-----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, WymsY4jtj7WpMnWWQyDllMmed54TpO6URkTSAoo9jZKeGOEVO6JMc6oEnbsXYAf8 zFt4yt5clL8MeSkXtfsl9w== 0000783280-98-000009.txt : 19980323 0000783280-98-000009.hdr.sgml : 19980323 ACCESSION NUMBER: 0000783280-98-000009 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980320 SROS: NYSE 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: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-09044 FILM NUMBER: 98570068 BUSINESS ADDRESS: STREET 1: 8888 KEYSTONE CROSSING STE 1200 CITY: INDIANAPOLIS STATE: IN ZIP: 46240 BUSINESS PHONE: 3175743531 10-K 1 DECEMBER 31, 1997 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, 1997 ---------------- 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 (I.R.S. Employer incorporation or organization) Identification No.) 8888 Keystone Crossing, Suite 1200 Indianapolis, Indiana 46240 ---------------------------------------- ----------------------------- (Address of principal executive offices) (Zip Code) (317) 846-4700 ------------------------------------------------- (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 ($.01 par value) New York Stock Exchange Series A Cumulative Redeemable) New York Stock Exchange Preferred Shares ($.01 par value)
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. ( ) The aggregate market value of the voting shares of the Registrant's outstanding common shares held by non-affiliates of the Registrant is $1,720,038,903 based on the last reported sale price on March 11, 1998. The number of Common Shares outstanding as of March 11, 1998 was 77,196,875 ($.01 par value). DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates by reference the Registrant's Proxy Statement related to the Annual Meeting of Shareholders to be held April 23, 1998. TABLE OF CONTENTS Form 10-K Item No. Page(s) ------- ------ PART I 1. Business 1 - 4 2. Properties 4 - 14 3. Legal Proceedings 14 4. Submission of Matters to a Vote of Security Holders 14 PART II 5. Market for the Registrant's Common Stock and Related Security Holder Matters. 15 6. Selected Financial Data 15 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 - 24 8. Financial Statements and Supplementary Data 24 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 24 PART III 10. Directors and Executive Officers of the Registrant 24 - 25 11. Executive Compensation 25 12. Security Ownership of Certain Beneficial Owners and Management 25 13. Certain Relationships and Related Transactions 25 PART IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 26 - 52 Signatures 54 - 55 Exhibits 56 - 57 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 26, 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's primary business segment is the ownership and rental of industrial, office and retail properties throughout the Midwest. As of December 31, 1997, the Company owned interests in a diversified portfolio of 380 rental properties comprising 45.9 million square feet (including 25 properties and three expansions comprising 5.2 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 and Nashville, Tennessee. In addition to its Rental Operations, the Company, through its Service Operations provides, on a fee basis, leasing, management, construction, development and other real estate services for approximately 8.3 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 of these industry segments. 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 620 employees as of December 31, 1997. - 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, unconsolidated partnerships and joint ventures (adjustments for minority interests, unconsolidated partnerships and joint ventures 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 its primary markets within the Midwest. The Company also expects to utilize its approximately 1,700 acres of unencumbered land and its many business relationships with more than 3,300 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 in the Midwest. 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. Consistent with its business strategy of expanding in attractive Midwestern markets, the Company carefully analyzed the real estate investment potential of several major Midwestern metropolitan areas. Based on this analysis, management concluded that the Minneapolis and Chicago markets offer attractive real estate investment returns in the industrial and suburban office markets based on the following factors: (i) fragmented competition; (ii) strong real estate fundamentals; and (iii) favorable economic conditions. - 2 - In October 1997, the Company acquired a 3.2 million gross square foot industrial and suburban office portfolio and the operating personnel of an independent real estate developer and operator in Minneapolis. Also in 1997, the Company established a regional office in Chicago and acquired 995,000 square feet of suburban office properties and 160 acres of land for the future development of office and industrial properties. In addition to these major transactions, the Company significantly expanded its presence in St. Louis through the acquisition of a 982,000 gross square foot primarily suburban office portfolio and the operating personnel of an independent real estate developer and operator. 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 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. 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 $1.1 billion through public debt and equity offerings during the three years ended December 31, 1997. 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 $200 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 March 11, 1998 was 25.79%. The Company's ratio of earnings to debt service and ratio of earnings to fixed charges for the year ended December 31, 1997 were 2.62x and 2.12x, 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. 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 - 3 - 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, 1997, the Company owns an interest in a diversified portfolio of 380 commercial properties encompassing approximately 45.9 million net rentable square feet (including 25 properties and three expansions comprising 5.2 million square feet under development) located primarily in five states and approximately 1,700 acres of land for future development. The properties are described on the following pages. - 4 -
Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- --------- ------- -------- ------------ IN-SERVICE ---------- INDUSTRIAL ---------- Indianapolis, Indiana PARK 100 BUSINESS PARK Building 38 Fee 100% 1978 1.11 6,000 100% Building 48 Fee 50%[1] 1984 8.63 127,410 100% Building 49 Fee 50%[1] 1982 4.55 89,600 100% Building 50 Fee 50%[1] 1982 4.09 51,200 100% Building 52 Fee 50%[1] 1983 2.70 34,800 100% Building 53 Fee 50%[1] 1984 4.23 76,800 100% Building 54 Fee 50%[1] 1984 4.42 76,800 100% Building 55 Fee 50%[1] 1984 3.83 43,200 85% Building 56 Fee 50%[1] 1984 15.94 300,000 0% Building 57 Fee 50%[1] 1984 7.70 128,800 100% Building 58 Fee 50%[1] 1984 8.03 128,800 100% Building 59 Fee 50%[1] 1985 5.14 83,200 100% Building 60 Fee 50%[1] 1985 4.78 83,200 85% Building 62 Fee 50%[1] 1986 7.70 128,800 100% Building 67 Fee 50%[1] 1987 4.23 72,350 100% Building 68 Fee 50%[1] 1987 4.23 72,360 100% Building 71 Fee 50%[1] 1987 9.06 193,400 100% Building 74 Fee 10%-50%[2] 1988 12.41 257,400 100% Building 76 Fee 10%-50%[2] 1988 5.10 81,695 48% Building 78 Fee 10%-50%[2] 1988 21.80 512,777 100% Building 79 Fee 100% 1988 4.47 66,000 100% Building 80 Fee 100% 1988 4.47 66,000 100% Building 83 Fee 100% 1989 5.34 96,000 35% Building 84 Fee 100% 1989 5.34 96,000 73% Building 85 Fee 10%-50%[2] 1989 9.70 180,100 100% Building 89 Fee 10%-50%[2] 1990 11.28 311,600 100% Building 91 Fee 10%-50%[2] 1990/1996 7.53 196,800 85% Building 92 Fee 10%-50%[2] 1991 4.38 45,917 100% Building 95 Fee 100% 1993 15.23 336,000 100% Building 96 Fee 100% 1994/1997 [3] 27.69 737,850 100% Building 97 Fee 100% 1994 13.38 280,800 94% Building 98 Fee 100% 1968/1995 37.34 508,306 100% Building 99 Fee 50%[4] 1994 18.00 364,800 100% Building 100 Fee 100% 1995 7.00 117,500 100% Building 101 Fee 50%[1] 1983 4.37 45,000 100% Building 105 Fee 50%[1] 1983 4.64 41,400 100% Building 106 Fee 50%[1] 1978 4.64 41,400 100% Building 107 Fee 100% 1984 3.56 58,783 45% Building 108 Fee 50%[1] 1983 6.36 60,300 100% Building 109 Fee 100% 1985 4.80 46,000 94% Building 113 Fee 50%[1] 1987 6.20 72,000 82% Building 114 Fee 50%[1] 1987 6.20 56,700 100% Building 117 Fee 10%-50%[2] 1988 13.36 135,600 90% Building 120 Fee 10%-50%[2] 1989 4.54 54,982 86% Building 122 Fee 100% 1990 6.17 73,274 100% Building 125 Fee 100% 1994/1996 13.81 195,080 100% Building 126 Fee 100% 1984 4.04 60,100 100% Building 127 Fee 100% 1995 6.50 93,600 100% Building 128 Fee 100% 1996 14.40 322,000 100% Building 129 Fee 100% 1996 16.00 320,000 100% Building 130 Fee 100% 1996 9.70 152,000 92% Building 131 Fee 100% 1997 21.00 415,680 100% Building 133 Fee 100% 1997 1.30 20,530 100% Georgetown Centre Bldg. 1 Fee 100% 1987 5.85 111,883 56% Georgetown Centre Bldg. 2 Fee 100% 1987 5.81 72,120 95% Georgetown Centre Bldg. 3 Fee 100% 1987 5.10 45,536 57% - 5 - Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- -------- ------- ------ ------------ PARK FLETCHER Building 2 Fee 50%[1] 1970 1.31 20,160 100% Building 4 Fee 50%[1] 1974 1.73 23,000 0% Building 6 Fee 50%[1] 1971 3.13 36,180 100% Building 7 Fee 50%[1] 1974 3.00 41,900 100% Building 8 Fee 50%[1] 1974 2.11 18,000 100% Building 14 Fee 100% 1978 1.39 19,480 100% Building 15 Fee 50%[1] 1979 5.74 72,800 100% Building 16 Fee 50%[1] 1979 3.17 35,200 100% Building 18 Fee 50%[1] 1980 5.52 43,950 100% Building 21 Fee 50%[1] 1983 2.95 37,224 79% Building 22 Fee 50%[1] 1983 2.96 48,635 58% Building 26 Fee 50%[1] 1983 2.91 28,340 100% Building 27 Fee 25%[1] 1985 3.01 39,178 75% Building 28 Fee 25%[1] 1985 7.22 93,880 100% Building 29 Fee 50%[1] 1987 7.16 92,044 100% Building 30 Fee 50%[1] 1989 5.93 78,568 100% Building 31 Fee 50%[1] 1990 2.62 33,029 100% Building 32 Fee 50%[1] 1990 5.43 67,297 100% Building 33 Fee 50%[1] 1997 7.50 112,710 100% Building 34 Fee 50%[1] 1997 13.00 230,400 100% SHADELAND STATION Buildings 204 & 205 Fee 100% 1984 4.09 48,600 100% HUNTER CREEK BUSINESS PARK Building 1 Fee 10%-50%[2] 1989 5.97 86,500 100% Building 2 Fee 10%-50%[2] 1989 8.86 202,560 83% HILLSDALE TECHNECTR. Building 1 Fee 50%[1] 1986 9.16 73,436 91% Building 2 Fee 50%[1] 1986 5.50 83,600 100% Building 3 Fee 50%[1] 1987 5.50 84,050 100% Building 4 Fee 100% 1987 7.85 73,874 100% Building 5 Fee 100% 1987 5.44 67,500 93% Building 6 Fee 100% 1987 4.25 64,000 100% Franklin Road 1962 Bus.Ctr. Fee 100% 1971,1974 [5] 18.65 338,925 82% Palomar Bus. Ctr. Fee 100% 1973 4.50 99,350 100% Nampac Fee 100% 1974 6.20 83,200 100% NORTH AIRPORT PARK Thomson Consumer Electronics Fee 50%[6] 1996 52.00 599,040 100% Building 2 Fee 100% 1997 22.50 377,280 100% 6060 Guion Rd. Fee 100% 1968/1974/1977 14.05 179,203 0% 4750 Kentucky Ave.Fee 100% 1974 11.01 125,000 100% 4316 W. Minnesota Fee 100% 1970 10.40 121,465 100% CARMEL, INDIANA HAMILTON CROSSING Building 1 Fee 100% 1989 4.70 51,825 91% GREENWOOD, INDIANA SOUTH PARK BUS.CTR. Building 2 Fee 100% 1990 7.10 86,806 74% LEBANON, INDIANA LEBANON BUS.PARK American Air Filter Fee 100% 1996 10.40 153,600 100% Little, Brown & Co. Fee 50%[6] 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% - 6 - Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- -------- ------- ------- ------------ CINCINNATI, OHIO PARK 50 TECHNECTR. Building 20 Fee 100% 1987 8.37 96,000 100% Building 25 Fee 100% 1989 12.20 78,328 81% GOVERNOR'S POINTE 4700 Building Fee 100% 1987 5.51 76,400 100% 4800 Building Fee 100% 1989 7.07 80,000 71% 4900 Building Fee 100% 1987 9.41 77,652 100% WORLD PARK Building 5 Fee 100% 1987 5.00 59,700 100% Building 6 Fee 100% 1987 7.26 92,400 100% Building 7 Fee 100% 1987 8.63 96,000 100% Building 8 Fee 100% 1989 14.60 192,000 97% Building 9 Fee 100% 1989 4.47 58,800 100% Building 11 Fee 100% 1989 8.98 96,000 100% Building 14 Fee 100% 1989 8.91 166,400 100% Building 15 Fee 100% 1990 6.50 93,600 100% Building 16 Fee 100% 1989 7.00 93,600 100% MicroAge Fee 50%[1] 1994 15.10 304,000 100% Building 18 Fee 100% 1997 16.90 252,000 100% ENTERPRISE BUS.PARK Building 1 Fee 100% 1990 7.52 87,400 91% Building 2 Fee 100% 1990 7.52 84,940 100% Building A Fee 100% 1987 2.65 20,888 100% Building B Fee 100% 1988 2.65 34,940 94% Building D Fee 100% 1989 5.40 60,322 93% FAIRFIELD BUS.CTR. Building D Fee 100% 1990 3.23 40,223 88% Building 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 93,945 100% OTHER INDUST. - CINCINNATI U.S. Post Office Bldg. Fee 40%[7] 1992 2.60 57,886 100% University Moving Fee 100% 1991 4.95 70,000 100% Creek Road Bldg.I Fee 100% 1971 2.05 38,715 100% Creek Road Bldg.II Fee 100% 1971 2.63 53,210 100% Cornell Commerce Ctr. Fee 100% 1989 9.91 167,695 94% Mosteller Dist. Ctr. Fee 100% 1957 [8] 25.80 357,796 100% Mosteller Dist. Ctr.II Fee 100% 1997 12.20 261,440 45% Perimeter Park Bldg.A Fee 100% 1991 2.92 28,100 100% Perimeter Park Bldg.B Fee 100% 1991 3.84 30,000 60% COLUMBUS, OHIO Pet Foods Bldg. Fee 100% 1993/1995 16.22 276,000 100% MBM Bldg. Fee 100% 1978 3.98 83,000 100% Sun TV Fee 100% 1995 33.42 793,807 100% SOUTH POINTE BUS. CTR. South Pointe A Fee 50% 1995 14.06 293,824 100% South Pointe B Fee 50% 1996 13.16 307,200 100% South Pointe C Fee 50% 1996 12.57 322,000 78% SouthPointe Bldg.D Fee 100% 1997 6.55 116,520 35% SouthPointe Bldg.E Fee 100% 1997 6.55 82,520 0% 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 Services Fee 100% 1994 22.50 214,840 100% Redken Labs Fee 100% 1994 28.79 166,400 100% Skyport Bldg.I Fee 100% 1997 15.10 316,800 100% - 7 - Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- -------- ------- -------- ------------ LOUISVILLE, KENTUCKY Dayco Fee 50%[1] 1995 30.00 282,539 100% FLORENCE, KENTUCKY Empire Commerce Ctr. Fee 100% 1973/1980 11.62 148,445 100% DECATUR, ILLINOIS PARK 101 BUS. CTR. Building 3 Fee 100% 1979 5.76 75,600 82% Building 8 Fee 100% 1980 3.16 50,400 77% NASHVILLE, TENNESSEE HAYWOOD OAKS TECHNECTR. Building 2 Fee 100% 1988 2.94 50,400 100% Building 3 Fee 100% 1988 2.94 52,800 100% Building 4 Fee 100% 1988 5.23 46,800 100% Building 5 Fee 100% 1988 5.23 61,171 100% Building 6 Fee 100% 1989 10.53 113,400 100% Building 7 Fee 100% 1995 8.24 66,873 100% Building 8 Fee 100% 1997 15.44 71,615 100% Greenbriar Bus.Park Fee 100% 1986 10.73 134,759 98% Keebler Bldg. Fee 100% 1985 4.39 36,150 100% MILWAUKEE, WISCONSIN S.F. Music Box Bldg. Fee 33.33%[9] 1993 8.90 153,600 100% ST. LOUIS, MISSOURI I-70 Ctr. Fee 100% 1986 4.57 76,240 100% 1920 Beltway Fee 100% 1986 4.44 70,000 100% Alfa Laval Fee 100% 1996 12.76 129,500 100% EARTH CITY Dukeport I Fee 100% 1996 21.24 403,200 100% Dukeport II Fee 100% 1997 14.70 244,800 65% RIVERPORT Scripts Bldg. Fee 100% 1992 10.81 119,000 100% Riverport Dist. Fee 100% 1990 5.96 100,000 100% Shultz Bldg. 