption given by the General Partner pursuant to Section 6.09(e)(2)(i) of its Articles of Incorporation, as amended. No failure to give such notice or any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series E Preferred Units. (ii) If notice has been mailed by the General Partner in accordance with Section 6.09(e)(2)(i) of its Articles of Incorporation, as amended, and provided that on or before the Series E Redemption Date specified in such notice all funds necessary for such redemption shall have been irrevocably set aside by the Partnership, separate and apart from its other funds in trust for the pro rata benefit of the holders of the Series E Preferred Units so called for redemption, so as to be, and to continue to be available therefor, then, from and after the Series E Redemption Date, Distributions on the Series E Preferred Units so called for redemption shall cease to accumulate, and said units shall no longer be deemed to be outstanding and shall not have the status of Series E Preferred Units and all rights of the General Partner as holder thereof (except the right to receive the Series E Redemption Price) shall cease. Upon surrender, in accordance with such notice, of the certificates for any Series E Preferred Units so redeemed (properly endorsed or assigned for transfer, if the Partnership shall so require and the notice shall so state), such Series E Preferred Units shall be redeemed by the Partnership at the Series E Redemption Price. In case fewer than all the Series E Preferred Units represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed Series E Preferred Units without cost to the holder thereof. (iii) Any funds deposited with a bank or trust company for the purpose of redeeming Series E Preferred Units shall be irrevocable except that: (A) the Partnership or the General Partner, as the case may be, shall be entitled to receive from such bank or trust company the interest or other earnings, if any, earned on any money so deposited in trust; and (B) any balance of monies so deposited and unclaimed by the General Partner, as holder of the Series E Preferred Units entitled thereto at the expiration of two years from the applicable Series E Redemption Date shall be repaid, together with any interest or other earnings earned thereon, to the Partnership, and after any such repayment, the General Partner as holder of the units entitled to the funds so repaid to the Partnership shall look only to the Partnership for payment without interest or other earnings. (iv) No Series E Preferred Units may be redeemed except from proceeds from the sale or other issuance of other equity interests of the Partnership. (v) Unless full accumulated distributions on all Series E Preferred Units 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 Distribution Periods and the then current Distribution Period, no Series E Preferred Units shall be redeemed or purchased or otherwise acquired directly or indirectly by the Partnership or any subsidiary of the Partnership (except by conversion into or exchange for Junior Units) and no preferred units of the Partnership shall be redeemed unless all outstanding Series E Preferred Units are simultaneously redeemed; provided, however, that the foregoing shall not prevent the redemption of Series E Preferred Units to preserve the REIT status of the General Partner or the purchase or acquisition of Series E Preferred Units pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series E Preferred Units. Notwithstanding the foregoing, in the case of a Redemption Request (as defined below) which has not been fulfilled at the time the General Partner gives notice of its election to redeem all or any Series E Preferred Shares, the Series E Preferred Units which are the subject of such pending Redemption Request shall be redeemed prior to any other Series E Preferred Units. (f) Voting Rights. Except as required by law, and as set forth below, the holders of the Series E Preferred Units shall not be entitled to vote at any meeting for any purpose or otherwise to participate in any action taken by the Partnership or the Partners, or to receive notice of any meeting of Partners. (1) So long as any Series E Preferred Units remain outstanding, the Partnership will not, without the affirmative vote or consent of the holders of at least two- thirds of the Series E Preferred Units 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 units ranking prior to the Series E Preferred Units with respect to the payment of Distributions or the distribution of assets upon liquidation, dissolution or winding up or reclassify any authorized units of the Partnership into such units, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership's Amended and Restated Agreement of Limited Partnership, as amended, whether by merger, consolidation or otherwise (an "Event"), so as to materially and adversely affect any right, preference, privilege or voting power of the Series E Preferred Units 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 Series E Preferred Units remain outstanding with the terms thereof materially unchanged, taking into account that upon the occurrence of an Event, the Partnership 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 Series E Preferred Units and provided further that (x) any