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 99% CLEVELAND, OHIO Johnson Controls Fee 100% 1972 14.56 85,410 100% Dyment Fee 100% 1988 12.00 246,140 100% Mr. Coffee Fee 100% 1997 35.00 458,000 100% SOLON INDUST.PARK 30600 Carter Fee 100% 1971 11.30 190,188 90% 6230 Cochran Fee 100% 1977 7.20 100,365 84% 31900 Solon-Front Fee 100% 1974 8.30 85,000 100% 5821 Solon Fee 100% 1970 5.80 66,638 100% 6161 Cochran Fee 100% 1978 6.10 62,400 85% 5901 Harper Fee 100% 1970 4.10 54,719 70% 29125 Solon Fee 100% 1980 5.90 47,329 100% 6661 Cochran Fee 100% 1979 4.70 39,000 100% 6521 Davis Fee 100% 1979 3.20 21,600 100% 31900 Solon-Rear Fee 100% 1982 5.30 7,193 100% MINNEAPOLIS, MINNESOTA Enterprise Indust.C Fee 100% 1979 10.88 165,755 76% Apollo Dist.Ctr. Fee 100% 1997 11.05 168,480 0% Sibley Indust. Ctr. Fee 100% 1973 2.88 54,612 100% Sibley Indust. Ctr. Fee 100% 1972 2.58 37,800 100% Sibley Indust. Ctr. Fee 100% 1968 4.10 32,810 39% Yankee Place Fee 100% 1986 19.03 221,075 90% - 8 - Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- --------- ------- ------- ----------- Larc Indust. Park I Fee 100% 1977 4.59 67,200 85% 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 41% Larc Indust. Park V Fee 100% 1980 1.54 22,880 100% Larc Indust. Park VI Fee 100% 1975 3.91 63,600 81% Larc Indust. Park VII Fee 100% 1973 2.65 41,088 100% Hampshire Dist. Ctr. Fee 100% 1979 9.26 159,200 100% Hampshire Dist. Ctr. Fee 100% 1979 9.40 157,000 100% Penn Corporate Bldg. Fee 100% 1977 2.08 40,844 100% Bloomington Indust. Fee 100% 1963 7.40 100,852 78% Edina Inter- change I Fee 100% 1995 4.73 73,809 95% Edina Inter- change II Fee 100% 1980 3.46 55,006 100% Edina Inter- change III Fee 100% 1981 6.39 62,784 100% Edina Inter- change IV Fee 100% 1974 1.99 22,440 75% Edina Inter- change V Fee 100% 1974 4.92 139,101 100% Pakwa Bus. Park I Fee 100% 1979 1.67 38,196 100% Pakwa Bus. Park II Fee 100% 1979 1.41 21,254 100% Pakwa Bus. Park III Fee 100% 1979 1.32 19,978 89% 7540 Bush Lake Rd. Fee 100% 1967 4.74 72,300 100% 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 97% Cornerstone Bus. Fee 100% 1996 13.49 222,494 100% Westside Bus.Park Fee 100% 1987 9.10 114,800 100% Oxford Indust. Fee 100% 1971 1.23 16,736 0% Cedar Lake Bus.Ctr. Fee 100% 1976 3.05 50,400 100% Medicine Lake Indust. 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 96% Bass Lake Bus.Ctr.Fee 100% 1981 5.33 47,368 100% OFFICE ------- INDIANAPOLIS, INDIANA PARK 100 BUS. PARK Building 34 Fee 100% 1979 2.00 22,272 97% Building 116 Fee 100% 1988 5.28 35,700 84% Building 118 Fee 100% 1988 6.50 35,700 100% Building 119 Fee 100% 1989 6.50 53,300 100% CopyRite Bldg. Fee 50%[4] 1992 3.88 48,000 100% Building 132 Fee 100% 1997 4.40 27,600 43% WOODFIELD AT THE CROSSING Two Woodfield Crsg. Fee 100% 1987 7.50 117,818 84% Three Woodfield Crsg. Fee 100% 1989 13.30 259,777 98% 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 6.24 121,246 89% SHADELAND STATION 7240 Shadeland Sta. Fee 66.67%[10] 1985 2.14 45,585 82% 7330 Shadeland Sta. Fee 100% 1988 4.50 42,619 87% 7340 Shadeland Sta. Fee 100% 1989 2.50 32,235 77% 7351 Shadeland Sta. Fee 100% 1983 2.14 27,740 92% 7369 Shadeland Sta. Fee 100% 1989 2.20 15,551 100% 7400 Shadeland Sta. Fee 100% 1990 2.80 49,544 100% KEYSTONE AT THE CROSSING F.C. Tucker Fee/Ground Bldg. Lease [11] 100% 1978 N/A 4,840 100% 3520 Commerce Ground/Bldg. Crsg. Lease [12] 100% 1976 2.69 30,000 0% 8465 Keystone Fee 100% 1983 1.31 28,298 99% 8555 Keystone Fee/Ground Lease [11] 100% 1985 N/A 75,545 94% Community MOB Fee 100% 1995 4.00 39,205 100% - 9 - Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- --------- ------- ------- ----------- HAMILTON CROSSING Hamilton Crsg. Bldg. 2 Fee 100% 1997 5.10 32,800 77% GREENWOOD, INDIANA SOUTH PARK BUS. CTR. Building 1 Fee 100% 1989 5.40 39,715 96% Building 3 Fee 100% 1990 3.25 35,900 100% St. Francis Fee/Ground 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 97% 8700 Governor's Hill Fee 100% 1985 4.98 58,617 100% 8790 Governor's Hill Fee 100% 1985 5.00 58,177 95% 8800 Governor's Hill Fee 100% 1985 2.13 28,700 100% GOVERNOR'S POINTE 4605 Governor's Pte. Fee 100% 1990 8.00 178,306 100% 4705 Governor's Pte. Fee 100% 1988 7.50 140,984 100% 4770 Governor's Pte. Fee 100% 1986 4.50 76,037 72% Anthem Prescrip. Mgmt. Fee 100% 1997 5.00 78,240 100% Gov. Pte.4660 Bldg. Fee 100% 1997 4.65 76,465 91% PARK 50 TECHNECTR. SDRC Building Fee 100% 1991 13.00 221,215 100% Building 17 Fee 100% 1985 8.19 70,644 97% DOWNTOWN CINCINNATI 311 Elm Street Grnd/Bldg. Lse [14] 100% 1902/1986 [15] N/A 90,127 100% 312 Plum Street Fee 100% 1987 0.69 230,489 89% 312 Elm Street Fee 100% 1992 1.10 378,786 96% 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 96% Ohio National Fee 100% 1996 9.00 212,125 100% Kenwood Executive Ctr. Fee 100% 1981 3.46 49,984 97% TRI-COUNTY Triangle Off. Park Fee 100% 1965/1985[17] 15.64 172,650 92% Tri-County Off. 1971, 1973 Park Fee 100% 1982 [18] 11.27 102,166 88% Executive Plaza I Fee 100% 1980 5.83 87,912 97% Executive Plaza II Fee 100% 1981 5.02 88,885 100% BLUE ASH West Lake Ctr. Fee 100% 1981 11.76 179,850 98% Lake Forest Pl. Fee 100% 1985 13.50 217,264 94% Huntington Bank Bldg. Fee 100% 1986 0.94 3,235 100% Blue Ash Off. Ctr. VI Fee 100% 1989 2.96 35,603 90% OTHER OFFICE - CINCINNATI Fidelity Dr. Bldg. Fee 100% 1972 8.34 38,000 100% Franciscan Fee/Ground Health Sys. Lease[19] 100% 1996 N/A 36,634 100% One Ashview Pl. 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 (Litel) Fee 100% 1990 13.00 164,639 100% 5555 ParkCtr. (Xerox) Fee 100% 1992 6.09 83,971 94% 4700 Lakehurst (Indiana Ins.) Fee 100% 1994 3.86 49,600 100% Sterling 2 Fee 100% 1995 3.33 57,660 100% John Alden Fee 100% 1995 6.51 101,112 76% 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% - 10 - Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- --------- ------- ------- ----------- 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 98% CompManagement Fee 100% 1997 5.60 68,700 100% CLEVELAND, OHIO Rock Run - N. Fee 100% 1984 5.00 62,565 99% Rock Run - Ctr. Fee 100% 1985 5.00 61,099 93% Rock Run - S. Fee 100% 1986 5.00 62,989 84% Freedom Square I Fee 100% 1980 2.59 40,208 96% Freedom Square II Fee 100% 1987 7.41 116,665 92% Corporate Plaza I Fee 100% 1989 6.10 114,028 99% Corporate Plz. II Fee 100% 1991 4.90 103,834 90% One Corp. Exch. Fee 100% 1989 5.30 88,376 91% Corporate Ctr.I Fee 100% 1985 5.33 99,260 99% Corporate Ctr.II Fee 100% 1987 5.32 104,402 82% Corporate Place Fee 100% 1988 4.50 84,768 98% Corporate Circle Fee 100% 1983 6.65 120,444 99% Freedom Sq. III Fee 100% 1997 2.00 71,025 87% 6111 Oak Tree Fee 100% 1979-1995 5.00 70,906 83% Landerbrook Fee 100% 1997 8.00 110,148 72% ST. LOUIS, MISSOURI Laumeier I Fee 100% 1987 4.26 113,852 100% Laumeier II Fee 100% 1988 4.64 112,477 100% Westview Place Fee 100% 1988 2.69 114,722 97% Westmark Fee 100% 1987 6.95 123,889 100% EARTH CITY 3300 Pointe 70 Fee 100% 1989 6.61 103,549 99% 3322 NGIC Fee 100% 1987 6.61 112,000 100% Riverport Tower Fee 100% 1991 317,891 100% MARYVILLE CTR. 500 Maryville Ctr.Fee 100% 1984 9.27 165,544 100% 530 Maryville Ctr.Fee 100% 1990 5.31 107,957 98% 550 Maryville Ctr.Fee 100% 1988 4.55 97,109 96% 635 Maryville Ctr.Fee 100% 1987 8.78 148,307 97% 655 Maryville Ctr.Fee 100% 1994 6.26 90,499 100% 540 Maryville Ctr.Fee 100% 1990 5.23 107,973 98% Twin Oaks Fee 100% 1980 5.91 85,066 98% 625 Maryville Ctr.Fee 50% 1994 6.26 101,576 100% CHICAGO, ILLINOIS Central Park of Lisle Fee 50% [20] 1990 8.88 345,200 93% Executive Towers I Fee 100% 1983 6.33 203,302 96% Executive Towers II Fee 100% 1984 6.33 224,140 99% Executive Towers III Fee 100% 1987 6.33 222,400 100% MINNEAPOLIS, MINNESOTA 10801 Red Cr.Dr. Fee 100% 1977 4.00 60,078 100% Medicine Lake Prof. Bldg. Fee 100% 1970 1.54 8,100 100% RETAIL ------ INDIANAPOLIS, INDIANA PARK 100 BUS. PARK Building 32 Fee 100% 1978 0.82 14,504 58% Building 121 Fee 100% 1989 2.27 19,716 76% CASTLETON CORNER Michael's Plaza Fee 100% 1984 4.50 46,374 100% Cub Plaza Fee 100% 1986 6.83 60,136 100% FORT WAYNE, INDIANA Coldwater Crsg. Fee 100% 1990 35.38 246,365 89% - 11 - Net Percent Year Land Rentable Occupied at Name/ Ownership Company's Constd/ Area Area December 31, Location Interest Ownership Expanded (Acres) (sq.ft.) 1997 ------------ --------- --------- --------- ------- -------- ------------ 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 84% DAYTON, OHIO Sugarcreek Plaza Fee 100% 1988 17.46 77,940 97% CINCINNATI, OHIO Governor's Plaza Fee 100% 1990 35.00 181,493 99% King's Mall Shp.Ctr. I Fee 100% 1990 5.68 52,661 94% King's Mall Shp.Ctr. II Fee 100% 1988 8.90 67,725 92% Steinberg's 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 Fee 100% 1995 1.13 15,000 100% Bigg's SuperCtr. Fee 100% 1996 14.00 170,791 100% Fountain Place Fee 25%[21] 1997 1.98 207,170 95% GOVERNOR'S POINTE Lowe's Fee 100% 1997 15.00 128,747 100% FLORENCE, KENTUCKY Sofa Express Fee 100% 1997 1.78 20,250 100% BLOOMINGTON, ILLINOIS Lakewood Plaza Fee 100% 1987 11.23 87,010 94% CHAMPAIGN, ILLINOIS Market View Fee 100% 1985 8.50 86,553 88% COLUMBUS, OHIO Galyans Trading Company Fee 100% 1984 4.90 74,636 100% Tuttle Retail Ctr. Fee 100% 1995/1996 13.44 144,340 100% -------- ---------- IN-SERVICE TOTAL 2,684.36 40,668,043 -------- ----------
UNDER CONSTRUCTION ------------------
Net Percent Expected Land Rentable Pre-leased at Name/ Ownership Company's In-service Area Area December 31, Location Interest Ownership Date (Acres) (sq.ft.) 1997 - ------------ ---------- ---------- --------- ------- --------- ------------- INDUSTRIAL - ---------- INDIANAPOLIS, INDIANA Building 134 Fee 100% May-98 8.70 110,400 41% Franklin Road Exp. Fee 100% Mar-98 9.35 150,000 61% PARK FLETCHER BUS. PARK Building 35 Fee 50%[1] Oct-97 8.10 96,000 67% Building 36 Fee 50%[1] Feb-98 3.90 52,800 0% LEBANON, INDIANA LEBANON BUS. PARK Prentice Hall Fee 100% Jan-98 38.90 577,340 100% Lebanon (General Cable) Fee 100% May-98 23.30 395,472 50% Thomson Consumer Exp. Fee 50% Jun-98 12.02 740,155 100% CINCINNATI, OHIO WORLD PARK World Park Bldg 28 Fee 100% Jan-98 11.60 220,160 87% World Park Bldg 29 Fee 100% Apr-98 21.40 452,000 100% COLUMBUS, OHIO Sun TV Exp. Fee 100% Jun-98 12.00 231,936 100% - 12 - Net Percent Expected Land Rentable Pre-leased at Name/ Ownership Company's In-service Area Area December 31, Location Interest Ownership Date (Acres) (sq.ft.) 1997 - ----------- ---------- --------- ---------- ------- -------- ------------- CLEVELAND, OHIO Fountain Pkwy Bldg. B1 Fee 100% May-98 6.50 108,704 0% Strongsville Bldg. 1 Fee 100% May-98 4.50 72,000 0% ST. LOUIS, MISSOURI EARTH CITY Dukeport 3 Fee 100% Dec-97 9.50 214,400 0% Dukeport 4 Fee 100% Apr-98 12.70 153,600 0% West Port Ctr. I Fee 100% May-98 11.90 177,600 0% OFFICE INDIANAPOLIS, INDIANA PARK 100 BUS. PARK Building 135 Fee 100% Mar-98 6.00 77,125 74% RIVER ROAD Software Artistry Fee 100% Jan-98 6.90 108,273 75% PARKWOOD CROSSING Four Parkwood Fee 100% Sep-98 5.90 132,836 0% CINCINNATI, OHIO Gov. Pointe 4680 Bldg. Fee 100% Aug-98 9.80 126,102 0% COLUMBUS, OHIO TUTTLE CROSSING Rings Road Office Bldg. Fee 100% Apr-98 11.01 145,000 29% Sterling 4 Fee 100% Apr-98 3.10 94,219 100% One Easton Oval Fee 100% May-98 7.69 127,080 0% ST. LOUIS, MISSOURI EARTH CITY MCI Fee 100% May-98 11.90 97,356 100% 520 Maryville Ctr. Fee 100% Dec-98 5.30 113,659 0% NASHVILLE, TENNESSEE CREEKSIDE CROSSING Creekside Crossing One Fee 100% Jul-98 5.35 112,800 0% CLEVELAND, OHIO Park Ctr. Bldg.1 Fee 100% Oct-98 6.68 133,550 0% RETAIL - ------ CINCINNATI, OHIO Tri-County Marketplace Fee 100% Oct-98 10.38 74,174 100% Western Hills Marketplace Fee 100% Sep-98 10.50 148,140 82% -------- ---------- UNDER CONST. TOTAL 294.88 5,242,881 -------- ---------- 2,979.24 45,910,924 ======== ==========
[1] These buildings 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. This limited liability company owns a 50% general partnership interest in Park Fletcher Buildings 27 and 28 and shares in the profit or loss from these buildings in accordance with the limited liability company's 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. - 13 - [3] This building was constructed in 1994 and expanded in 1997. [4] 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. [5] This building was constructed in three phases; 1962, 1971 and 1974. [6] This building was contributed to the limited liability company referenced in footnote [1] in 1996. [7] 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 the Company's ownership interest. [8] This building was renovated in 1996. [9] 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. [10] 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. [11] The Company owns the building and has a leasehold interest in the land underlying this building with a lease term expiring October 31, 2067. [12] The Company has a leasehold interest in this building with a lease term expiring May 9, 2006. [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 30, 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 has a 50% general partnership interest. The Company shares in the profit or loss from such 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 June 2095. [20] 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 this building in accordance with the Company's ownership interest. [21] This building is owned through a limited liability company in which the partnership Company is a 25% member. The limited liability company will own a 57.5% interest in the Fountain Place retail project. ITEM 3. LEGAL PROCEEDINGS There are no pending legal proceedings to which the Company or any subsidiary was a party or to which any of their property is subject other than routine litigation incidental to the Company's business. In the opinion of management, such litigation is not material to the Company's business operations or financial condition. 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, 1997. - 14 - 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 4, 1998, there were 8,332 record holders of Common Shares.
1997 (1) 1996 (1) ------------------------------ ------------------------- QUARTER ENDED HIGH LOW DIVIDEND HIGH LOW DIVIDEND ---------------- ---- ----- -------- ---- ----- -------- December 31 $25.00 $21.38 $.300 $19.25 $16.38 $.255 September 30 23.63 19.81 .295 16.62 14.50 .255 June 30 20.88 17.13 .255 15.25 14.19 .245 March 31 21.44 19.00 .255 16.25 14.56 .245
(1) All stock prices and dividend amounts reflect the Company's two-for-one stock split effected in August 1997. On January 29, 1998, the Company declared a quarterly cash dividend of $0.30 per share payable on February 27, 1998 to common shareholders of record on February 13, 1998. Following is a summary of the taxable nature of the Company's dividends for the three years ended December 31:
1997 1996 1995 ---- ---- ---- Total dividends per share $1.10 $1.00 $.96 ==== ==== === Percent taxable as ordinary income 100.00% 99.10% 85.51% Percent taxable as long-term capital gains - - .82% Percent non-taxable as return of capital - .90% 13.67% ------- ------- ------- 100.00% 100.00% 100.00% ======= ======= =======
Dividends per share of $.97 and $.89 were required for the Company to maintain its REIT status in 1997 and 1996, respectively. 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, 1997. 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):
1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- RESULTS OF OPERATIONS: Revenues: Rental Operations $ 229,702 $ 162,160 $113,641 $ 89,299 $ 33,648 Service Operations 22,378 19,929 17,777 18,473 5,654 --------- --------- ------- ------- ------- TOTAL REVENUES $ 252,080 $ 182,089 $131,418 $107,772 $ 39,302 ========= ========== ======= ======= ======= NET INCOME (LOSS) AVAILABLE FOR COMMON SHARES $ 65,999 $ 50,872 $ 35,019 $ 26,216 $ 5,013 ========= ========= ======== ======= ======= PER SHARE DATA (1): Net Income per Common Share Basic $ .99 $ .91 $ .77 $ .77 $ .46 Diluted .98 .90 .77 .77 .46 Dividends per Common Share 1.10 1.00 .96 .92 .84 Weighted Average Common Shares Outstanding 66,427 56,134 45,358 34,278 10,918 Weighted Average Common and Dilutive potential Common Shares 74,993 64,398 53,802 43,002 13,152 - 15 - BALANCE SHEET DATA (at December 31): Total Assets $2,176,214 $1,361,142 $1,045,588 $774,901 $632,885 Total Debt 720,119 525,815 454,820 298,640 248,433 Total Preferred Equity 218,338 72,288 - - - Total Shareholders' Equity 1,234,681 754,932 534,789 445,384 347,038 Total Common Shares Outstanding (1) 76,065 58,972 48,304 40,782 32,092 OTHER DATA: Funds From Operations (2) $ 107,256 $ 76,079 $ 54,746 $ 38,198 $ 11,064 Cash Flow Provided by (Used by): Operating activities $ 159,195 $ 95,135 $ 78,620 $ 51,873 $ 14,363 Investing activities (597,324) (276,748) (289,569) (116,238)(315,025) Financing activities 443,148 181,220 176,243 94,733 310,717
(1)Information for 1993 has been adjusted for the 1 for 4.2 reverse stock split effected in 1993. 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, unconsolidated partnerships and joint ventures (adjustments for minority interests, unconsolidated partnerships and joint ventures 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 operating results depend primarily upon income from the rental operations of its industrial, office and retail properties located in its primary markets. This income from rental operations is substantially influenced by the supply and demand for the Company's rental space in its primary markets. In addition, the Company's continued growth is dependent upon 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 94.5% the last two years and was 94.1% at December 31, 1997. 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 also includes developing and acquiring additional rental properties in its primary markets and expanding into other attractive Midwestern markets. A new statistic that the Company started tracking in 1996 is 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 45.3% and 42.2% of the in-service portfolio at December 31, 1997 and December 31, 1996, respectively. As a result of the loss of a 90,000 square foot downtown Cincinnati office tenant in 1996, along with the effects of a property tax reassessment in another downtown Cincinnati property, Same Property FFO increased only 1.1% from 1995 to 1996. In 1997, Same Property FFO improved significantly with a 4.7% increase over 1996. - 16 - The following table sets forth information regarding the Company's in- service portfolio of rental properties as of December 31, 1997 and 1996 (square feet in thousands):
Total Percent of Square Feet Total Square Feet Percent Occupied ------------------ ----------------- ---------------- Type 1997 1996 1997 1996 1997 1996 ---- ------ ------ ------- ------ ------- ------- INDUSTRIAL Service Centers 3,707 3,151 9.1% 11.5% 91.9% 94.0% Bulk 24,173 15,173 59.4% 55.4% 93.5% 95.1% OFFICE Suburban 9,758 6,319 24.0% 23.1% 95.9% 96.6% CBD 699 699 1.7% 2.5% 93.9% 87.1% Medical 290 370 .8% 1.3% 98.4% 92.8% RETAIL 2,041 1,690 5.0% 6.2% 95.8% 93.7% ------ ------ ------ ------ Total 40,668 27,402 100.0% 100.0% 94.1% 95.0% ====== ====== ====== ======
Management expects occupancy of the in-service property portfolio to remain stable because (i) only 10.2% and 12.2% of the Company's occupied square footage is subject to leases expiring in 1998 and 1999, respectively, and (ii) the Company's renewal percentage averaged 81%, 80% and 65% in 1997, 1996 and 1995, respectively. The following tables reflects the Company's in-service lease expiration schedules as of December 31, 1997, by product type indicating square footage and annualized net effective rents under expiring leases (in thousands, except per square foot amounts):
Industrial Portfolio Office Portfolio Retail Portfolio Total Portfolio -------------------- ---------------- ---------------- --------------- Yr of Sq. Sq. Sq. Sq. Exp Ft. Rent Ft. Rent Ft. Rent Ft. Rent - ------ ----- ----- ----- ----- ----- ----- ----- ----- 1998 2,951 $ 11,508 874 $ 9,738 81 $ 918 3,906 $ 22,164 1999 3,236 13,738 1,322 14,560 114 1,197 4,672 29,495 2000 2,739 11,696 1,052 13,675 126 1,525 3,917 26,896 2001 2,944 11,940 1,465 17,639 89 1,064 4,498 30,643 2002 3,821 15,234 1,443 16,597 157 1,747 5,421 33,578 2003 1,455 5,880 475 5,661 57 541 1,987 12,082 2004 775 3,465 298 3,659 17 178 1,090 7,302 2005 1,761 5,593 924 12,916 177 1,518 2,862 20,027 2006 2,052 7,212 625 9,606 5 67 2,682 16,885 2007 1,875 5,813 362 4,638 76 760 2,313 11,211 There- after 2,394 8,995 1,461 20,190 1,055 8,513 4,910 37,698 ------ ------- ------ ------- ----- ------ ------ ------ Total Leased 26,003 $101,074 10,301 $128,879 1,954 $18,028 38,258 $247,981 ====== ======= ====== ======= ===== ====== ====== ======= Total Port- folio 27,880 10,747 2,041 40,668 ====== ====== ===== ====== Annualized net effective rent per sq. foot leased $ 3.89 $ 12.51 $ 9.23 $ 6.48 ======= ======= ====== =======
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 a comparable or 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 - 17 - other attractive Midwestern markets; and (iii) the completion of the 5.2 million square feet of properties under development at December 31, 1997 over the next five quarters. The 5.2 million square feet of properties under development should provide future earnings from rental operations growth for the Company as they are placed in service as follows (in thousands, except percentages):
Anticipated Estimated Anticipated In-Service Square Percent Project Stabilized Date Feet Pre-Leased Costs Return ----------- -------- ---------- ----------- ------------ 1st Quarter 1998 1,496 71% $ 50,258 11.3% 2nd Quarter 1998 2,779 68% 96,427 11.1% 3rd Quarter 1998 387 31% 35,119 12.1% 4th Quarter 1998 and thereafter 581 13% 75,508 11.2% ----- ------- 5,243 60% $257,312 11.3% ===== =======
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, 1997 is as follows (in thousands, except number of properties and per share amounts):
1997 1996 1995 ------- -------- ------- Rental Operations revenues $229,702 $162,160 $113,641 Service Operations revenues 22,378 19,929 17,777 Earnings from Rental Operations 83,740 54,332 37,275 Earnings from Service Operations 7,153 6,436 6,569 Operating income 84,363 56,049 40,308 Net income available for common shares $ 65,999 $ 50,872 $ 35,019 Weighted average common shares outstanding (1) 66,427 56,134 45,358 Weighted average common and dilutive potential common shares (1) 74,993 64,398 53,802 Basic income per common share (1) $ .99 $ .91 $ .77 Diluted income per common share (1) $ .98 $ .90 $ .77 Number of in-service properties at end of year 355 249 201 In-service square footage at end of year 40,668 27,402 20,073 Under development square footage at end of year 5,243 3,801 3,448
(1) As adjusted for the two-for-one stock split effected in August 1997. 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. - 18 - Interest expense increased by approximately $7.7 million. This increase was primarily because of interest expense on the $90 million of unsecured debt which the Company issued in 1996 under its medium- term note program. These notes bear interest at a weighted average rate of 7.20% and were outstanding a full year in 1997 as compared to less than six months in 1996. 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 December 31, 1996 to $83.7 million for the year ended December 31, 1997. Service Operations ---------------- Service Operations revenues increased from $19.9 million to $22.4 million for the year ended December 31, 1997 as compared to the year ended December 31, 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 December 31, 1997 as compared to the year ended December 31, 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 December 31, 1996 and 1997, respectively. General and Administrative Expense --------------------------------- General and administrative expense increased from $4.7 million for the year ended December 31, 1996 to $6.5 million for the year ended December 31, 1997 primarily as a result of increased state and local taxes due to the growth in revenues and net income of the Company. Property advertising expense also increased as a result of the expanding size of the Company. Other Income (Expense) --------------------- Interest income increased from $1.2 million for the year ended December 31, 1996 to $2.2 million for the year ended December 31, 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 December 31, 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 December 31, 1997 was $66.0 million compared to $50.9 million for the year ended December 31, 1996. This increase results primarily from the increases in the operating results of rental and service operations explained above. - 19 - COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995 - ----------------------------------------------------------------------------- Rental Operations ---------------- The Company increased its in-service portfolio of rental properties from 201 properties comprising 20.1 million square feet at December 31, 1995 to 249 properties comprising 27.4 million square feet at December 31, 1996 through the acquisition of 34 properties totaling 3.4 million square feet and the placement in service of 16 properties and four building expansions totaling 4.1 million square feet developed by the Company. The Company also disposed of two properties totaling 182,000 square feet. These 48 net additional rental properties primarily account for the $48.5 million increase in revenues from Rental Operations from 1995 to 1996. The increase from 1995 to 1996 in rental expenses, real estate taxes and depreciation and amortization expense is also a result of the additional 48 in-service rental properties. Interest expense increased by approximately $9.9 million. This increase was primarily because of interest expense on the $150.0 million of unsecured notes which the Company issued in September 1995. These notes bear interest at an effective rate of 7.46% and were outstanding a full year in 1996 as compared to approximately three months in 1995. The Company also issued $90.0 million of unsecured debt under its medium-term note program in 1996 which bears interest at a weighted average rate of 7.20%. The proceeds from these debt issuances were used to fund development and acquisition of additional rental properties during 1995 and 1996. As a result of the above-mentioned items, earnings from Rental Operations increased $17.0 million from $37.3 million for the year ended December 31, 1995 to $54.3 million for the year ended December 31, 1996. Service Operations ------------------ Service Operations revenues increased from $17.8 million to $19.9 million for the year ended December 31, 1996 as compared to the year ended December 31, 1995 primarily as a result of increases in construction management fee revenue because of an increase in construction volume. Service Operations expenses increased from $11.2 million to $13.5 million for the year ended December 31, 1996 as compared to the year ended December 31, 1995 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 1995 and 1996. As a result of the above-mentioned items, earnings from Service Operations decreased from $6.6 million to $6.4 million for the years ended December 31, 1995 and 1996, respectively. General and Administrative Expense ---------------------------------- General and administrative expense increased from $3.5 million for the year ended December 31, 1995 to $4.7 million for the year ended December 31, 1996 primarily as a result of increased state and local taxes due to the growth in revenues and net income of the Company. Property advertising expense as well as certain public company expenses also increased as a result of the expanding size of the Company. Other Income (Expense) --------------------- Interest income decreased from $1.9 million for the year ended December 31, 1995 to $1.2 million for the year ended December 31, 1996 as a result of the temporary short-term investment of a greater amount of proceeds from the 1995 debt and equity offerings compared to proceeds generated by the 1996 debt and equity offerings. - 20 - During the year ended December 31, 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 December 31, 1996 was $50.9 million compared to $35.0 million for the year ended December 31, 1995. This increase results primarily from the changes in the operating result of rental and service operations explained above. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities totaling $159.2 million, $95.1 million and $78.6 million for the years ended December 31, 1997, 1996 and 1995, 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 $597.3 million, $276.7 million and $289.6 million for the years ended December 31, 1997, 1996 and 1995, 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. In 1997, $620.5 million was invested in the development and acquisition of additional rental properties and land held for development and $14.3 million was used for recurring building and tenant improvements and leasing costs. Included in the $620.5 million of development and acquisition of rental properties and land held for development for the year ended December 31, 1997 is $1.3 million related to the acquisition of 41 industrial and suburban office buildings totaling 3.2 million gross square feet in Minneapolis, Minnesota. The purchase price of these 41 buildings was approximately $144.7 million which included the assumption of $93.1 million of mortgage debt, the issuance of $48.5 million of units of partnership interest in the Company's operating partnership, and the assumption of approximately $1.8 million of accrued taxes and other liabilities. Also included in $620.5 million of development and acquisition of rental properties and land held for development for the year ended December 31, 1997 is $27.9 million related to the acquisition of 8 suburban office buildings and 3 industrial buildings totaling 982,000 gross square feet and land held for development in St. Louis, Missouri. The purchase price of these properties was approximately $147.7 million which included the assumption of $77.8 million of mortgage debt, the issuance of $40.8 million of units of partnership interest in the Company's operating partnership and the assumption of approximately $1.2 million of accrued taxes and other liabilities. Also in 1997, the Company sold six properties and several parcels of land and received $32.6 million of net sales proceeds. These proceeds were used to fund a portion of the 1997 development and acquisition activity. - 21 - In 1996, $328.4 million was invested in the development and acquisition of additional rental properties and land held for development and $9.9 million was used for recurring building and tenant improvements and leasing costs. In 1995, $250.3 million was invested in the development and acquisition of additional rental properties and land held for development and $8.6 million was used for recurring building and tenant improvements and leasing costs. Net cash provided by financing activities totaling $443.1 million, $181.2 million and $176.2 million for the years ended December 31, 1997, 1996 and 1995, respectively, is comprised of debt and equity issuances, net of distributions to shareholders and minority interests and repayments of outstanding indebtedness. In 1997, the Company received $299.1 million of net proceeds from common stock offerings which were used to pay down amounts outstanding on the unsecured line of credit and to fund acquisition and development of additional rental properties and land held for development. During 1997, the Company also received $18.4 million of net proceeds from the issuance of common stock under its Direct Stock Purchase and Dividend Reinvestment Plan. The Company used these net proceeds to fund the development and acquisition of additional rental properties. In July 1997, the Company received $146.1 million of net proceeds from a preferred stock offering. In August 1997, the Company issued $100.0 million of unsecured debt. This unsecured debt matures in July 2004 and bears interest at an effective interest rate of 7.35%. The Company used the net proceeds from the preferred stock and the 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 March 1996, the Company received $125.3 million of net proceeds from a common stock offering which was used to pay down amounts outstanding on the unsecured line of credit. During 1996, the Company also received $5.5 million of net proceeds from the issuance of common stock under its Direct Stock Purchase and Dividend Reinvestment Plan. The Company used these net proceeds to fund the development and acquisition of additional rental properties. In August 1996, the Company received $72.3 million of net proceeds from a preferred stock offering. In July 1996, the Company issued $40.0 million of unsecured debt under its medium-term note program. These notes mature in July 2000 and bear interest at 7.28%. In November 1996, the Company issued $50.0 million of unsecured debt under its medium-term note program. These notes mature in November 2004 and bear interest at 7.14%. The Company used the net proceeds from the preferred stock offering and the two medium-term note offerings to pay off approximately $82.5 million of existing secured debt which was scheduled to mature in the fourth quarter of 1996 or early in 1997 and the remainder to fund the development and acquisition of additional rental properties. In 1995, the Company received $96.3 million of net proceeds from a common stock offering and used the proceeds to fund development and acquisition of additional rental properties. In 1995, the Company also received $150.0 million from an unsecured debt offering and used the proceeds to retire outstanding mortgage indebtedness and to fund acquisition and development of additional rental properties. The recurring capital needs of the Company are funded primarily through the undistributed net cash provided by operating activities. An analysis of the Company's recurring capital expenditures is as follows (in thousands):
1997 1996 1995 ----- ---- ---- Tenant improvements $ 7,985 $6,048 $4,312 Leasing costs 5,057 3,032 3,519 Building improvements 1,211 780 757 ------ ----- ----- Total $14,253 $9,860 $8,588 ====== ===== =====
- 22 - The Company has a $200.0 million unsecured line of credit available to fund the development and acquisition of additional rental properties and to provide working capital as needed. This line of credit matures in April 2001 and bears interest at the 30-day London Interbank Offered Rate ("LIBOR") plus .80%. Borrowings of $13.0 million under this line of credit as of December 31, 1997 bear interest at an effective rate of 6.74%. The Company also has a demand $7.0 million secured line of credit which is available to provide working capital. This facility 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, 1997 and bear interest at an effective rate of 6.59%. The current 30-day LIBOR rate as of March 2, 1998 is 5.68%. The Company currently has on file two Form S-3 Registration Statements with the Securities and Exchange Commission (the "Shelf Registrations") which have remaining availability as of December 31, 1997 of $504.1 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 total debt outstanding at December 31, 1997 consists of notes totaling $720.1 million with a weighted average interest rate of 7.58% maturing at various dates through 2017. The Company has $353.0 million of unsecured debt and $367.1 million of secured debt outstanding at December 31, 1997. Scheduled principal amortization of such debt totaled $4.1 million for the year ended December 31, 1997. A summary of the scheduled future amortization and maturities of the Company's indebtedness is as follows (in thousands):
Repayments ------------------------------------- Weighted Average Scheduled Interest Rate of Year Amortization Maturities Total Future Repayments ---- ------------ ---------- ------- ----------------- 1998 $ 6,795 $ 47,714 $ 54,509 7.07% 1999 5,880 30,450 36,330 6.71% 2000 6,262 64,850 71,112 7.14% 2001 5,926 87,560 93,486 7.65% 2002 6,433 50,000 56,433 7.40% 2003 4,415 68,216 72,631 8.46% 2004 3,398 177,035 180,433 7.41% 2005 3,681 100,000 103,681 7.49% 2006 3,989 - 3,989 7.68% 2007 3,516 14,939 18,455 7.77% There- after 29,060 - 29,060 7.69% ------ ------- ------- Total $79,355 $640,764 $720,119 7.58% ====== ======= =======
The Company intends to pay regular quarterly dividends from net cash provided by operating activities. A quarterly dividend of $.30 per common share was declared on January 29, 1998 which represents an annualized dividend of $1.20 per share. YEAR 2000 The Company has reviewed the impact of Year 2000 issues and has determined that it is not expected to have a material impact on its business, operations or its financial condition. 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 - 23 - sales of property plus depreciation and amortization, and after adjustments for minority interest, unconsolidated partnerships and joint ventures (adjustments for minority interest, unconsolidated partnerships and joint ventures 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):
1997 1996 1995 ------- ------- ------- Net income available for common shares $ 65,999 $ 50,872 $ 35,019 Add back: Depreciation and amortization 44,806 31,363 23,118 Share of joint venture depreciation and amortization 3,017 1,890 411 Earnings from property sales (1,775) (4,532) (283) Minority interest share of add-backs (4,791) (3,514) (3,519) ------- ------ ------- FUNDS FROM OPERATIONS $107,256 $ 76,079 $ 54,746 ======= ====== ======= CASH FLOW PROVIDED BY (USED BY): Operating activities $ 159,195 $ 95,135 $ 78,620 Investing activities (597,324) (276,748) (289,569) Financing activities 443,148 181,220 176,243
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. 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 information required by this Item for Directors and certain Executive Officers will be contained in a definitive proxy statement which the Registrant anticipates will be filed no later than March 23, 1998, which proxy statement is incorporated herein by reference, and thus this part has been omitted in accordance with General Instruction G(3) to Form 10-K. The following information is provided regarding the executive officers of the Company who do not serve as Directors of the Company: - 24 - GARY A. BURK Age 46, President of Construction Services and Executive Vice President of Duke Services, Inc. - Mr. Burk joined the Company in 1979, and has been responsible for the Company's construction management operations since 1986. JOHN R. GASKIN Age 36, Vice President, General Counsel and Secretary - Mr. Gaskin joined the Company in 1990. Prior to joining the Company, Mr. Gaskin worked as an associate attorney in a mid-size Indianapolis, Indiana law firm. RICHARD W. HORN Age 40, Executive Vice President - Office - Mr. Horn joined the Company in 1984. Mr. Horn is responsible for all office activities of the Company and also oversees the Nashville and Michigan operations of the Company. WILLIAM E. LINVILLE, III Age 43, Executive Vice President - Industrial - Mr. Linville joined the Company in 1987 and is responsible for all industrial activities of the Company. Prior to that time, Mr. Linville was Vice President and Regional Manager of the CB Commercial Brokerage Office in Indianapolis. DAVID R. MENNEL Age 43, General Manager of Services Operations and President and Treasurer of Duke Services, Inc.- Mr. Mennel was with the accounting firm of Peat Marwick Mitchell & Co. and the property development firm of Melvin Simon & Associates before joining the Company in 1978. DENNIS D. OKLAK Age 44, Executive Vice President and Chief Administrative Officer - Mr. Oklak joined the Company in 1986 and has served as Treasurer, Tax Manager and Controller of Development. Prior to joining the Company, Mr. Oklak was a Senior Manager with the public accounting firm of Deloitte Haskins Sells. Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors, and persons who own more than 10% of the Company's Common Stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by Securities and Exchange Commission regulation to furnish the Company with copies of all Section 16(a) forms they file. Information regarding Section 16(a) filings will be contained in a definitive proxy statement which the Registrant anticipates will be filed no later than March 23, 1998, which proxy statement is incorporated herein by reference, and thus this part has been omitted in accordance with General Instruction G(3) to Form 10-K. ITEM 11, 12, 13 EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information required by Item 11, Item 12 and Item 13 will be contained in a definitive proxy statement which the Registrant anticipates will be filed no later than March 23, 1998, which proxy statement is incorporated herein by reference, and thus this part has been omitted in accordance with General Instruction G(3) to Form 10- K. - 25 - 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: Index Independent Auditors' Report Consolidated Balance Sheets, December 31, 1997 and 1996 Consolidated Statements of Operations, Years Ended December 31, 1997, 1996 and 1995 Consolidated Statements of Cash Flows, Years Ended December 31, 1997, 1996 and 1995 Consolidated Statements of Shareholders' Equity, Years Ended December 31, 1997, 1996 and 1995 Notes to Consolidated Financial Statements 2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES Index ----- Schedule III - Real Estate and Accumulated Depreciation EDGAR Financial Data Schedule ----------------------------- Exhibit 27 - Financial Data Schedule for year ended December 31, 1997 (EDGAR filing only) Other schedules are omitted for the reasons that they are not required, are not applicable, or the required information is set forth in the financial statements or notes thereto. - 26 - 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, 1997 and 1996, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1997, 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 Peat Marwick LLP Indianapolis, Indiana January 28, 1998 - 27 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
December 31, -------------------------- 1997 1996 ----------- --------- ASSETS ------ Real estate investments: Land and improvements $ 231,614 $ 140,391 Buildings and tenant improvements 1,591,604 1,041,040 Construction in progress 107,242 44,060 Investments in unconsolidated companies 106,450 79,362 Land held for development 139,817 65,185 --------- --------- 2,176,727 1,370,038 Accumulated depreciation (116,264) (82,207) --------- --------- Net real estate investments 2,060,463 1,287,831 Cash and cash equivalents 10,353 5,334 Accounts receivable, net of allowance of $420 and $709 5,932 5,260 Straight-line rent receivable, net of allowance of $841 14,746 10,956 Receivables on construction contracts 22,700 12,859 Deferred financing costs, net of accumulated amortization of $9,101 and $6,519 12,386 10,958 Deferred leasing and other costs, net of accumulated amortization of $9,251 and $5,249 34,369 21,573 Escrow deposits and other assets 15,265 6,371 --------- --------- $2,176,214 $1,361,142 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Indebtedness: Secured debt $ 367,119 $ 261,815 Unsecured notes 340,000 240,000 Unsecured line of credit 13,000 24,000 --------- --------- 720,119 525,815 Construction payables and amounts due subcontractors 40,786 23,167 Accounts payable 1,342 1,585 Accrued Expenses: Real estate taxes 25,203 14,888 Interest 6,883 4,437 Other 13,848 7,312 Other liabilities 11,720 8,312 Tenant security deposits and prepaid rents 14,268 7,611 --------- --------- Total liabilities 834,169 593,127 --------- --------- Minority interest 107,364 13,083 --------- --------- Shareholders' equity: Preferred shares and paid-in capital ($.01 par value); 5,000 shares authorized: 9.10% Series A, 300 shares issued and outstanding (liquidation preference of $75,000) 72,288 72,288 7.99% Series B, 300 shares issued and outstanding (liquidation preference of $150,000) 146,050 - Common shares and paid-in capital ($.01 par value); 150,000 shares authorized; 76,065 and 58,972 shares issued and outstanding 1,071,990 731,107 Distributions in excess of net income (55,647) (48,463) --------- --------- Total shareholders' equity 1,234,681 754,932 --------- --------- $2,176,214 $1,361,142 ========= =========
See accompanying Notes to Consolidated Financial Statements. - 28 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Year ended December 31, ----------------------------------- 1997 1996 1995 --------- -------- -------- RENTAL OPERATIONS: Revenues: Rental income $220,970 $156,392 $112,931 Equity in earnings of unconsolidated companies 8,732 5,768 710 ------- ------- ------- 229,702 162,160 113,641 ------- -------- ------- Operating expenses: Rental expenses 40,375 29,669 20,922 Real estate taxes 20,485 14,244 9,683 Interest expense 40,296 32,552 22,643 Depreciation and amortization 44,806 31,363 23,118 ------- ------- ------- 145,962 107,828 76,366 ------- ------- ------- Earnings from rental operations 83,740 54,332 37,275 ------- ------- ------- SERVICE OPERATIONS: Revenues: Property management, maintenance and leasing fees 12,799 11,496 11,138 Construction management and development fees 8,646 6,895 5,582 Other income 933 1,538 1,057 ------- ------- ------- 22,378 19,929 17,777 ------- ------- ------- Operating expenses: Payroll 10,761 9,176 7,606 Maintenance 2,009 1,526 1,344 Office and other 2,455 2,791 2,258 ------- ------- ------- 15,225 13,493 11,208 ------- ------- ------- Earnings from service operations 7,153 6,436 6,569 ------- ------- ------- General and administrative expense (6,530) (4,719) (3,536) ------- ------- ------- Operating income 84,363 56,049 40,308 OTHER INCOME (EXPENSE): Interest income 2,174 1,194 1,900 Earnings from property sales 1,775 4,532 283 Other expense (1,083) (174) (31) Minority interest in earnings of unitholders (7,574) (7,184) (6,530) Other minority interest in earnings of subsidiaries (1,171) (986) (911) ------- ------- ------- Net income 78,484 53,431 35,019 Dividends on preferred shares (12,485) (2,559) - ------- ------- ------- Net income available for common shares $ 65,999 $ 50,872 $ 35,019 ======= ======= ======= Net income per common share: Basic $ .99 $ .91 $ .77 ======= ======= ======= Diluted $ .98 $ .90 $ .77 ======= ======= ======= Weighted average number of common shares outstanding 66,427 56,134 45,358 ======= ======= ======= Weighted average number of common and dilutive potential common shares 74,993 64,398 53,802 ======= ======= =======