increase in the amount of the authorized preferred units or the creation or issuance of any other series of preferred units, or (y) any increase in the amount of authorized Series E Preferred Units or any other preferred units, in each case ranking on a parity with or junior to the Series E Preferred Units with respect to payment of Distributions 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 Series E Preferred Units shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption. (2) On each matter submitted to a vote of the holders of Series E Preferred Units in accordance with this Section 4.17, or as otherwise required by law, each Series E Preferred Unit shall be entitled to ten (10) votes, each of which ten (10) votes may be directed separately by the holder thereof. EX-10.7 5 EIGHTH AMENDMENT Exhibit 10.7 EIGHTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF DUKE REALTY LIMITED PARTNERSHIP In consideration of the issuance by Duke Realty Limited Partnership (the "Partnership") to Towne Investment Co., an Ohio limited partnership ("TIC") of Units in the Partnership as memorialized in TIC's execution of an Acknowledgement by Distributee on January 1, 1994, TIC has agreed to indemnify Duke Realty Investments, Inc., an Indiana corporation (the "General Partner") from and against certain recourse indebtedness of the Partnership effective as of the date on which non-recourse indebtedness secured by the contribution of property to the Partnership by TIC's predecessor-in-interest was repaid. Accordingly, the undersigned, as the General Partner and Partners (including TIC and the General Partner) holding more than ninety percent (90%) of the outstanding Units of Duke Realty Limited Partnership, hereby amend the Partnership's Amended and Restated Agreement of Limited Partnership, as heretofore amended (the "Partnership Agreement"), pursuant to Section 9.05(b) of the Partnership Agreement, to add a new Section 3.15 to read as provided in Exhibit A hereto. In all other respects, the Partnership Agreement shall continue in full force and effect as amended hereby. Any capitalized terms used in this Amendment and not defined herein have the meanings given to them in the Partnership Agreement. This Amendment may be executed in any number of counterparts and by separate signature pages, and all of such counterparts and signature pages shall for all purposes constitute an agreement binding on the parties hereto notwithstanding that all parties are not signatory to the same counterpart or signature page. This Amendment shall in all respects be governed by and construed in accordance with the laws of the State of Indiana. Executed as of February 18, 1999 but effective as of 12:01 a.m., September 30, 1998. DUKE REALTY INVESTMENTS, INC., as General Partner, as a holder of Units and as attorney-in-fact pursuant to Section 9.19 of the Partnership Agreement for all holders of Units who have consented in writing to this Amendment By: ------------------------------------ Dennis D. Oklak Executive Vice President, Chief Administrative Officer and Treasurer DMI PARTNERSHIP By: Duke Management, Inc., general partner By: --------------------------- Darell E. Zink, Jr. Executive Vice President, Chief Financial Officer and Secretary TOWNE INVESTMENT CO., an Ohio limited partnership By: --------------------------------- Neil K. Bortz, General Partner By: --------------------------------- Marvin Rosenberg, General Partner EXHIBIT A SECTION 3.15. INDEMNIFICATION OF CERTAIN RECOURSE DEBT. (a) Definitions. As used in this Section 3.15, the following terms shall have the meanings indicated: "Claim Percentage" for TIC means 100%; provided, however, in the event any other limited partner of the Partnership is an indemnitor with respect to an Indemnity Claim, the Claim Percentage for TIC with respect to such Indemnity Claim shall be the percentage determined by dividing TIC's Maximum Liability by the maximum liability with respect to such Indemnity Claim of all indemnitors of the related Recourse Debt. "Indemnity Claim" means any demand made to the General Partner by any holder of all or any part of the Recourse Debt for payment of all or any part thereof. "Indemnity Claim Amount" means, with respect to an Indemnity Claim, the amount determined as prescribed in subsection (c)(iv) of this section. "Indemnity Credit" for TIC means, at any time, all payments made prior to such time by TIC under subsection (b) of this section. "Maximum Liability" for TIC means $3,700,000. "Recourse Debt" means any and all indebtedness of the Partnership not evidenced by a non-recourse note. "TIC" means Towne Investment Co., an Ohio limited partnership, which is a Limited Partner as of September 30, 1998. (b) Indemnification. Upon and subject to the terms and provisions of this Section 3.15, TIC agrees to indemnify the General Partner from and against liability for a portion of each Indemnity Claim Amount (regardless of whether actually paid by the General Partner) equal to TIC's Claim Percentage of the Indemnity Claim Amount, subject, however, to the limitation that the maximum amount required at anytime to be indemnified hereunder by TIC shall not exceed the TIC Maximum Liability reduced (not below zero) by TIC's Indemnity Credit at such time. (c) Indemnification Procedure. (i) The