See accompanying Notes to Consolidated Financial Statements. - 29 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Year ended December 31, ------------------------------------- 1997 1996 1995 --------- -------- -------- Cash flows from operating activities: Net income $ 78,484 $ 53,431 $ 35,019 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of buildings and tenant improvements 39,771 27,568 20,416 Deferred financing costs 2,545 2,132 2,138 Amortization of deferred leasing and other costs 4,170 2,871 1,783 Minority interest in earnings 8,745 8,170 7,441 Straight-line rent adjustment (4,469) (3,536) (3,198) Earnings from property sales (1,775) (4,532) (283) Construction contracts, net 7,778 (1,640) 8,722 Other accrued revenues and expenses, net 29,481 12,620 6,771 Equity in earnings in excess of operating distributions received from unconsolidated companies (5,535) (1,949) (189) ------- ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 159,195 95,135 78,620 ------- ------- ------- Cash flows from investing activities: Rental property development costs (195,088) (130,300) (128,879) Acquisition of real estate investments (324,203) (182,024) (83,047) Acquisition of land held for development and infrastructure costs (101,220) (16,122) (38,361) Recurring tenant improvements (7,985) (6,048) (4,312) Recurring leasing costs (5,057) (3,032) (3,519) Recurring building improvements (1,211) (780) (757) Other deferred leasing costs (14,000) (7,308) (9,773) Other deferred costs and other assets (8,894) 7,069 (6,452) Proceeds from property sales, net 32,560 50,844 5,281 Distributions received from unconsolidated companies 60,000 12,423 - Net investment in and advances to unconsolidated companies (32,226) (1,470) (19,750) ------- ------- ------- NET CASH USED BY INVESTING ACTIVITIES (597,324) (276,748) (289,569) Cash flows from financing activities: Proceeds from issuance of common shares, net 321,239 130,799 96,297 Proceeds from issuance of preferred shares, net 146,050 72,288 - Proceeds from indebtedness 100,000 142,200 150,051 Payments on indebtedness including principal amortization (9,999) (84,677) (60,030) Borrowings (repayments) on lines of credit, net (14,000) (11,000) 45,000 Distributions to common shareholders (73,183) (56,163) (42,838) Distributions to preferred shareholders (12,485) (1,991) - Distributions to minority interest (10,184) (8,719) (8,940) Deferred financing costs (4,290) (1,517) (3,297) ------- ------- ------- NET CASH PROVIDED BY FINANCING ACTIVITIES 443,148 181,220 176,243 ------- ------- -------- NET INCREASE (DECREASE) IN CASH 5,019 (393) (34,706) Cash and cash equivalents at beginning of year 5,334 5,727 40,433 ------- ------- ------- Cash and cash equivalents at end of year $ 10,353 $ 5,334 $ 5,727 ======= ======= =======
See accompanying Notes to Consolidated Financial Statements. - 30 - 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, 1994 - $ 481,305 $(35,921) $ 445,384 Issuance of common shares, net of underwriting discounts and related costs of $5,767 - 96,428 - 96,428 Acquisition of minority interest - 796 - 796 Net income - - 35,019 35,019 Distributions to common shareholders ($.96 per share) - - (42,838) (42,838) ------- --------- --------- --------- BALANCE AT DECEMBER 31, 1995 - 578,529 (43,740) 534,789 Issuance of common shares, net of underwriting discounts and related costs of $7,299 - 130,951 - 130,951 Issuance of preferred shares, net of underwriting 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 underwriting discounts and related costs of $16,920 - 321,437 - 321,437 Issuance of preferred shares, net of underwriting 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 ======= ========= ======= =========
See accompanying Notes to Consolidated Financial Statements. - 31 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (1) THE COMPANY ------------- The Company was formed in 1985 and qualifies as a real estate investment trust ("REIT") under the provisions of the Internal Revenue Code. The Company is a self-administered REIT which 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's rental operations are conducted through Duke Realty Limited Partnership ("DRLP"), of which the Company owns 87.4% at December 31, 1997. 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. In addition, the Company conducts 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 1996 and 1995 balances have been reclassified to conform with the 1997 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. SEGMENT OPERATIONS ----------------- The Company is engaged in two business segments, the ownership and rental of real estate investments ("Rental Operations") and the providing of various real estate services such as property management, maintenance, leasing and construction management to third-party property owners ("Service Operations"). There are no material intersegment sales or transfers between Rental Operations and Service Operations. The identifiable assets of the Service Operations consisting of cash, accounts receivable, construction receivables and other assets as of December 31, 1997 and 1996 were $37.4 million and $20.7 million, respectively. Capital expenditures related to Service Operations were $4.8 - 32 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements million, $2.0 million and $1.5 million for the years ended December 31, 1997, 1996, and 1995, respectively. All remaining assets, capital expenditures, depreciation, amortization and investments in and advances to unconsolidated companies relate to Rental Operations. The operations of each segment are reflected separately on the Statement of Operations. 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 years, 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 acquisition, development, construction or expansion of real estate investments are capitalized as a cost of the property and depreciated over the estimated useful life of the related asset. 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 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. 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 on the straight-line method over the term of the related loan. All direct and indirect costs associated with the rental of real estate projects 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 for financial reporting purposes on a straight-line basis. - 33 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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 the project costs are incurred. Other income consists primarily of payroll reimbursements for on-site property management services. 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:
1997 1996 1995 ----- ----- ----- Basic net income available for common shares $65,999 $50,872 $35,019 Minority interest in earnings of unitholders 7,574 7,184 6,530 ------ ------ ------ Diluted net income available for common shares and dilutive potential shares $73,573 $58,056 $41,549 ====== ====== ====== Weighted average number of common shares outstanding 66,427 56,134 45,358 Weighted average partnership units outstanding 7,715 7,826 8,224 Dilutive shares for long-term compensation plans 851 438 220 ------ ------ ------ Weighted average number of common shares and dilutive potential common shares 74,993 64,398 53,802 ====== ====== ======
FEDERAL INCOME TAXES ------------------ The Company qualifies and intends to continue to qualify as a REIT under the Internal Revenue Code. As a REIT, the Company is allowed to reduce taxable income by all or a portion of its distributions to 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 net income reported for financial reporting purposes primarily because of different depreciable lives and bases of rental properties and differences in the timing of recognition of earnings upon disposition of properties. - 34 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements A summary of the taxable nature of the Company's dividends for the three years ended December 31 is as follows:
1997 1996 1995 ----- ----- ----- Total dividends per share $1.10 $1.00 $ .96 ==== ==== ==== Percent taxable as ordinary income 100.00% 99.10% 85.51% Percent taxable as long-term capital gains - - .82% Percent non-taxable as return of capital - .90% 13.67% ------- ------- ------- 100.00% 100.00% 100.00% ======= ======= =======
Dividends per share of $.97, $.89 and $.74 were required for the Company to maintain its REIT status in 1997, 1996 and 1995, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS ----------------------------------- The fair values of the Company's financial instruments, including accounts receivable, accounts payable, accrued expenses, mortgage debt, unsecured notes payable, lines of credit and other financial instruments, generally determined using the present value of estimated future cash flows using a discount rate commensurate with the risks involved, approximate their carrying or contract values. 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. DERIVATIVE FINANCIAL INSTRUMENTS -------------------------------- The Company may enter 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. The Company has designated these derivative financial instruments as hedges and applies deferral accounting as the instrument to be hedged exposes the Company to interest rate risk and the derivative financial instrument reduces that exposure. Gains and losses related to the derivative financial instrument are deferred and amortized to interest expense over the term of the hedged instrument. (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 $3.3 million, $3.2 million and $2.8 million for such services in 1997, 1996 and 1995, 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. - 35 - (4) Acquisitions of Real Estate Property Investments ------------------------------------------------- In October 1997, the Company acquired a 982,000 square foot suburban office and industrial portfolio and undeveloped land from and the operating personnel of an independent real estate developer and operator in St. Louis, Missouri. The purchase price of this portfolio was approximately $147.7 million which included the assumption of $77.8 million of mortgage debt, the issuance of $40.8 million of Limited Partner Units, the assumption of approximately $1.2 million of accrued taxes and other liabilities, and $27.9 million of cash. Also in October 1997, the Company acquired a 3.2 million square foot industrial and suburban office portfolio and the operating personnel from an independent real estate developer and operator in Minneapolis, Minnesota. The purchase price of this portfolio was approximately $144.7 million which included the assumption of $93.1 million of mortgage debt, the issuance of $48.5 million of Limited Partner Units, the assumption of approximately $1.8 million of accrued taxes and other liabilities, and $1.3 million of cash. (5) Investments in Unconsolidated Companies --------------------------------------- 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. The cost method of accounting is used for non-majority owned joint ventures over which the Company does not have the ability to exercise significant influence. The difference between the cost method and the equity method for such ventures does not significantly affect the financial position or results of operations of the Company. In 1995, the Company acquired its unaffiliated partner's 50% interest in a joint venture which owned two suburban office rental properties (one of which was under construction as of December 31, 1995) and 40.3 acres of land held for development. The Company accounted for the acquisition of the 50% interest using the purchase method with its recorded investment in the properties equal to the sum of the balance of its investment in and advances to the joint venture at the date of acquisition, the net liabilities assumed and cash paid to the joint venture partner amounting to $24.4 million. On December 28, 1995, the Company formed a joint venture (Dugan Realty LLC) with an institutional real estate investor and purchased 25 industrial buildings totaling approximately 2.3 million square feet. Upon formation of the venture, the Company contributed approximately 1.4 million square feet of recently developed and acquired industrial properties, 113 acres of recently acquired land held for future development at an agreed value of $50.8 million, and approximately $16.7 million of cash for a 50.1% interest in the joint venture. The Company's recorded investment at December 31, 1995 in the joint venture of $59.4 million is the sum of the carrying value of the properties, land and cash contributed. The Company's joint venture partner contributed cash of $67.5 million for its 49.9% interest in the venture. The cash contributed by the Company and the joint venture partner was used to purchase the 25 industrial buildings noted above. The recently acquired industrial properties and the undeveloped land which were contributed were acquired as part of the acquisition of Park Fletcher, Inc., - 36 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements an Indianapolis, Indiana based real estate development and management company. The acquisition was accounted for under the purchase method. The recorded carrying value of the acquired properties and land was equal to the net liabilities assumed plus cash paid plus mortgage indebtedness assumed of $17.4 million. The fair value of the property exceeds the Company's recorded investment. The operating results of the acquired properties and land have been included in the consolidated operating results subsequent to the date of acquisition. The Company completed the development of 1.1 million square feet of property in 1996 and contributed these properties to the joint venture at an agreed value of $24.9 million. The Company recorded its investment in the joint venture related to this additional contribution at its carrying value of $20.5 million. The joint venture partner contributed cash of $12.4 million to the venture, which equaled 49.9% of the agreed value of the properties contributed. The cash was distributed to the Company and reduced its recorded investment in the venture. During 1997, the Company contributed an additional six buildings totaling two million square feet with an agreed value of $60.8 million and received a cash distribution of $60 million from the proceeds of a mortgage loan received in May of 1997. The joint venture partner contributed $753,000 of cash to the venture to maintain proportionate ownership interest. The Company accounts for its investment in this joint venture on the equity method because the joint venture partner's approval is required for all major decisions, and the joint venture partner has equal control regarding the primary day-to-day operations of the venture. In May 1997, the Company formed a joint venture (Dugan/Office, LLC) with an institutional real estate investor, to which each venture partner contributed $32.2 million in cash for a 50% ownership interest. Simultaneously, the contributed cash was used to purchase office property consisting of approximately 345,000 square feet and 17 acres of undeveloped land. Combined summarized financial information of the companies which are accounted for by the equity method as of December 31, 1997 and December 31, 1996 and for the years ended December 31, 1997, 1996, and 1995 are as follows (in thousands):
1997 1996 --------- -------- Land, buildings and tenant improvements, net $322,799 $181,337 Land held for development 14,261 7,975 Other assets 10,707 7,874 ------- ------- $347,767 $197,186 ======= ======= Property indebtedness $ 94,982 $ 25,285 Other liabilities 12,866 6,457 ------- ------- 107,848 31,742 Owners' equity 239,919 165,444 ------- ------- $347,767 $197,186 ======= =======
1997 1996 1995 -------- -------- -------- Rental income $29,709 $21,880 $3,398 ====== ====== ===== Net income $12,481 $ 9,761 $ 363 ====== ====== =====
- 37 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Investments in unconsolidated companies include $6.1 million at December 31, 1997 and 1996 related to joint ventures accounted for on the cost method. Included in equity in earnings of unconsolidated companies are distributions from a joint venture accounted for on the cost method totaling $947,000, $735,000 and $521,000 in 1997, 1996 and 1995, respectively. (6) INDEBTEDNESS ------------
Indebtedness at December 31 consists of the following (in thousands): 1997 1996 --------- ---------- Mortgage note with monthly payments of $668 including principal and interest at 8.50% due in 2003 $ 75,882 $ 77,381 Mortgage note with monthly payments of interest of $436 through August 1997. Thereafter, monthly payments of $471 including principal and interest at 8.72% due in 2001 59,824 60,000 Mortgage note with monthly payments at 30-day LIBOR + .75% with monthly principal payments ranging from $63 to $165 due in 1999 31,950 32,700 Mortgage note with monthly payments of interest at 7.25% due in 1998 25,500 25,500 Mortgage note with monthly payments of interest at LIBOR + .80% due in 2000 20,000 - Mortgage note with monthly payments of $165 including principal and interest at 8.19% due in 2017 19,097 19,500 Mortgage note with monthly payments of $104 including principal and interest at 6.80% due in 1998 15,214 15,423 Mortgage notes with monthly payments in varying amounts including interest at rates ranging from 4.89% to 10.25% due in varying amounts through 2017 30,424 21,311 Mortgage notes from the same lender with monthly payments in varying amounts including interest at rates ranging from 7.87% to 8.70% due in varying amounts through 2012 49,534 - Mortgage notes from the same lender with monthly payments in varying amounts including interest at rates ranging from 7.63% to 7.96% due in varying amounts through 2012 32,694 - Demand secured line of credit with monthly payments of interest at 30-day LIBOR + .65% 7,000 10,000 -------- ------- Total secured debt 367,119 261,815 -------- ------- Unsecured notes with semi-annual payments of interest at 7.28% due in 2000 40,000 40,000 Unsecured notes with semi-annual payments of interest at 7.25% (effective rate of 7.33%) due in 2002 50,000 50,000 Unsecured notes with semi-annual payments of interest at 7.14% due in 2004 50,000 50,000 Unsecured notes with semi-annual payments of interest at 7.37% (effective rate of 7.52%) due in 2005 100,000 100,000 - 38 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (6)INDEBTEDNESS (CON'T) 1997 1996 -------- -------- Unsecured notes with semi-annual payments of interest at 6.95% (effective rate of 7.35%) due 2004 $100,000 $ - Unsecured line of credit with monthly payments of interest at 30-day LIBOR + .80% due in 2001 13,000 24,000 ------- ------- Total unsecured debt 353,000 264,000 ------- ------- Total indebtedness $720,119 $525,815 ======= =======
As of December 31, 1997, the $367.1 million of secured debt is collateralized by rental properties with a net carrying value of $641.9 million. In April 1995, the Company obtained an unsecured line of credit in the aggregate amount of $100 million which required interest at 30- day LIBOR plus 2.00% (effective rate of 7.69% as of December 31, 1995). In 1996, the Company increased the amount available under the line to $150 million and reduced the borrowing rate to LIBOR plus 1.25% (effective rate of 6.75% as of December 31, 1996). In 1997, the Company increased the amount available under the line to $200 million and reduced the borrowing rate to LIBOR plus .80% (effective rate of 6.74% as of December 31, 1997). The unsecured line of credit matures in April 2001. The Company has an interest rate swap agreement (the "Agreement") on $33.0 million of the Company's outstanding mortgage debt to effectively fix the interest rate on a portion of its floating rate debt. Under the Agreement, the Company pays or receives the difference between a fixed rate of 5.19% and a floating rate of 30- day LIBOR plus 75% based on the notional principal amount of $33.0 million. The amount paid or received under the Agreement is included in interest expense on a monthly basis. The Agreement matures along with the related mortgage loan in December 1999. The Agreement will stay in place until maturity unless the 30-day LIBOR rate on the date of monthly repricing exceeds 6.25% which will cause a termination of the Agreement. The 30-day LIBOR rate at December 31, 1997 was 5.94%. The estimated fair value of the Agreement at December 31, 1997 was $428,000. The fair value was estimated by discounting the expected cash flows to be received under the Agreement using rates currently available for interest rate swaps of similar terms and maturities. The Company has a $75.0 million ("Notional Principal") forward Treasury Lock Agreement (the "Treasury Lock") which is intended to fix the effective interest rate of future financings by the Company. Under the Treasury Lock, the Company will pay or receive the difference between a fixed rate of 5.86% and the ten year treasury rate as of February 26, 1998 (the "Determination Date"). The ten year treasury rate at December 31, 1997 was 5.74%. The estimated fair value of the Treasury Lock at December 31, 1997 was ($672,000). The fair value was estimated by multiplying the $75.0 million Notional Principal times the present value of the December 31, 1997 rate difference based upon semi-annual corresponding periods over a ten year term. - 39 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements At December 31, 1997, scheduled amortization and maturities of all indebtedness for the next five years and thereafter are as follows (in thousands):
Year Amount ---- --------- 1998 $ 54,509 1999 36,330 2000 71,112 2001 93,486 2002 56,433 Thereafter 408,249 -------- $720,119 =======
Cash paid for interest in 1997, 1996, and 1995 was $41.9 million, $35.5 million, and $22.1 million, respectively. Total interest capitalized in 1997, 1996 and 1995 was $6.0 million, $5.5 million and $4.2 million, respectively. (7) LEASING ACTIVITY ---------------- Future minimum rents due to the Company under non-cancelable operating leases at December 31, 1997 are scheduled as follows (in thousands):
Year Amount ---- -------- 1998 $ 236,190 1999 219,555 2000 190,997 2001 162,266 2002 131,676 Thereafter 582,769 --------- $1,523,453 =========
In addition to minimum rents, certain leases require reimbursements of specified operating expenses which amounted to $33.8 million, $19.7 million, and $12.7 million for the years ended December 31, 1997, 1996 and 1995, 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 two percent of the employees' salary and may also make annual discretionary contributions. Total expense recognized by the Company was $882,000, $328,000 and $245,000 for the years ended 1997, 1996 and 1995, 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 $1,245,000, $1,193,000 and $882,000 for 1997, 1996 and 1995, 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. - 40 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (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. A summary of the public equity issuances during the three-year period ended December 31, 1997 is as follows (in thousands, except per share price):
Offering Price Shares Issued Per Share Net Proceeds ------------- ---------- ------------ Common Stock ---------- 1995 Offering 7,456 $ 13.69 $ 96,273 1996 Offering 8,800 15.06 125,251 1997 Offering 3,000 20.00 56,725 1997 Offering 10,542 21.44 214,004 1997 Offering 926 21.50 18,894 1997 Offering 449 22.25 9,525 Preferred Stock --------------- 1996 9.10% Dividend Rate 300 $250.00 $ 72,288 1997 7.99% Dividend Rate 300 $500.00 $146,050
During the three years ended December 31, 1997, the Company acquired a portion of the minority interest in DRLP through the issuance of shares of common stock for a like number of Limited Partner Units. The acquisition of the minority interest was 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. The following acquisition amounts were allocated to rental property, undeveloped land and investments in unconsolidated companies based on their estimated fair values (in thousands):
Common Shares Minority Issued Interest Acquired ------ ----------------- 1995 56 $ 796 1996 1,506 21,627 1997 971 19,446
In August 1996, the Company issued 300,000 shares of 9.10% Series A Cumulative Redeemable Preferred Shares receiving net proceeds of approximately $72.3 million. On or after August 31, 2001, the Series A Preferred Shares may be redeemed for cash at the option of the Company, in whole or in part at a redemption price of $250.00 per share plus accrued and unpaid distributions, if any, to the redemption date. The redemption price of the Series A Preferred Shares (other than any portion thereof consisting of accrued and unpaid distributions) 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 Series A Preferred Shares have no stated maturity, are not subject to sinking fund or mandatory redemption provisions and are not convertible into any other securities of the Company. Distributions on the Series A Preferred Shares are cumulative from the date of original issue and are payable quarterly on or about - 41 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements the last day of February, May, August and November of each year, commencing on December 2, 1996, at the rate of 9.10% of the liquidation preference per annum (equivalent to $22.75 per annum per share). In July 1997, the Company issued 300,000 shares of 7.99% Series B Cumulative Step-Up Premium Rate Preferred Shares ("Series B Preferred Shares") receiving net proceeds of approximately $146.1 million. On or after September 30, 2007, the Series B Preferred Shares may be redeemed for cash at the option of the Company, in whole or in part at a redemption price of $500.00 per share plus accrued and unpaid distributions, if any, to the redemption date. The redemption price of the Series B Preferred Shares (other than any portion thereof consisting of accrued and unpaid distributions) 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 Series B Preferred Shares have no stated maturity, are not subject to sinking fund or mandatory redemption provisions and are not convertible into any other securities of the Company. Distributions on the Series B Preferred Shares are cumulative from the date of original issue and are payable quarterly on or about the last day of March, June, September, and December of each year, commencing on September 30, 1997, at the rate of 7.99% of the liquidation preference per annum (equivalent to $39.95 per annum per share) through September 30, 2012 and at a rate of 9.99% of the liquidation preference per annum (equivalent to $49.95 per annum per share) thereafter. (10) STOCK BASED COMPENSATION ------------------------- The Company has four stock-based compensation plans, which are described below. 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. 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:
1997 1996 1995 ---- ---- ---- Net income As reported $65,999 $50,872 $35,019 Pro forma 65,825 50,723 34,963 Basic net income As reported .99 .91 .77 per share Pro forma .99 .91 .77 Diluted net income As reported .98 .90 .77 per share Pro forma .98 .90 .77
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. - 42 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements FIXED STOCK OPTION PLANS The Company has two fixed stock options plans, the Duke Realty Services 1993 Stock Option Plan (the "1993 Plan") and the 1995 Key Employees' Stock Option Plan of Duke Realty Investments, Inc. (the "1995 Plan"). Under the 1995 Plan, the Company is authorized to grant options to its employees for up to 1,116,800 shares of common stock, as well as up to an additional 800,000 shares to the extent grants under the 1993 Plan lapse, are forfeited or are otherwise terminated. The 1995 Plan was adopted in 1995 subject to shareholder approval, which approval was received in 1996. Under the 1993 Plan, the Company was authorized to grant options to its employees for up to 2,630,000 shares of common stock, of which 1,178,700 are outstanding as of December 31, 1997. No further grants are permitted under the 1993 Plan. Under both plans, the exercise price of each option equals the market price of the Company's stock on the date of grant, and each option's maximum term is ten years. 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. The fair value of each option for all grants is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used: Dividend yield of 5.8% for 1997 grants and 6.0% for 1996 and 1995 grants; expected volatility of 19% for all grants; weighted average risk-free interest rates of 6.4%, 5.6% and 6.8% for 1997, 1996 and 1995 grants, respectively; and weighted average expected lives of 6.5 years, 7.9 years, 7.8 years for 1997, 1996 and 1995 grants, respectively. A summary of the status of the Company's two fixed stock option plans as of December 31, 1997, 1996 and 1995, and changes during the years ended on those dates is as follows:
1997 1996 1995 --------------------- ------------------- ------------------- Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price ------- -------- ------- -------- -------- -------- Outstanding, beginning of year 1,947,642 $12.89 1,732,138 $12.48 1,363,000 $11.87 Granted 346,008 20.09 246,914 16.06 450,938 14.21 Exercised (319,169) 11.98 (200) 12.94 (2,000) 11.87 Forfeited (47,101) 15.74 (31,210) 15.34 (79,800) 11.94 --------- --------- --------- Outstanding, end of year 1,927,380 14.26 1,947,642 12.89 1,732,138 12.48 ========= ========= ========= Options exercisable, end of year 927,312 864,657 524,400 ======= ======= ======= Weighted-average fair value of options granted during the year $ 2.81 $ 1.96 $ 2.06 ====== ====== ======
The following table summarizes information about fixed stock options outstanding at December 31, 1997:
Options Outstanding Options Exercisable ---------------------------------- ----------------------------- Weighted Number Average Weighted Weighted Range Outstanding Remaining Average Number Average of Exercise at Contractual Exercise Exercisable Exercise Prices 12/31/97 Life Price at 12/31/97 Price - ----------- ----------- ----------- -------- ----------- ------------- $11.00-$12.00 967,500 5.76 $11.87 723,100 $11.87 $12.00-$17.00 625,698 7.67 14.83 204,212 14.54 $18.00-$23.00 330,682 9.23 20.08 0 N/A $23.00-$25.00 3,500 9.84 23.06 0 N/A - ------------- --------- ------- $11.00-$25.00 1,927,380 6.98 14.26 927,312 12.46 ========= =======
- 43 - DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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 200,000 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. The compensation cost that has been charged against income for the DIU Plan was $1,474,000, $152,000 and $30,000 for 1997, 1996 and 1995, respectively. A summary of the status of DIUs granted by the Company is as follows:
1997 1996 1995 ------- ------- ------- DIUs outstanding, beginning of year 445,282 220,938 - Granted 346,008 246,914 220,938 Forfeited (34,101) (22,570) - ------- ------- ------- DIUs outstanding, end of year 757,189 445,282 220,938 ======= ======= ======= DIUs exercisable, end of year 126,681 - - ======= ======= =======
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 following table summarizes information about the initial amount of SV Plan awards granted in 1997, 1996 and 1995:
1997 1996 1995 ------- ------- ------- Amount of SVP initial awards, beginning of year $ 925,578 $456,080 $ - Granted 616,900 521,165 456,080 Forfeited (177,750) (51,667) - --------- ------- ------- Amount of SVP initial awards, end of year $1,364,728 $925,578 $456,080 ========= ======= =======
The Company believes that it is not possible to reasonably estimate the fair value of the common stock to be issued under the DIU and SV Plans and, therefore, computes compensation cost for the 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 the SV Plan was $1,041,000, and $361,000 and $152,000 for 1997, 1996 and 1995, respectively. - 44 - 3. EXHIBITS EXHIBIT NUMBER DESCRIPTION -------- ----------- 3.1 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. 3.3 Amendment dated June 12, 1997 to Articles of Incorporation of Registrant. 3.4 Amendment dated July 11, 1997 to Articles of Incorporation of Registrant. 3.5 By-Laws of Registrant are incorporated herein by reference to Exhibit 3.2 to the 1995 Registration Statement. 3.6 Amendment dated October 23, 1997 to By-laws of Registrant. 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. 4.2 Indenture between Duke Realty Limited Partnership and The First National Bank of Chicago, Trustee, and the First Supplement thereto, are incorporated herein by reference to Exhibits 4.1 and 4.2 to the report of the Registrant on Form 8-K filed September 19, 1995 and the Second Supplement thereto, is incorporated herein by reference to Exhibit 4 to the report of the Registrant on Form 8-K filed July 12, 1996. 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. 10.3 Fourth Amendment dated July 11, 1997 to Amended and Restated Agreement of Operating Partnership of the Registrant 10.4 Second Amended and Restated Agreement of Limited Partnership of Duke Realty Services Limited Partnership (the "Services Partnership") are incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K for the year ended December 31, 1995. 10.5 Promissory Note of the Services Partnership is incorporated herein by reference to Exhibit 10.3 to the 1993 Registration Statement. - 45 - 10.6 Duke Realty Services Limited Partnership 1993 Stock Option Plan is incorporated herein by reference to Exhibit 10.4 to the 1993 Registration Statement. 10.7 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. 10.8 Management Agreement relating to the Excluded Properties is incorporated herein by reference to Exhibit 10.6 to the 1993 Registration Statement. 10.9 Indemnification Agreement is incorporated herein by reference to Exhibit 10.11 to the 1993 Registration Statement. 10.10 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. 10.11 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. 10.12 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. 21. List of Subsidiaries of Registrant. 23. Consent of KPMG Peat Marwick, LLP 24. Executed powers of attorney of certain directors. 27. Financial Data Schedule 99.1 Selected Quarterly Financial Information - 46 - 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 Report on Form 8-K dated November 10, 1997 including Item 7 and Balance Sheet and Statement of Operations. Report on Form 8-K dated December 22, 1997 including Item 7. - 47 - DUKE REALTY INVESTMENTS, INC. REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1997