General Partner shall not pay any portion of any Recourse Debt prior to (A) giving TIC written notice of the related Indemnity Claim and the opportunity to defend against the Indemnity Claim as provided in this subsection (c) and (B) the determination of the related Indemnity Claim Amount as provided in subsection (c)(iv) below. (ii) Whenever an Indemnity Claim arises, the General Partner shall promptly give written notice to TIC setting forth in reasonable detail, to the extent then available, the facts concerning the Indemnity Claim. (iii) TIC shall be entitled, at its sole expense, to assume the entire defense of each Indemnity Claim with counsel selected by TIC. (iv) If TIC chooses to defend against an Indemnity Claim, the related Indemnity Claim Amount shall be the amount specified in a written settlement agreement with the claimant that is approved in writing by the Indemnitors or in an order of a court of competent jurisdiction that is not further appealable. If TIC chooses not to defend against an Indemnity Claim, the related Indemnity Claim Amount shall be the amount of the Indemnity Claim specified in a written settlement agreement between the General Partner and the claimant or in an order of a court of competent jurisdiction that is not further appealable. (d) Partnership Indemnification of TIC. Subject to subsection (e) of this section, the Partnership shall indemnify TIC against all amounts required to be paid by TIC under the terms of this Section 3.15. (e) Limitation on the Partnership Obligations. TIC agrees for the benefit of the General Partner, and any successor general partner of the Partnership, that enforcement by TIC of (i) the Partnership's indemnity obligation under subsection (d) or (ii) the Partnership's obligation under any other document to assume, pay, or indemnify against any Recourse Debt shall be subject to the limitation that (A) no Partner of the Partnership shall be personally liable to TIC for performance by the Partnership of any such obligation, (B) TIC shall not be entitled to seek or obtain any personal money or other judgment against any Partner of the Partnership for the Partnership's default in performance of any such obligation, and (C) any such judgment obtained against the Partnership shall only be enforceable by TIC against the property and assets of the Partnership. (f) Assumption of TIC's Obligations. Upon the distribution of all the Units held by TIC to its partners, the obligations of TIC pursuant to this Section 3.15 shall be assigned to and assumed by the applicable partners in proportion to the number of Units distributed to each such partner, and each such partner shall become an indemnitor under this Section 3.15, and all obligations of TIC that are not then due and payable shall terminate and TIC shall be deemed no longer subject to this Section 3.15. Except as provided in this subsection (f), TIC shall not have the right to assign its obligations under this Section 3.15 without the express written consent of the General Partner. (g) Termination of Indemnitor's Obligations. This Section 3.15 shall continue in full force and effect until the first to occur of the following: (i) The death of an individual indemnitor (including an assignee of any indemnitor), at which time all obligations of the deceased individual indemnitor (a "Terminated Indemnitor") under this Section 3.15 that are not then due and payable shall terminate, and the Terminated Indemnitor shall be deemed no longer subject to this Section 3.15. Following termination with respect to a Terminated Indemnitor, this Section 3.15 shall remain effective and enforceable with respect to all other indemnitors then subject to this Section 3.15, and all allocations of obligations under this Section 3.15 based upon the total Claim Percentages held by indemnitors or a specified group of indemnitors shall thereafter be made. (ii) Upon the exchange pursuant to Section 7.07 of all the Units held by TIC or its successors, at which time all obligations of the indemnitors under this Section 3.15 that are not then due and payable shall terminate. (h) Notices. All notices, demands, or other communications given pursuant to this section shall be in writing and shall be sufficiently given if delivered by courier (including overnight delivery service) or sent by registered or certified mail, first class, postage prepaid, or by telecopy addressed as follows: (i) If to the General Partner or the Partnership, to: Duke Realty Investments, Inc. 8888 Keystone Crossing, Suite 1200 Indianapolis, Indiana 45240 Telecopier No. (317) 808-6790 Attention: John R. Gaskin, Vice President and General Counsel (ii) If to TIC, to: Towne Investment Co. 1055 St. Paul Place Cincinnati, Ohio 45202 Telecopier No. (513) 345-6975 Attention: Neil K. Bortz and Marvin Rosenberg or such other address with respect to any party subject to this section as such party may, from time to time, notify (as provided above) the General Partner and the other parties subject hereto. Any such notice, demand, or communication shall be deemed to have been given (A) if so mailed, as of the close of the third business day following the date so mailed, and (B) if personally delivered or otherwise sent as provided above, on the date received EX-10.18 6 SEVERANCE PAY PLAN Exhibit 10.18 DUKE REALTY SEVERANCE PAY PLAN ARTICLE I INTRODUCTION 1.1. Purpose. The Duke Realty Severance Pay Plan (the "Plan") is designed to provide severance benefits to selected officers and key employees of the Company and its Subsidiaries. 1.2. Effective Date. The Effective Date of the Plan is January 1, 1998. 1.3. Administration. The Plan shall be administered by the Committee. The Committee, from time to time, may adopt any rule or procedure it deems necessary or desirable for the proper and efficient administration of the Plan, provided it is consistent with the terms of the Plan. The decision of a majority of the Committee members shall constitute the decision of the Committee. The Committee's determinations and interpretations with respect to the Plan shall be final and binding on all parties. Any notice or document required to be given to or filed with the Committee will be properly given or filed if delivered or mailed by certified mail, postage prepaid, to the Committee at 8888 Keystone Crossing, Suite 1200, Indianapolis, Indiana 46240-2182. 1.4. Definitions. For purposes of this Plan, unless a different meaning is clearly required by the context: (a) "Board of Directors" means the board of directors of the Company. (b) "Change in Control of the Company" means (i) any merger, consolidation or similar transaction which involves the Company and in which persons who are the shareholders of the Company immediately prior to such transaction own, immediately after such transaction, shares of the surviving or combined entity which possess voting rights equal to or less than fifty percent (50%) of the voting rights of all shareholders of such entity, determined on a fully diluted basis; (ii) any sale, lease, exchange, transfer or other disposition of all or any substantial part of the consolidated assets of the Company; (iii) any tender, exchange, sale or other disposition (other than disposition of the stock of the Company or any Subsidiary in connection with bankruptcy, insolvency, foreclosure, receivership or other similar transactions) or purchases (other than purchases by the Company or any Company sponsored employee benefit plan, or purchases by members of the board of directors of the Company or any Subsidiary) of shares which represent more than twenty-five percent (25%) of the voting power of the Company or any Subsidiary; (iv) during any period of two (2) consecutive years, individuals who at the date of the adoption of the Plan constitute the Board of Directors cease for any reason to constitute at least a majority thereof, unless the election of each director at the beginning of such period has been approved by directors representing at least a majority of the directors then in office who were directors at the commencement of such two (2) year period; (v) a majority of the Board of Directors recommends the acceptance of or accept any agreement, contract, offer or other arrangement providing for, or any series of transactions resulting in, any of the transactions described above. Notwithstanding the foregoing, a Change in Control of the Company shall not occur as a result of the issuance of stock by the Company in connection with any public offering of its stock. (c) "Code" means the Internal Revenue Code, as amended. (d) "Committee" means the Executive Compensation Committee of the Board of Directors. (e) "Company" means Duke Realty Investments, Inc. (f) "Effective Date" means January 1, 1998. (g) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (h) "For Cause" means (i) the willful and continued failure of a Participant to perform his required duties as an officer or employee of the Company or any Subsidiary, (ii) any action by a Participant which involves willful misfeasance or gross negligence, (iii) the requirement of or direction by a federal or state regulatory agency which has jurisdiction over the Company or any Subsidiary to terminate the employment of the Participant, (iv) the conviction of the Participant of the commission of any criminal offense which involves dishonesty or breach of trust, or (v) any intentional breach by the Participant of a material term, condition or covenant of any agreement between the Participant and the Company or any Subsidiary. (i) "Good Reason" means a change in the Participant's status or position with the Company or Subsidiaries that does not represent a promotion from the Participant's status and position as in effect immediately prior to the Change in Control of the Company, a forced move to a location more than sixty (60) miles from the Participant's place of business prior to the Change in Control or a reduction by the Company and Subsidiaries in the Participant's base salary and/or a reduction in their annual incentive bonus target potential as in effect immediately prior to the Change in Control of the Company. (j) "Level One Benefits" means the severance benefits payable under Section 3.2 of the Plan. (k) "Level One Participant" means an officer or key employee who is designated to participate in the Plan and receive Level One Benefits as provided in Article II. (l) "Level Two Benefits" means the severance benefits payable under Section 3.3 of the Plan. (m) "Level Two Participant" means an officer or key employee who is designated to participate in the Plan and receive Level Two Benefits. (n) "Participant" means a Level One or Level Two Participant. (o) "Plan" means the severance pay plan embodied herein, as amended from time to time, known as the Duke Realty Severance Pay Plan. (p) "Section 16 Grantee" means a person subject to potential liability under Section 16(b) of the Exchange Act with respect to transactions involving equity securities of the Company. (q) "Subsidiary" or "Subsidiaries" means a corporation, partnership or limited liability company, a majority of the outstanding voting stock, general partnership interests or membership interest, as the case may be, of which is owned or controlled directly or indirectly, by the Company or by one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock having voting power for the election of directors, or trustees, as the case may be, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. (r) "Territory" means the states of Indiana, Illinois, Ohio, Kentucky, Missouri, Minnesota,Tennessee and any other state in which the Company or a Subsidiary maintains a business operation at the time the affected Participant terminates employment with the Company and Subsidiaries. ARTICLE II ELIGIBILITY AND PARTICIPATION Participation in the Plan is limited to those officers and key employees of the Company or a Subsidiary who, from time to time, shall be designated by the Committee. Committee members shall not be eligible to participate in this Plan while serving as Committee members. A designated employee will become a Participant in the Plan as of the later of the Effective Date or the date specified by the Committee. The Committee shall also designate whether the Participant will receive Level One Benefits under Section 3.2 or Level Two Benefits under Section 3.3. ARTICLE III BENEFITS 3.1. Eligibility for Severance Benefits. In the event of a Level One or Level Two Participant's involuntary termination of employment or voluntary termination for Good Reason from the Company and Subsidiaries within one year of a Change in Control, unless terminated by the Company and Subsidiaries For Cause, such Participant shall be eligible for severance benefits in accordance with this Article III. 3.2. Level One Benefits. If a Level One Participant's termination of employment occurs as provided in Section 3.1, the Level One Participant shall be entitled to monthly salary continuation payments, the total of which shall equal two times the sum of (i) the Level One Participant's base pay received in the calendar year immediately preceding the calendar year in which his employment terminated (the "Compensation Year"), (ii) any annual incentive bonus paid or payable to such Participant with respect to services performed in the Compensation Year and (iii) anylong term incentive bonus awarded to such Participant in the Compensation Year. For purposes of this calculation, the amount of any long term incentive bonus shall equal the value ascribed to such award by the Committee at the time of its grant. For example, if a Level One Participant's termination occurred in 1999 and he received $100,000 in base pay in 1998, received a $5,000 annual incentive bonus in 1999 for services performed in 1998 and received a long term incentive bonus in 1998 valued at $20,000, the benefit payable under this Section 3.2 would be $250,000 [($100,000 + $5,000 + $20,000) x 2]. 3.3. Level Two Benefits. If a Level Two Participant's termination of employment occurs as provided in Section 3.2, the Level Two Participant shall be entitled to monthly salary continuation payments equal to one-half of the amount that would be payable under Section 3.2 above if the Participant had been a Level One Participant. 3.4. Manner and Timing of Payment. The benefit payable under Section 3.2 shall be paid in 23 equal monthly payments and the benefit payable under Section 3.3 shall be paid in 12 equal monthly payments commencing on the last day of the month following the month in which the Participant's employment was terminated as described in Section 3.1. If a Participant dies after receiving at least one monthly payment under the Plan, any remaining monthly payments shall be paid to the Participant's surviving spouse, or to the Participant's estate if there is no surviving spouse on the date benefits are to be paid, in a lump sum on the last day of the month following the month of the Participant's death. 3.5. Forfeiture of Benefits. Notwithstanding any other provision to the contrary, in order to protect the Company's and Subsidiaries' viability and consequently their ability to pay the benefits under this Plan and the other benefit plans they maintain for the Participants, a Participant will forfeit all benefits under this Plan should the Participant, either individually or through any entity which is wholly or partially owned or controlled by the Participant, directly or indirectly, at any time prior to the Participant receiving all payments due him under the Plan, engage in the Territory in any of the following activities: (i) solicit in any manner, seek to obtain, or service the business of any customer of any of the Company or a Subsidiary, other than for the Company or a Subsidiary; (ii) become an owner of any business, if such business is substantially similar to or competes with the Company or a Subsidiary; (iii) become employed by or serve as an officer, director, consultant, independent contractor, agent or representative of any business which is substantially similar to or competes with the Company or a Subsidiary; or (iv) solicit the employment of or hire any employee of the Company or a Subsidiary, or encourage any employee to terminate his or her employment with the Company or a Subsidiary. For purposes of this Section 3.5, a "customer " shall be deemed to be any person, business, partnership, proprietorship, firm, organization or corporation which has done business with the Company or a Subsidiary or which has been solicited or serviced in any manner, directly or indirectly, by the Company or a Subsidiary within eighteen (18) months prior to the date of the Participant's conduct in question, and the phrase "service the business of any customer" means the development, modification, enhancement or improvement of any product or service offered by the Company or a Subsidiary or which is reasonably related to the products or services offered by the Company or a Subsidiary. Should the foregoing provisions be found to be unenforceable by a court of competent jurisdiction because they are determined to be overly broad or exceed the parameters and limitations necessary for the Company's and Subsidiaries' reasonable protection, then the restrictions shall be limited to the activities, geographic area or period of time that a court of competent jurisdiction deems equitable to the Participant and adequate to reasonably protect the Company and Subsidiaries. If a Participant is to forfeit his benefits pursuant to this Section 3.5, the Company and Subsidiaries shall stop all benefit payments otherwise payable but not yet paid to or for the Participant and may require the Participant to repay any benefits previously paid to the Participant under the Plan. 3.6. Withholding of Taxes. Each Participant shall be solely responsible for, and the Company or Subsidiaries will withhold from any amounts payable under this Plan, all legally required federal, state, city and local taxes. ARTICLE IV CLAIMS FOR BENEFITS It is not necessary that a Participant apply for benefits under the Plan. However, if a Participant wishes to file a claim for benefits, such claim must be in writing and filed with the Committee. If a claim is denied, the Committee will furnish the claimant with written notice of its decision, setting forth the specific reasons for the denial, references to the Plan provisions on which the denial is based, additional information necessary to perfect the claim, if any, and a description of the procedure for review of the denial. A claimant may request a review of the denial of a claim for benefits by filing a written application with the Committee within sixty (60) days after he receives notice of the denial. Such a claimant is entitled to review the Plan document and submit written issues and comments to the Committee. The Committee, within a reasonable time after it receives a request for review, will furnish the claimant with written notice of its decision, setting forth the specific reasons for the decision and references to the pertinent Plan provisions on which the decision is based. ARTICLE V MISCELLANEOUS 5.1. Amendment or Termination. The Board of Directors or the Committee may, at any time, without the approval of the stockholders of the Company (except as otherwise required by applicable law, rule or regulations, or listing requirements of any National Securities Exchange on which are listed any of the Company's equity securities, including without limitation any shareholder approval requirement of Rule 16b-3 or any successor safe harbor rule promulgated under the Exchange Act), alter, amend, modify, suspend or discontinue the Plan. 5.2. Information to be Furnished by Participants. Participants, or any other persons entitled to benefits under the Plan, must furnish to the Committee such documents, evidence, data or other information as the Committee considers necessary or desirable for the purpose of administering the Plan. The benefits under the Plan for each Participant, and each other person who is entitled to benefits hereunder, are to be provided on the condition that he furnish full, true and complete data, evidence or other information, and that he will promptly sign any document reasonably related to the administration of the Plan requested by the Committee. 5.3. Employment Rights. The Plan does not constitute a contract of employment and participation in the plan will not give a Participant the right to be rehired or retained in the employ of the Company or a Subsidiary, nor will participation in the Plan give any Participant any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. 5.4. Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person relying thereon considers pertinent and reliable, and signed, made or presented by the proper party or parties. 5.5. Gender and Number. Where the context admits, words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural. 5.6. Action by Company. Any action required of or permitted by the Company under the Plan shall be by resolution of the Board of Directors, by a committee of the Board of Directors or by a person or persons authorized by resolution of the Board of Directors or the committee of the Board of Directors. 5.7. Controlling Laws. Except to the extent superseded by laws of the United States, the laws of Indiana shall be controlling in all matters relating to the Plan. 5.8. Mistake of Fact. Any mistake of fact or misstatement of fact shall be corrected when it becomes known and proper adjustment made by reason thereof. 5.9. Severability. In the event any provisions of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the plan, and the Plan shall be construed and endorsed as if such illegal or invalid provisions had never been contained in the Plan. 5.10. Effect of Headings. The descriptive headings of the sections of this Plan are inserted for convenience of reference and identification only and do not constitute a part of this Plan for purposes of interpretation. 5.11. Nontransferability. The benefits payable under this Plan and any rights and privileges pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way, whether by operation of law or otherwise and shall not be subject to execution, attachment or similar process. 5.12. Liability. By participating in the Plan, each Participant agrees to release and hold harmless the Company, the Subsidiaries (and their respective directors, officers and employees) and the Committee, from and against any tax liability, including without limitation, interest and penalties, incurred by the Participant in connection with his participation in the Plan. 5.13. Funding. Benefits payable under this Plan to a Participant or to a beneficiary will be paid by the Company and Subsidiaries from their general assets. The Company is not required to segregate on its books or otherwise establish any funding procedure for any amount to be used for the payment of benefits under this Plan. The Company may, however, in its sole discretion, set funds aside in investments to meet its anticipated obligations under the Plan. Any such action or set- aside may not be deemed to create a trust of any kind between the Company and any Participant or beneficiary or to constitute the funding of any Plan benefits. Consequently, any person entitled to a payment under the Plan will have no rights greater than the rights of any other unsecured creditor of the Company. DUKE REALTY INVESTMENTS, INC. Dated: By: ------------------ ------------------------------------ Dennis D. Oklak, Executive Vice President and Chief Administrative Officer EX-11.1 7 STATEMENT OF FIXED CHARGES EXHIBIT 11.1 DUKE REALTY INVESTMENTS, INC. EARNINGS TO FIXED CHARGES CALCULATIONS (IN THOUSANDS)
DECEMBER 31, 1998 ------------ CONSOLIDATED NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 90,871 ALLOCATION TO PREFERRED SHARES 19,833 GAIN ON PROPERTY SALES (1,351) DRLP MINORITY INTEREST 12,241 INTEREST EXPENSE 60,217 ------- EARNINGS BEFORE FIXED CHARGES $181,811 ======= INTEREST EXPENSE $ 60,217 ALLOCATION TO PREFERRED SHARES 19,833 INTEREST COSTS CAPITALIZED 8,546 ------- TOTAL FIXED CHARGES $ 88,596 ======= FIXED CHARGE RATIO 2.05 =======
EX-11.2 8 STATEMENT OF DEBT SERVICE EXHIBIT 11.2 DUKE REALTY INVESTMENTS, INC. EARNINGS TO DEBT SERVICE CALCULATIONS (IN THOUSANDS)
DECEMBER 31, 1998 ------------ CONSOLIDATED NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 90,871 GAIN ON PROPERTY SALES (1,351) DRLP MINORITY INTEREST 12,241 RECURRING PRINCIPAL AMORTIZATION 7,072 INTEREST EXPENSE (EXCLUDES AMORTIZATION OF DEFERRED FINANCING FEES) 58,855 ------- EARNINGS BEFORE DEBT SERVICE 167,688 ======= INTEREST EXPENSE 58,855 RECURRING PRINCIPAL AMORTIZATION 7,072 ------- TOTAL DEBT SERVICE 65,927 ======= DEBT SERVICE RATIO 2.54 =======
EX-21 9 LIST OF SUBSIDIARIES Exhibit 21
SUBSIDIARIES OF DUKE REALTY INVESTMENTS, INC. Names Under Which State of Incorporation Subsidiary Does Subsidiary Or Organization Business ---------- ---------------------- ----------------- Duke Realty Limited Indiana Duke Realty Limited Partnership Partnership Duke Services, Inc. Indiana Duke Services, Inc. Duke Realty Services Indiana Duke Realty Services Limited Partnership Limited Partnership Duke Realty Indiana Duke Realty Construction, Inc. Construction, Inc. Duke Construction Indiana Duke Construction Limited Partnership Limited Partnership B/D Limited Partnership Indiana B/D Limited Partnership Lamida Partners Ohio Lamida Partners Limited Partnership Limited Partnership Kenwood Office Ohio Kenwood Office Associates Associated Park Creek Venture Indiana Park Creek Venture Parkrite Limited Indiana Parkrite Limited Partnership Partnership Post Road Limited Indiana Post Road Limited Partnership Partnership Shadeland Station Office Indiana Shadeland Station Office Associates II Limited Associates II Limited Partnership Partnership Dugan Realty, L.L.C. Indiana Dugan Realty, L.L.C. Duke Tees Joint Venture Indiana Duke Tees Joint Venture Park Fletcher Indiana Park Fletcher Limited Limited Partnership 2728 Partnership 2728 Cincinnati Development Ohio Cincinnati Development Group L.L.C. Group L.L.C. Dugan Office, L.L.C. Indiana Dugan Office, L.L.C. 625 Building, L.L.C. Missouri 625 Building, L.L.C. Minneapolis West Minnesota Minneapolis West Associates Associates Duke A&M, L.L.C. Ohio Duke A&M, L.L.C. Campus Development, Ohio Campus Development, L.L.C. L.L.C. Duke Neyer, L.L.C. Ohio Duke Neyer, L.L.C. Dugan SSP, L.L.C. Indiana Dugan SSL.C.
EX-23 10 AUDITORS CONSENT The Board of Directors DUKE REALTY INVESTMENTS, INC.: We consent to incorporation by reference in the registration statements No. 33-64567, No. 333-62381, No. 333-57755, No. 33-64659, No. 333-26845, No. 333-24289, No. 333-66919, No. 333-49911, No. 333-50081, No. 333-26833, and No. 333-04695 on Form S-3 and No. 33-55727, No. 333-39965 and No. 333-42513 on Form S-8 of Duke Realty Investments, Inc. of our report dated January 26, 1999, except as to note 12, which is as of March 1, 1999, relating to the consolidated balance sheets of Duke Realty Investments, Inc. and Subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1998, and the related schedule, which report appears in the December 31, 1998, annual report on Form 10-K of Duke Realty Investments, Inc. KPMG LLP Indianapolis, Indiana March 18, 1999 EX-24 11 POWERS OF ATTORNEY 87126/ Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ------------------------- Edward T. Baur Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ --------------------------- Geoffrey Button Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ --------------------------- Ngaire E. Cuneo Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ---------------------------- Howard L. Feinsand Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ -------------------------------- L. Ben Lytle Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ------------------------------- John D. Peterson Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ------------------------------- James E. Rogers Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ------------------------------- Daniel C. Staton Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ------------------------------- Jay J. Strauss Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ------------------------------- John W. Wynne Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ -------------------------------- Thomas L. Hefner Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, John R. Gaskin and Dennis D. Oklak, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ -------------------------------- Darell E. Zink, Jr. Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below hereby constitutes and appoints Thomas L. Hefner, Darell E. Zink, Jr. and John R. Gaskin, and each of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign the annual report on Form 10-K of Duke Realty Investments, Inc. for the year ended December 31, 1998, and any amendment thereof, and to file the same, with 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 in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: January 26, 1999 /s/ ------------------------------- Dennis D. Oklak EX-27 12 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES' DECEMBER 31, 1998 CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 12-MOS DEC-31-1998 DEC-31-1998 6,950 0 60,872 (1,737) 0 86,159 2,862,386 (179,887) 2,853,653 169,495 1,007,317 0 347,798 1,222,314 0 2,853,653 0 376,254 191,840 0 33,326 0 60,217 90,871 0 90,871 0 0 0 90,871 $1.13 $1.12
EX-99.1 13 SELECTED QUARTERLY FINANCIAL INFORMATION EXHIBIT 99.1 SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Selected quarterly information for the years ended December 31, 1998 and 1997 is as follows (in thousands, except per share amounts):
Quarter Ended ------------------------------------------------------ 1998 December 31 September 30 June 30 March 31 --------------------- ----------- ------------ ---------- --------- Revenues from Rental Operations $ 95,522 $ 90,348 $ 83,079 $ 79,676 Revenues from Service Operations 5,510 7,284 7,022 4,900 Net income available for common shares 23,302 23,449 21,858 22,262 Basic income per common share (2) $ 0.28 $ 0.29 $ 0.27 $ 0.29 Diluted income per common share (2) $ 0.27 $ 0.29 $ 0.27 $ 0.29 Weighted average common shares (2) 84,394 81,594 80,080 76,655 Weighted average common and dilutive potential common shares (2) 96,074 93,279 91,830 88,596 Funds From Operations (1) $ 42,990 $ 39,421 $ 36,933 $ 34,730 Cash flow provided by (used by): Operating activities $ 72,079 $ 48,798 $ 61,260 $ 39,051 Investing activities (233,013) (119,313) (242,439) (109,049) Financing activities 145,851 70,169 174,389 88,814 1997 -------------------- Revenues from Rental Operations $ 70,980 $ 56,218 $ 51,586 $ 50,918 Revenues from Service Operations $ 7,393 $ 5,917 $ 5,129 $ 3,939 Net income available for common shares $ 19,406 $ 16,911 $ 14,696 $ 14,986 Basic income per common share (2) $ 0. 26 $ 0.26 $ 0. 23 $ 0.24 Diluted income per common share (2) $ 0. 25 $ 0.26 $ 0. 23 $ 0.24 Weighted average common shares (2) 75,466 65,309 63,168 61,624 Weighted average common and dilutive potential common shares (2) 86,649 72,971 70,576 69,579 Funds From Operations (1) $ 33,126 $ 26,007 $ 24,406 $ 23,717 Cash flow provided by (used by): Operating activities $ 49,057 $ 38,676 $ 42,489 $ 28,973 Investing activities (216,788) (205,129) (134,244) (41,163) Financing activities 3,952 337,478 81,865 19,853
(1) Funds From Operations is defined by the National Association of Real Estate Investment Trusts as net income or loss excluding gains or losses from debt restructuring and sales of property plus depreciation and amortization, and after adjustments for minority interest and unconsolidated companies (adjustments for minority interest and unconsolidated companies are calculated to reflect Funds From Operations on same basis). Funds From Operations does not represent cash flow from operations as defined by generally accepted accounting principles, should not be considered as an alternative to net income as an indicator of the Company's operating performance, and is not indicative of cash available to fund all cash flow needs. (2) Amounts adjusted to reflect the Company's two-for-one stock split effected in August 1997. -----END PRIVACY-ENHANCED MESSAGE-----