BUILDING ENCUMBER- LOCATION / DEVELOPMENT BUILDING TYPE ANCES ---------------------- --------- -------- --------- INDIANAPOLIS, INDIANA --------------------- PARK 100 BUSINESS PARK BUILDING #32 RETAIL $ - PARK 100 BUSINESS PARK BUILDING #34 OFFICE - PARK 100 BUSINESS PARK BUILDING #38 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #79 INDUSTRIAL 1,075 PARK 100 BUSINESS PARK BUILDING #80 INDUSTRIAL 1,320 PARK 100 BUSINESS PARK BUILDING #83 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #84 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #95 INDUSTRIAL 3,187 PARK 100 BUSINESS PARK BUILDING #96 INDUSTRIAL 8,222 PARK 100 BUSINESS PARK BUILDING #97 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #98 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #100 INDUSTRIAL 1,554 PARK 100 BUSINESS PARK BUILDING #107 INDUSTRIAL 1,560 PARK 100 BUSINESS PARK BUILDING #109 INDUSTRIAL 1,059 PARK 100 BUSINESS PARK BUILDING #116 OFFICE - PARK 100 BUSINESS PARK BUILDING #118 OFFICE 1,215 PARK 100 BUSINESS PARK BUILDING #119 OFFICE - PARK 100 BUSINESS PARK BUILDING #121 RETAIL - PARK 100 BUSINESS PARK BUILDING #122 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #125 INDUSTRIAL 3,627 PARK 100 BUSINESS PARK BUILDING #126 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #127 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #128 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #129 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #130 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #131 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #132 INDUSTRIAL - PARK 100 BUSINESS PARK BUILDING #133 INDUSTRIAL - GEORGETOWN ROAD BUILDING 1 INDUSTRIAL - GEORGETOWN ROAD BUILDING 2 INDUSTRIAL - GEORGETOWN ROAD BUILDING 3 INDUSTRIAL - PARK 100 BUSINESS PARK UPS LAND LEASE LAND LEASE - PARK 100 BUSINESS PARK NORGATE LAND LEASE LAND LEASE - PARK 100 BUSINESS PARK KENNY ROGERS LAND LEASE LAND LEASE - PARK 100 BUSINESS PARK SCHAHET HOTELS LAND LEASE LAND LEASE - PARK 100 BUSINESS PARK NORCO LAND LEASE LAND LEASE - PARK 100 BUSINESS PARK ZOLLMAN LAND LEASE LAND LEASE - SHADELAND STATION 7351 SHADELAND OFFICE - SHADELAND STATION BLDG #204/205 INDUSTRIAL 1,796 SHADELAND STATION 7240 SHADELAND OFFICE 2,578 SHADELAND STATION 7330 SHADELAND OFFICE 2,245 SHADELAND STATION 7369 SHADELAND OFFICE - SHADELAND STATION 7340 SHADELAND OFFICE 1,401 SHADELAND STATION 7400 SHADELAND OFFICE 1,956 CASTLETON CORNER CUB PLAZA RETAIL - CASTLETON SHOPPING CTR. MICHAEL'S PLAZA RETAIL 2,360 SOUTH PARK, INDIANA BUILDING #1 OFFICE 1,506 SOUTH PARK, INDIANA BUILDING #2 INDUSTRIAL 2,138 SOUTH PARK, INDIANA BUILDING #3 OFFICE 1,015 SOUTH PARK, INDIANA BRYLANE PARKING LOT LEASE OFFICE - GREENWOOD CORNER GREENWOOD CORNER RETAIL - GREENWOOD CORNER 1st INDIANA BANK BRANCH RETAIL 252 ST. FRANCIS ST. FRANCIS MEDICAL - COMMUNITY MOB COMMUNITY MOB MEDICAL - HILLSDALE TECHNECENTER BUILDING #4 INDUSTRIAL 2,588 HILLSDALE TECHNECENTER BUILDING #5 INDUSTRIAL 1,704 HILLSDALE TECHNECENTER BUILDING #6 INDUSTRIAL 2,094 KEYSTONE AT THE CROSSING 8465 KEYSTONE OFFICE - WOODFIELD AT THE CROSSING WOODFIELD II OFFICE - WOODFIELD AT THE CROSSING WOODFIELD III OFFICE - KEYSTONE AT THE CROSSING 8555 KATC OFFICE - KEYSTONE AT THE CROSSING 3520 COMMERCE CRSG OFFICE - ONE PARKWOOD ONE PARKWOOD OFFICE - TWO PARKWOOD TWO PARKWOOD OFFICE - THREE PARKWOOD THREE PARKWOOD OFFICE - PALOMAR PALOMAR INDUSTRIAL - FRANKLIN ROAD BUS. CTR. FRANKLIN ROAD BUS. CTR. INDUSTRIAL - NAMPAC BUILDING NAMPAC BUILDING INDUSTRIAL - HAMILTON CROSSING BUILDING #1 INDUSTRIAL - HAMILTON CROSSING BUILDING #2 INDUSTRIAL - KEYSTONE AT THE CROSSING F.C. TUCKER BLDG. OFFICE - PARK FLETCHER BUILDING #14 INDUSTRIAL - - 48 - 6060 GUION ROAD (VANSTAR) 6060 GUION ROAD (VANSTAR) INDUSTRIAL - NORTH AIRPORT PARK BUILDING #2 INDUSTRIAL - 4750 KENTUCKY AVENUE 4750 KENTUCKY AVENUE INDUSTRIAL - 4316 WEST MINNESOTA 4316 WEST MINNESOTA INDUSTRIAL - FORT WAYNE, INDIANA ------------------ COLDWATER CROSSING COLDWATER SHOPPES RETAIL 10,740 LEBANON, INDIANA ---------------- AMERICAN AIR FILTER AMERICAN AIR FILTER INDUSTRIAL - PURITY WHOLESALE PURITY WHOLESALE INDUSTRIAL - PAMIDA PAMIDA INDUSTRIAL - NASHVILLE, TENNESSEE ------------------- KEEBLER BUILDING KEEBLER BUILDING INDUSTRIAL - HAYWOOD OAKS TECHNECENTER BUILDING #2 INDUSTRIAL 1,055 HAYWOOD OAKS TECHNECENTER BUILDING #3 INDUSTRIAL 1,011 HAYWOOD OAKS TECHNECENTER BUILDING #4 INDUSTRIAL 1,175 HAYWOOD OAKS TECHNECENTER BUILDING #5 INDUSTRIAL 1,765 HAYWOOD OAKS TECHNECENTER BUILDING #6 INDUSTRIAL - HAYWOOD OAKS TECHNECENTER BUILDING #7 INDUSTRIAL - HAYWOOD OAKS TECHNECENTER BUILDING #8 INDUSTRIAL - GREENBRIAR BUSINESS PARK GREENBRIAR INDUSTRIAL - HEBRON, KENTUCKY ---------------- SOUTHPARK, KENTUCKY CR SERVICES INDUSTRIAL 2,866 SOUTHPARK, KENTUCKY BUILDING #1 INDUSTRIAL - SOUTHPARK, KENTUCKY BUILDING #3 INDUSTRIAL - SOUTHPARK, KENTUCKY REDKEN INDUSTRIAL 2,257 FLORENCE, KENTUCKY ------------------ EMPIRE COMMERCE EMPIRE COMMERCE INDUSTRIAL - SOFA EXPRESS SOFA EXPRESS RETAIL - CINCINNATI, OHIO --------------- PARK 50 TECHNECENTER BUILDING #17 OFFICE - PARK 50 TECHNECENTER BUILDING #20 INDUSTRIAL 3,903 PARK 50 TECHNECENTER BUILDING #25 INDUSTRIAL - PARK 50 TECHNECENTER SDRC BUILDING OFFICE - FIDELITY DRIVE DUN & BRADSTREET OFFICE 1,633 WORLD PARK BUILDING #5 INDUSTRIAL 2,144 WORLD PARK BUILDING #6 INDUSTRIAL 2,158 WORLD PARK BUILDING #7 INDUSTRIAL 2,600 WORLD PARK BUILDING #8 INDUSTRIAL 2,842 WORLD PARK BUILDING #9 INDUSTRIAL 1,656 WORLD PARK BUILDING #11 INDUSTRIAL 2,533 WORLD PARK BUILDING #14 INDUSTRIAL 1,928 WORLD PARK BUILDING #15 INDUSTRIAL - WORLD PARK BUILDING #16 INDUSTRIAL 1,539 WORLD PARK BUILDING #18 (BEIERSDORF) INDUSTRIAL - EASTGATE PLAZA EASTGATE PLAZA RETAIL - FAIRFIELD BUS.CTR. BUILDING D INDUSTRIAL - FAIRFIELD BUS.CTR. BUILDING E INDUSTRIAL - UNIVERSITY MOVING UNIVERSITY MOVING INDUSTRIAL - TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 OFFICE - GOVERNOR'S PLAZA GOVERNOR'S PLAZA RETAIL - GOVERNOR'S PLAZA KING'S MALL II RETAIL - GOVERNOR'S PLAZA KOHLS RETAIL - SOFA EXPRESS SOFA EXPRESS RETAIL - - 49 - OFFICE MAX OFFICE MAX RETAIL - 312 ELM BUILDING 312 ELM OFFICE 31,950 311 ELM STREET ZUSSMAN OFFICE - ENTERPRISE BUS. PARK BUILDING 1 INDUSTRIAL 4,071 ENTERPRISE BUS. PARK BUILDING 2 INDUSTRIAL 2,995 ENTERPRISE BUS. PARK BUILDING A INDUSTRIAL 433 ENTERPRISE BUS. PARK BUILDING B INDUSTRIAL 668 ENTERPRISE BUS. PARK BUILDING D INDUSTRIAL 1,316 312 PLUM STREET S & L DATA OFFICE - TRIANGLE OFFICE PARK BUILDINGS #1 - #38 OFFICE 4,865 GOVERNOR'S HILL 8790 GOVERNOR'S HILL OFFICE - GOVERNOR'S HILL 8700 GOVERNOR'S HILL OFFICE - GOVERNOR'S HILL 8800 GOVERNOR'S HILL OFFICE 1,558 GOVERNOR'S HILL 8600 GOVERNOR'S HILL OFFICE 15,214 GOVERNOR'S POINTE 4770 GOVERNOR'S PTE. OFFICE 4,441 GOVERNOR'S POINTE 4700 BUILDING INDUSTRIAL 3,363 GOVERNOR'S POINTE 4900 BUILDING INDUSTRIAL 2,744 GOVERNOR'S POINTE 4705 GOVERNOR'S PTE. OFFICE - GOVERNOR'S POINTE 4800 GOVERNOR'S PTE. OFFICE - GOVERNOR'S POINTE LOWES RETAIL - GOVERNOR'S POINTE ANTHEM PRESCRIPTION MGMT. OFFICE - GOVERNOR'S POINTE 4660 GOVERNOR'S PTE OFFICE - BIGG'S SUPERCENTER BIGG'S SUPERCENTER RETAIL - GOVERNOR'S POINTE 4605 GOVERNOR'S PTE OFFICE 10,442 MONTGOMERY CROSSING STEINBERG'S RETAIL - MONTGOMERY CROSSING II SPORTS UNLIMITED RETAIL 2,601 GOVERNOR'S PLAZA KING'S AUTO MALL I RETAIL 3,050 MOSTELLER DIST. CTR. MOSTELLER DIST. CTR. INDUSTRIAL - MOSTELLER DIST. CTR. MOSTELLER DIST. CTR. II INDUSTRIAL - FRANCISCAN HEALTH FRANCISCAN HEALTH MEDICAL - PERIMETER PARK BUILDING A INDUSTRIAL - PERIMETER PARK BUILDING B INDUSTRIAL - CREEK ROAD BUILDING 1 INDUSTRIAL - CREEK ROAD BUILDING 2 INDUSTRIAL - WEST LAKE CENTER WEST LAKE CENTER OFFICE - EXECUTIVE PLAZA I EXECUTIVE PLAZA I OFFICE - EXECUTIVE PLAZA II EXECUTIVE PLAZA II OFFICE - LAKE FOREST PLACE LAKE FOREST PLACE OFFICE - HUNTINGTON BANK HUNTINGTON BANK OFFICE - OHIO NATIONAL OHIO NATIONAL OFFICE 19,097 CORNELL COMMERCE CORNELL COMMERCE INDUSTRIAL - ONE ASHVIEW PLACE ONE ASHVIEW PLACE OFFICE - REMINGTON PARK BLDG A OFFICE - REMINGTON PARK BLDG B OFFICE - BLUE ASH OFFICE CTR VI BLUE ASH OFFICE CTR VI OFFICE - SKYPORT BUSINESS PARK SKYPORT BUILDING 1 INDUSTRIAL - APPLEBEES APPLEBEES LAND LEASE - 7910 KENTUCKY DRIVE 7910 KENTUCKY DR. INDUSTRIAL - 7920 KENTUCKY DRIVE 7920 KENTUCKY DR. INDUSTRIAL - KENWOOD EXEC. CENTER KENWOOD EXEC. CTR. OFFICE - CLEVELAND, OHIO ---------------- ROCK RUN - NORTH ROCK RUN-NORTH OFFICE 3,283 ROCK RUN - CENTER ROCK RUN - CENTER OFFICE 4,063 ROCK RUN - SOUTH ROCK RUN - SOUTH OFFICE 3,441 FREEDOM SQUARE I FREEDOM SQUARE I OFFICE - FREEDOM SQUARE II FREEDOM SQUARE II OFFICE 6,878 CORPORATE PLAZA I CORPORATE PLAZA I OFFICE 8,372 CORPORATE PLAZA II CORPORATE PLAZA II OFFICE 7,155 ONE CORPORATE EXCHANGE ONE CORPORATE EXCH. OFFICE 5,089 FREEDOM SQUARE III FREEDOM SQUARE III OFFICE - 6111 OAK TREE 6111 OAK TREE OFFICE - CORPORATE PLACE CORPORATE PLACE OFFICE - CORPORATE CIRCLE CORPORATE CIRCLE OFFICE - LANDERBROOK CORPORATE LANDERBROOK CORP. OFFICE - DYMENT DYMENT INDUSTRIAL - JOHNSON CONTROLS JOHNSON CONTROLS INDUSTRIAL - SOLON INDUSTRIAL PARK 30600 CARTER INDUSTRIAL - SOLON INDUSTRIAL PARK 6230 COCHRAN INDUSTRIAL - SOLON INDUSTRIAL PARK 31900 SOLON- FRONT INDUSTRIAL - SOLON INDUSTRIAL PARK 5821 SOLON INDUSTRIAL - SOLON INDUSTRIAL PARK 6161 COCHRAN INDUSTRIAL - SOLON INDUSTRIAL PARK 5901 HARPER INDUSTRIAL - - 50 - SOLON INDUSTRIAL PARK 29125 SOLON INDUSTRIAL - SOLON INDUSTRIAL PARK 6661 COCHRAN INDUSTRIAL - SOLON INDUSTRIAL PARK 6521 DAVIS INDUSTRIAL - SOLON INDUSTRIAL PARK 31900 SOLON-REAR INDUSTRIAL - CORPORATE CENTER I CORPORATE CTR I OFFICE - CORPORATE CENTER II CORPORATE CTR II OFFICE - COLUMBUS, OHIO -------------- CORP. PARK AT TUTTLE CRSG LITEL OFFICE - CORP. PARK AT TUTTLE CRSG STERLING 1 OFFICE - CORP. PARK AT TUTTLE CRSG INDIANA INSURANCE OFFICE - CORP. PARK AT TUTTLE CRSG STERLING 2 OFFICE - CORP. PARK AT TUTTLE CRSG JOHN ALDEN LIFE INS. OFFICE - CORP. PARK AT TUTTLE CRSG CARDINAL HEALTH OFFICE - CORP. PARK AT TUTTLE CRSG COMPMANAGEMENT OFFICE - CORP. PARK AT TUTTLE CRSG STERLING 3 OFFICE - CORP. PARK AT TUTTLE CRSG NATIONWIDE OFFICE - CORP. PARK AT TUTTLE CRSG LAZARUS GRND LEASE RETAIL - CORP. PARK AT TUTTLE CRSG XEROX OFFICE - SUN TV SUN TV INDUSTRIAL - SOUTH POINTE BUILDING D INDUSTRIAL - SOUTH POINTE BUILDING E INDUSTRIAL - PET FOODS BUILD-TO-SUIT PET FOODS DIST. INDUSTRIAL 3,352 GALYAN'S GALYAN'S RETAIL 3,011 TUTTLE RETAIL CENTER TUTTLE RETAIL CTR. RETAIL - MBM BUILDING MBM BUILDING INDUSTRIAL - METROCENTER III METROCENTER III OFFICE - SCIOTO CORPORATE CENTER SCIOTO CORP.CTR. OFFICE - V.A. HOSPITAL V.A. HOSPITAL MEDICAL 5,804 PARKWOOD PLACE PARKWOOD PLACE OFFICE - TUTTLE CROSSING UNO'S LAND LEASE - DAYTON, OHIO ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA RETAIL - CHICAGO, ILLINOIS ----------------- EXECUTIVE TOWERS I EXECUTIVE TOWERS I OFFICE - EXECUTIVE TOWERS II EXECUTIVE TOWERS II OFFICE - EXECUTIVE TOWERS III EXECUTIVE TOWERS III OFFICE - DECATUR, ILLINOIS ----------------- PARK 101 BUILDING #3 INDUSTRIAL - PARK 101 BUILDING #8 INDUSTRIAL - PARK 101 ILL POWER LAND LEASE INDUSTRIAL - BLOOMINGTON, ILLINOIS --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA RETAIL - CHAMPAIGN, ILLINOIS ------------------- MARKET VIEW SHOPPING CTR MARKET VIEW CTR. RETAIL - ST. LOUIS, MISSOURI ------------------- LAUMEIER I LAUMEIER I OFFICE - LAUMEIER II LAUMEIER II OFFICE - WESTVIEW PLACE WESTVIEW PLACE OFFICE - WESTMARK WESTMARK OFFICE - ALFA - LAVAL ALFA - LAVAL INDUSTRIAL - I-70 CENTER I-70 CENTER INDUSTRIAL - 1920 BELTWAY 1920 BELTWAY INDUSTRIAL - POINT 70 3322 NGIC OFFICE 6,938 POINT 70 3300 POINTE 70 OFFICE 4,460 RIVERPORT TOWER RIVERPORT TOWER OFFICE - SCRIPTS BUILDING SCRIPTS BUILDING INDUSTRIAL - RIVERPORT DISTRIBUTION RIVERPORT DIST. INDUSTRIAL - - 51 - SCHULTZ BUILDING SCHULTZ BUILDING INDUSTRIAL - MARYVILLE CENTER 500 MARYVILLE CENTER OFFICE 15,382 MARYVILLE CENTER 530 MARYVILLE CENTER OFFICE 8,521 MARYVILLE CENTER 550 MARYVILLE CENTER OFFICE 10,500 MARYVILLE CENTER 635 MARYVILLE CENTER OFFICE 12,926 MARYVILLE CENTER 655 MARYVILLE CENTER OFFICE 9,612 MARYVILLE CENTER 540 MARYVILLE CENTER OFFICE 20,000 TWIN OAKS TWIN OAKS OFFICE - SOUTHPORT I SOUTHPORT I INDUSTRIAL - SOUTHPORT II SOUTHPORT II INDUSTRIAL - SOUTHPORT COMMERCE CTR SOUTHPORT COMMERCE CTR. INDUSTRIAL - MINNEAPOLIS, MINNESOTA ---------------------- ENTERPRISE INDUST. CTR. ENTERPRISE INDUST. CTR. INDUSTRIAL 2,792 APOLLO DISTRIBUTION CTR. APOLLO DIST.CTR. INDUSTRIAL - SIBLEY INDUST. CTR. I SIBLEY INDUST. CTR. I INDUSTRIAL - SIBLEY INDUST. CTR. II SIBLEY INDUST. CTR. II INDUSTRIAL - SIBLEY INDUST. CTR. III SIBLEY INDUST. CTR. III INDUSTRIAL - YANKEE PLACE YANKEE PLACE INDUSTRIAL - LARC INDUST. PARK I LARC INDUST. PARK I INDUSTRIAL - LARC INDUST. PARK II LARC INDUST. PARK II INDUSTRIAL - LARC INDUST. PARK III LARC INDUST. PARK III INDUSTRIAL - LARC INDUST. PARK IV LARC INDUST. PARK IV INDUSTRIAL - LARC INDUST. PARK V LARC INDUST. PARK V INDUSTRIAL - LARC INDUST. PARK VI LARC INDUST. PARK VI INDUSTRIAL - LARC INDUST. PARK VII LARC INDUST. PARK VII INDUSTRIAL - HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST. CTR. N. INDUSTRIAL 2,969 HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. INDUSTRIAL 3,454 PENN CORPORATE BUILDING PENN CORP. BLDG. INDUSTRIAL - BLOOMINGTON INDUST. CTR. BLOOMINGTON INDUST. CTR. INDUSTRIAL 2,066 EDINA INTERCHANGE I EDINA INTERCHANGE I INDUSTRIAL 2,135 EDINA INTERCHANGE II EDINA INTERCHANGE II INDUSTRIAL 1,465 EDINA INTERCHANGE III EDINA INTERCHANGE III INDUSTRIAL 1,652 EDINA INTERCHAGE IV EDINA INTERCHAGE IV INDUSTRIAL - EDINA INTERCHANGE V EDINA INTERCHANGE V INDUSTRIAL - PAKWA BUS. PARK I PAKWA BUS.PARK I INDUSTRIAL - PAKWA BUS. PARK II PAKWA BUS.PARK II INDUSTRIAL - PAKWA BUS. PARK III PAKWA BUS.PARK III INDUSTRIAL - 7540 BUSH LAKE ROAD 7540 BUSH LAKE ROAD INDUSTRIAL - CAHILL BUS. CTR. CAHILL BUS. CTR. INDUSTRIAL - 10801 RED CIRCLE DRIVE 10801 RED CIRCLE DRIVE OFFICE - ENCORE PARK ENCORE PARK INDUSTRIAL - JOHNSON BUILDING JOHNSON BUILDING INDUSTRIAL - CORNERSTONE BUS. CTR CORNERSTONE BUS. CTR INDUSTRIAL 6,856 WESTSIDE BUS. PARK WESTSIDE BUS. PARK INDUSTRIAL - KNOX LAND LEASE KNOX LAND LEASE LAND LEASE - OXFORD INDUSTRIAL OXFORD INDUST. INDUSTRIAL - CEDAR LAKE BUS.CTR. CEDAR LAKE BUS.CTR. INDUSTRIAL - MEDICINE LAKE INDUST.CTR. MEDICINE LAKE INDUST.CTR. INDUSTRIAL 4,763 MEDICINE LAKE PROF BLDG. MEDICINE LAKE PROF BLDG. OFFICE - 801 ZANE AVE NORTH 801 ZANE AVE. NORTH INDUSTRIAL - DECATUR BUSINESS CTR. DECATUR BUSINESS CTR. INDUSTRIAL - SANDBURG INDUSTRIAL CTR. SANDBURG INDUSTRIAL CTR. INDUSTRIAL - CRYSTAL INDUSTRIAL CTR. CRYSTAL INDUST. CTR. INDUSTRIAL - BASS LAKE BUSINESS CTR. BASS LAKE BUSINESS CTR. INDUSTRIAL 1,115 UNIVERSITY LAND LEASE UNIVERSITY LAND LEASE LAND LEASE - ELIMINATIONS - ------- TOTALS $367,119 ======= - 52 - INITIAL COST TO COMPANY COSTS (1) ------------------------- CAPITALIZED BLDGS/ SUBSEQUENT TO LOCATION/ DEVELOPMENT BUILDING LAND IMPROVEMENTS ACQUISITION ---------------------- -------- ------- ------------ ------------- INDIANAPOLIS, INDIANA --------------------- PARK 100 BUSINESS PARK BUILDING #32 64 740 234 PARK 100 BUSINESS PARK BUILDING #34 131 1,455 261 PARK 100 BUSINESS PARK BUILDING #38 25 241 26 PARK 100 BUSINESS PARK BUILDING #79 184 1,764 409 PARK 100 BUSINESS PARK BUILDING #80 251 2,412 231 PARK 100 BUSINESS PARK BUILDING #83 247 2,572 213 PARK 100 BUSINESS PARK BUILDING #84 347 2,604 242 PARK 100 BUSINESS PARK BUILDING #95 642 4,756 323 PARK 100 BUSINESS PARK BUILDING #96 1,414 8,734 4,613 PARK 100 BUSINESS PARK BUILDING #97 676 4,294 1,350 PARK 100 BUSINESS PARK BUILDING #98 473 6,022 1,956 PARK 100 BUSINESS PARK BUILDING #100 103 2,179 730 PARK 100 BUSINESS PARK BUILDING #107 99 1,575 138 PARK 100 BUSINESS PARK BUILDING #109 240 1,865 (52) PARK 100 BUSINESS PARK BUILDING #116 341 3,144 39 PARK 100 BUSINESS PARK BUILDING #118 226 2,229 209 PARK 100 BUSINESS PARK BUILDING #119 388 3,386 367 PARK 100 BUSINESS PARK BUILDING #121 592 960 143 PARK 100 BUSINESS PARK BUILDING #122 284 3,359 426 PARK 100 BUSINESS PARK BUILDING #125 674 5,712 126 PARK 100 BUSINESS PARK BUILDING #126 165 1,362 168 PARK 100 BUSINESS PARK BUILDING #127 96 1,726 419 PARK 100 BUSINESS PARK BUILDING #128 904 8,429 228 PARK 100 BUSINESS PARK BUILDING #129 865 5,468 577 PARK 100 BUSINESS PARK BUILDING #130 514 4,027 - PARK 100 BUSINESS PARK BUILDING #131 1,006 7,015 735 PARK 100 BUSINESS PARK BUILDING #132 446 1,165 380 PARK 100 BUSINESS PARK BUILDING #133 - 987 37 GEORGETOWN ROAD BUILDING 1 362 2,437 - GEORGETOWN ROAD BUILDING 2 374 2,588 - GEORGETOWN ROAD BUILDING 3 421 1,960 - PARK 100 BUSINESS PARK UPS LAND LEASE - - 270 PARK 100 BUSINESS PARK NORGATE LAND LEASE 51 - - PARK 100 BUSINESS PARK KENNY ROGERS LAND LEASE 56 - 9 PARK 100 BUSINESS PARK SCHAHET HOTELS LAND LEASE 131 - (131) PARK 100 BUSINESS PARK NORCO LAND LEASE - 38 (1) PARK 100 BUSINESS PARK ZOLLMAN LAND LEASE 115 - - SHADELAND STATION 7351 SHADELAND 101 1,359 200 SHADELAND STATION BUILDING #204/205 260 2,595 627 SHADELAND STATION 7240 SHADELAND 152 3,113 859 SHADELAND STATION 7330 SHADELAND 255 4,045 52 SHADELAND STATION 7369 SHADELAND 100 1,129 103 SHADELAND STATION 7340 SHADELAND 165 2,458 217 SHADELAND STATION 7400 SHADELAND 570 2,959 435 CASTLETON CORNER CUB PLAZA 540 4,850 300 CASTLETON SHOPPING CTR. MICHAEL'S PLAZA 749 3,400 388 SOUTH PARK, INDIANA BUILDING #1 287 2,328 438 SOUTH PARK, INDIANA BUILDING #2 334 3,081 919 SOUTH PARK, INDIANA BUILDING #3 208 2,150 472 SOUTH PARK, INDIANA BRYLANE PKG. LOT LEASE - 54 3 GREENWOOD CORNER GREENWOOD CORNER 390 3,435 144 GREENWOOD CORNER 1st INDIANA BANK BRANCH 46 245 22 ST. FRANCIS ST. FRANCIS - 5,839 612 COMMUNITY MOB COMMUNITY MOB 350 1,925 941 HILLSDALE TECHNECENTER BUILDING #4 366 4,711 597 HILLSDALE TECHNECENTER BUILDING #5 251 3,235 250 HILLSDALE TECHNECENTER BUILDING #6 315 4,054 222 KEYSTONE AT THE CROSSING 8465 KEYSTONE 89 1,302 55 WOODFIELD AT THE CROSSING WOODFIELD II 719 9,106 908 WOODFIELD AT THE CROSSING WOODFIELD III 3,767 19,817 2,725 KEYSTONE AT THE CROSSING 8555 KATC - 5,857 93 KEYSTONE AT THE CROSSING 3520 COMMERCE CRSG 19 560 73 ONE PARKWOOD ONE PARKWOOD 1,018 9,578 524 TWO PARKWOOD TWO PARKWOOD 861 5,134 2,316 THREE PARKWOOD THREE PARKWOOD 1,316 6,048 2,102 PALOMAR PALOMAR 158 1,148 394 FRANKLIN RD.BUS. CTR. FRANKLIN RD. BUS. CTR. 594 3,986 2,310 NAMPAC BUILDING NAMPAC BUILDING 274 1,622 142 HAMILTON CROSSING BUILDING #1 526 2,424 396 HAMILTON CROSSING BUILDING #2 313 1,315 630 KEYSTONE AT THE CROSSING F.C. TUCKER BUILDING - 264 17 PARK FLETCHER BUILDING #14 76 722 98 - 48 - 6060 GUION RD. (VANSTAR) 6060 GUION ROAD (VANSTAR) 511 2,656 131 NORTH AIRPORT PARK BUILDING #2 550 5,470 2,170 4750 KENTUCKY AVE. 4750 KENTUCKY AVE. 246 2,260 214 4316 W. MINNESOTA 4316 W. MINNESOTA 287 2,178 295 FORT WAYNE, INDIANA ------------------- COLDWATER CROSSING COLDWATER SHOPPES 2,310 15,827 1,146 LEBANON, INDIANA ---------------- AMERICAN AIR FILTER AMERICAN AIR FILTER 177 3,053 70 PURITY WHOLESALE PURITY WHOLESALE 269 7,361 1,209 PAMIDA PAMIDA 177 3,625 590 NASHVILLE, TENNESSEE -------------------- KEEBLER BUILDING KEEBLER BUILDING 307 1,183 74 HAYWOOD OAKS TECHNECENTER BUILDING #2 395 1,767 152 HAYWOOD OAKS TECHNECENTER BUILDING #3 346 1,575 295 HAYWOOD OAKS TECHNECENTER BUILDING #4 435 1,948 194 HAYWOOD OAKS TECHNECENTER BUILDING #5 629 2,816 424 HAYWOOD OAKS TECHNECENTER BUILDING #6 924 5,730 648 HAYWOOD OAKS TECHNECENTER BUILDING #7 456 1,642 734 HAYWOOD OAKS TECHNECENTER BUILDING #8 617 2,225 1,341 GREENBRIAR BUSINESS PARK GREENBRIAR 1,445 4,490 762 HEBRON, KENTUCKY ----------------- SOUTHPARK, KENTUCKY CR SERVICES 1,085 4,060 - SOUTHPARK, KENTUCKY BUILDING #1 682 3,725 379 SOUTHPARK, KENTUCKY BUILDING #3 841 3,382 312 SOUTHPARK, KENTUCKY REDKEN 779 3,095 178 FLORENCE, KENTUCKY ------------------ EMPIRE COMMERCE EMPIRE COMMERCE 581 2,784 337 SOFA EXPRESS SOFA EXPRESS 145 718 914 CINCINNATI, OHIO ---------------- PARK 50 TECHNECENTER BUILDING #17 500 6,200 (344) PARK 50 TECHNECENTER BUILDING #20 461 7,450 (346) PARK 50 TECHNECENTER BUILDING #25 1,161 3,758 948 PARK 50 TECHNECENTER SDRC BUILDING 911 19,004 1,400 FIDELITY DRIVE DUN & BRADSTREET 270 2,510 384 WORLD PARK BUILDING #5 270 3,260 627 WORLD PARK BUILDING #6 378 4,488 (684) WORLD PARK BUILDING #7 525 4,150 364 WORLD PARK BUILDING #8 561 5,309 360 WORLD PARK BUILDING #9 317 2,993 321 WORLD PARK BUILDING #11 460 4,701 390 WORLD PARK BUILDING #14 380 3,592 255 WORLD PARK BUILDING #15 373 2,274 354 WORLD PARK BUILDING #16 321 3,033 21 WORLD PARK BUILDING #18 (BEIERSDORF) 834 6,000 (633) EASTGATE PLAZA EASTGATE PLAZA 2,030 4,079 909 FAIRFIELD BUSINESS CTR. BUILDING D 135 1,639 71 FAIRFIELD BUSINESS CTR. BUILDING E 398 2,461 136 UNIVERSITY MOVING UNIVERSITY MOVING 248 1,612 98 TRI-COUNTY OFFICE PARK BUILDINGS #1-#4 217 5,211 747 GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,012 8,452 740 GOVERNOR'S PLAZA KING'S MALL II 1,928 3,636 573 GOVERNOR'S PLAZA KOHLS 1,345 3,575 256 SOFA EXPRESS SOFA EXPRESS 145 771 36 - 49 - OFFICE MAX OFFICE MAX 651 1,223 98 312 ELM BUILDING 312 ELM 4,750 43,823 6,179 311 ELM STREET ZUSSMAN 339 6,226 611 ENTERPRISE BUSINESS PARK BUILDING 1 1,030 5,482 797 ENTERPRISE BUSINESS PARK BUILDING 2 733 3,443 1,202 ENTERPRISE BUSINESS PARK BUILDING A 119 685 49 ENTERPRISE BUSINESS PARK BUILDING B 119 1,117 80 ENTERPRISE BUSINESS PARK BUILDING D 243 1,802 550 312 PLUM STREET S & L DATA 2,539 24,312 2,573 TRIANGLE OFFICE PARK BUILDINGS #1 - #38 1,000 10,440 2,119 GOVERNOR'S HILL 8790 GOVERNOR'S HILL 400 4,581 475 GOVERNOR'S HILL 8700 GOVERNOR'S HILL 459 5,705 240 GOVERNOR'S HILL 8800 GOVERNOR'S HILL 225 2,305 490 GOVERNOR'S HILL 8600 GOVERNOR'S HILL 1,220 17,689 1,860 GOVERNOR'S POINTE 4770 GOVERNOR'S POINTE 586 7,609 412 GOVERNOR'S POINTE 4700 BUILDING 584 5,465 470 GOVERNOR'S POINTE 4900 BUILDING 654 4,017 648 GOVERNOR'S POINTE 4705 GOVERNOR'S POINTE 719 6,910 2,157 GOVERNOR'S POINTE 4800 GOVERNOR'S POINTE 978 4,742 978 GOVERNOR'S POINTE LOWES 1,241 4,214 1,789 GOVERNOR'S POINTE ANTHEM PRESCRIPTION MGMT. 594 4,100 1,996 GOVERNOR'S POINTE 4660 GOVERNOR'S POINTE 385 3,662 1,264 BIGG'S SUPERCENTER BIGG'S SUPERCENTER 2,107 4,545 3,091 GOVERNOR'S POINTE 4605 GOVERNOR'S POINTE 630 16,236 1,882 MONTGOMERY CROSSING STEINBERG'S 260 852 140 MONTGOMERY CROSSING II SPORTS UNLIMITED 778 3,687 205 GOVERNOR'S PLAZA KING'S AUTO MALL I 1,085 3,859 967 MOSTELLER DIST. CTR. MOSTELLER DIST. CTR. 1,220 4,209 2,634 MOSTELLER DIST. CTR. MOSTELLER DIST. CTR. II 408 4,550 1,003 FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,248 - PERIMETER PARK BUILDING A 229 1,274 43 PERIMETER PARK BUILDING B 244 1,001 45 CREEK ROAD BUILDING 1 103 792 55 CREEK ROAD BUILDING 2 132 1,093 61 WEST LAKE CTR. WEST LAKE CTR. 2,459 15,972 998 EXECUTIVE PLAZA I EXECUTIVE PLAZA I 729 5,249 - EXECUTIVE PLAZA II EXECUTIVE PLAZA II 729 5,332 - LAKE FOREST PLACE LAKE FOREST PLACE 1,953 19,164 284 HUNTINGTON BANK HUNTINGTON BANK 175 220 9 OHIO NATIONAL OHIO NATIONAL 2,463 24,408 341 CORNELL COMMERCE CORNELL COMMERCE 495 4,501 316 ONE ASHVIEW PLACE ONE ASHVIEW PL. 1,204 12,328 175 REMINGTON PARK BLDG A 560 1,442 27 REMINGTON PARK BLDG B 560 1,442 23 BLUE ASH OFFICE CTR VI BLUE ASH OFFICE CTR VI 518 2,775 35 SKYPORT BUSINESS PARK SKYPORT BLDG.1 611 5,661 535 APPLEBEES APPLEBEES 338 - - 7910 KENTUCKY DRIVE 7910 KENTUCKY DR. 285 673 76 7920 KENTUCKY DRIVE 7920 KENTUCKY DR. 698 1,235 15 KENWOOD EXEC. CTR. KENWOOD EXEC. CTR. 606 3,886 - CLEVELAND, OHIO --------------- ROCK RUN - NORTH ROCK RUN - N. 837 5,351 175 ROCK RUN - CTR. ROCK RUN - CTR. 1,046 6,686 143 ROCK RUN - SOUTH ROCK RUN - S. 877 5,604 189 FREEDOM SQUARE I FREEDOM SQ. I 595 3,796 96 FREEDOM SQUARE II FREEDOM SQ. II 1,746 11,141 445 CORPORATE PLAZA I CORPORATE PLAZA I 2,116 13,528 583 CORPORATE PLAZA II CORPORATE PLAZA II 1,841 11,768 260 ONE CORPORATE EXCHANGE ONE CORPORATE EXCHANGE 1,287 8,226 352 FREEDOM SQUARE III FREEDOM SQ. III 701 5,027 1,168 6111 OAK TREE 6111 OAK TREE 703 4,492 80 CORPORATE PLACE CORPORATE PLACE 1,161 7,425 320 CORPORATE CIRCLE CORPORATE CIRCLE 1,696 10,846 606 LANDERBROOK CORPORATE LANDERBROOK CORPORATE 1,807 7,445 2,062 DYMENT DYMENT 817 5,234 58 JOHNSON CONTROLS JOHNSON CONTROLS 364 2,330 26 SOLON INDUSTRIAL PARK 30600 CARTER 819 3,286 38 SOLON INDUSTRIAL PARK 6230 COCHRAN 600 2,408 31 SOLON INDUSTRIAL PARK 31900 SOLON-FRONT 473 1,897 22 SOLON INDUSTRIAL PARK 5821 SOLON 554 2,222 30 SOLON INDUSTRIAL PARK 6161 COCHRAN 395 1,583 25 SOLON INDUSTRIAL PARK 5901 HARPER 349 1,399 19 - 50 - SOLON INDUSTRIAL PARK 29125 SOLON 504 2,023 27 SOLON INDUSTRIAL PARK 6661 COCHRAN 244 981 14 SOLON INDUSTRIAL PARK 6521 DAVIS 128 514 6 SOLON INDUSTRIAL PARK 31900 SOLON-REAR 81 325 4 CORPORATE CTR. I CORPORATE CTR. I 1,048 6,695 441 CORPORATE CTR. II CORPORATE CTR. II 1,048 6,712 852 COLUMBUS, OHIO -------------- CORP. PARK AT TUTTLE CRSG LITEL 2,618 17,428 1,555 CORP. PARK AT TUTTLE CRSG STERLING 1 1,494 11,856 927 CORP. PARK AT TUTTLE CRSG INDIANA INS. 717 2,081 1,079 CORP. PARK AT TUTTLE CRSG STERLING 2 605 5,300 389 CORP. PARK AT TUTTLE CRSG JOHN ALDEN LIFE INS. 1,066 6,856 432 CORP. PARK AT TUTTLE CRSG CARDINAL HEALTH 1,600 9,556 1,442 CORP. PARK AT TUTTLE CRSG COMPMANAGEMENT 867 2,860 1,507 CORP. PARK AT TUTTLE CRSG STERLING 3 1,601 8,207 228 CORP. PARK AT TUTTLE CRSG NATIONWIDE 4,815 18,554 (285) CORP. PARK AT TUTTLE CRSG LAZARUS GROUND LEASE 852 - - CORP. PARK AT TUTTLE CRSG XEROX 1,580 8,630 490 SUN TV SUN TV 2,005 17,468 215 SOUTH POINTE BUILDING D 276 2,485 502 SOUTH POINTE BUILDING E 279 2,046 - PET FOODS BUILD-TO-SUIT PET FOODS DIST. 268 4,932 1,296 GALYAN'S GALYAN'S 1,925 3,146 335 TUTTLE RETAIL CTR. TUTTLE RETAIL CTR. 2,625 6,598 548 MBM BUILDING MBM BUILDING 170 1,916 114 METROCTR. III METROCTR. III 887 2,727 958 SCIOTO CORPORATE CTR. SCIOTO CORPORATE CTR. 1,137 3,147 184 V.A. HOSPITAL V.A. HOSPITAL 703 9,239 478 PARKWOOD PLACE PARKWOOD PLACE 1,690 5,457 6,020 TUTTLE CROSSING UNO'S - - 587 DAYTON, OHIO ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA 898 6,492 (229) CHICAGO, ILLINOIS ----------------- EXECUTIVE TOWERS I EXECUTIVE TOWERS I 2,652 23,705 756 EXECUTIVE TOWERS II EXECUTIVE TOWERS II 3,386 30,965 144 EXECUTIVE TOWERS III EXECUTIVE TOWERS III 3,512 32,126 89 DECATUR, ILLINOIS ----------------- PARK 101 BUILDING #3 275 2,405 787 PARK 101 BUILDING #8 80 1,660 58 PARK 101 ILL POWER LAND LEASE 212 - - BLOOMINGTON, ILLINOIS --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA 766 7,199 1,175 CHAMPAIGN, ILLINOIS ------------------- MARKET VIEW SHOPPING CTR MARKET VIEW CTR. 740 6,830 (204) ST. LOUIS, MISSOURI ------------------- LAUMEIER I LAUMEIER I 1,220 9,091 1,073 LAUMEIER II LAUMEIER II 1,258 9,054 1,038 WESTVIEW PLACE WESTVIEW PLACE 673 8,389 812 WESTMARK WESTMARK 1,200 9,759 702 ALFA - LAVAL ALFA - LAVAL 1,158 4,944 357 I-70 CENTER I-70 CENTER 950 3,915 239 1920 BELTWAY 1920 BELTWAY 605 1,462 36 POINT 70 3322 NGIC 2,615 10,461 241 POINT 70 3300 POINTE 70 1,186 7,287 88 RIVERPORT TOWER RIVERPORT TOWER 3,250 29,251 263 SCRIPTS BUILDING SCRIPTS BUILDING 942 8,482 65 RIVERPORT DISTRIBUTION RIVERPORT DIST. 242 2,175 31 - 51 - SCHULTZ BUILDING SCHULTZ BUILDING 216 1,943 15 MARYVILLE CTR. 500 MARYVILLE CTR. 3,402 26,962 82 MARYVILLE CTR. 530 MARYVILLE CTR. 2,219 14,420 - MARYVILLE CTR. 550 MARYVILLE CTR. 2,219 13,106 - MARYVILLE CTR. 635 MARYVILLE CTR. 1,996 11,525 254 MARYVILLE CTR. 655 MARYVILLE CTR. 3,048 16,652 - MARYVILLE CTR. 540 MARYVILLE CTR. 1,860 12,225 115 TWIN OAKS TWIN OAKS 566 8,072 83 SOUTHPORT I SOUTHPORT I 192 808 1 SOUTHPORT II SOUTHPORT II 151 636 8 SOUTHPORT COMMERCE CTR. SOUTHPORT COMMERCE CTR. 233 979 16 MINNEAPOLIS, MINNESOTA ---------------------- ENTERPRISE INDUST.CTR. ENTERPRISE INDUST.CTR. 874 4,884 - APOLLO DISTRIBUTION CTR. APOLLO DIST. CTR. 866 4,842 - SIBLEY INDUST.CTR. I SIBLEY INDUST.CTR. I 356 2,012 4 SIBLEY INDUST.CTR. II SIBLEY INDUST.CTR. II 234 1,311 138 SIBLEY INDUST.CTR. III SIBLEY INDUST.CTR. III 213 1,191 - YANKEE PLACE YANKEE PLACE 2,822 15,777 - LARC INDUST.PARK I LARC INDUST. PARK I 283 1,580 - LARC INDUST.PARK II LARC INDUST. PARK II 227 1,268 - LARC INDUST.PARK III LARC INDUST. PARK III 137 765 - LARC INDUST.PARK IV LARC INDUST. PARK IV 91 510 - LARC INDUST.PARK V LARC INDUST. PARK V 97 541 - LARC INDUST.PARK VI LARC INDUST. PARK VI 377 2,107 - LARC INDUST.PARK VII LARC INDUST. PARK VII 244 1,365 12 HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR. N. 782 4,370 - HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. 910 5,085 - PENN CORPORATE BUILDING PENN CORP.BLDG. 315 1,762 - BLOOMINGTON INDUST.CTR. BLOOMINGTON INDUST.CTR. 628 3,508 - EDINA INTERCHANGE I EDINA INTER- CHANGE I 637 3,560 - EDINA INTERCHANGE II EDINA INTER- CHANGE II 437 2,444 - EDINA INTERCHANGE III EDINA INTER- CHANGE III 493 2,754 - EDINA INTERCHAGE IV EDINA INTER- CHANGE IV 230 1,286 - EDINA INTERCHANGE V EDINA INTER- CHANGE V 982 5,489 - PAKWA BUSINESS PARK I PAKWA BUSINESS PARK I 351 1,962 - PAKWA BUSINESS PARK II PAKWA BUSINESS PARK II 217 1,212 - PAKWA BUSINESS PARK III PAKWA BUSINESS PARK III 251 1,403 - 7540 BUSH LAKE ROAD 7540 BUSH LAKE ROAD 477 2,669 - CAHILL BUSINESS CTR. CAHILL BUSINESS CTR. 513 2,868 29 10801 RED CIRCLE DRIVE 10801 RED CIRCLE DRIVE 533 2,981 - ENCORE PARK ENCORE PARK 984 5,503 - JOHNSON BUILDING JOHNSON BUILDING 558 3,121 3 CORNERSTONE BUSINESS CTR. CORNERSTONE BUSINESS CTR. 1,469 8,212 - WESTSIDE BUSINESS PARK WESTSIDE BUSINESS PARK 1,189 6,646 - KNOX LAND LEASE KNOX LAND LEASE 1,066 - - OXFORD INDUSTRIAL OXFORD INDUST. 103 576 - CEDAR LAKE BUSINESS CTR. CEDAR LAKE BUSINESS CTR. 334 1,868 - MEDICINE LAKE INDUST.CTR. MEDICINE LAKE INDUST.CTR. 1,158 6,472 - MEDICINE LAKE PROF BLDG. MEDICINE LAKE PROF BLDG. 77 430 - 801 ZANE AVE NORTH 801 ZANE AVE N. 369 2,064 - DECATUR BUSINESS CTR. DECATUR BUS.CTR. 436 2,436 18 SANDBURG INDUST.CTR. SANDBURG INDUST. CTR. 456 2,551 - CRYSTAL INDUST.CTR. CRYSTAL INDUST. CTR. 456 2,549 51 BASS LAKE BUSINESS CTR. BASS LAKE BUS.CTR. 298 1,668 2 UNIVERSITY LAND LEASE UNIVERSITY LAND LEASE 296 - - ELIMINATIONS - 117 - ------- --------- ------- TOTALS $220,959 1,474,101 130,229 - 52 - GROSS BOOK VALUE AT DECEMBER 31, 1997 ------------------------------------- LAND & BUILDINGS/ LOCATION/DEVELOPMENT BUILDING IMPROVEMENTS IMPROVEMENTS TOTAL - -------------------- ------------ ------------ ------------ ---------- INDIANAPOLIS, INDIANA PARK 100 BUS. PARK BUILDING #32 65 973 1,038 PARK 100 BUS. PARK BUILDING #34 133 1,714 1,847 PARK 100 BUS. PARK BUILDING #38 27 265 292 PARK 100 BUS. PARK BUILDING #79 187 2,170 2,357 PARK 100 BUS. PARK BUILDING #80 256 2,638 2,894 PARK 100 BUS. PARK BUILDING #83 252 2,780 3,032 PARK 100 BUS. PARK BUILDING #84 354 2,839 3,193 PARK 100 BUS. PARK BUILDING #95 642 5,079 5,721 PARK 100 BUS. PARK BUILDING #96 1,436 13,325 14,761 PARK 100 BUS. PARK BUILDING #97 676 5,644 6,320 PARK 100 BUS. PARK BUILDING #98 273 8,177 8,450 PARK 100 BUS. PARK BUILDING #100 103 2,909 3,012 PARK 100 BUS. PARK BUILDING #107 99 1,713 1,812 PARK 100 BUS. PARK BUILDING #109 246 1,807 2,053 PARK 100 BUS. PARK BUILDING #116 348 3,176 3,524 PARK 100 BUS. PARK BUILDING #118 231 2,433 2,664 PARK 100 BUS. PARK BUILDING #119 395 3,746 4,141 PARK 100 BUS. PARK BUILDING #121 604 1,091 1,695 PARK 100 BUS. PARK BUILDING #122 290 3,779 4,069 PARK 100 BUS. PARK BUILDING #125 674 5,838 6,512 PARK 100 BUS. PARK BUILDING #126 165 1,530 1,695 PARK 100 BUS. PARK BUILDING #127 96 2,145 2,241 PARK 100 BUS. PARK BUILDING #128 904 8,657 9,561 PARK 100 BUS. PARK BUILDING #129 865 6,045 6,910 PARK 100 BUS. PARK BUILDING #130 514 4,027 4,541 PARK 100 BUS. PARK BUILDING #131 1,110 7,646 8,756 PARK 100 BUS. PARK BUILDING #132 446 1,545 1,991 PARK 100 BUS. PARK BUILDING #133 - 1,024 1,024 GEORGETOWN ROAD BUILDING 1 362 2,437 2,799 GEORGETOWN ROAD BUILDING 2 374 2,588 2,962 GEORGETOWN ROAD BUILDING 3 421 1,960 2,381 PARK 100 BUS. PARK UPS LAND LEASE 270 - 270 PARK 100 BUS. PARK NORGATE LAND LEASE 51 - 51 PARK 100 BUS. PARK KENNY ROGERS LAND LEASE 56 9 65 PARK 100 BUS. PARK SCHAHET HOTELS LAND LEASE - - - PARK 100 BUS. PARK NORCO LAND LEASE - 37 37 PARK 100 BUS. PARK ZOLLMAN LAND LEASE 115 - 115 SHADELAND STATION 7351 SHADELAND 104 1,556 1,660 SHADELAND STATION BUILDING #204/205 266 3,216 3,482 SHADELAND STATION 7240 SHADELEND 152 3,972 4,124 SHADELAND STATION 7330 SHADELAND 260 4,092 4,352 SHADELAND STATION 7369 SHADELAND 102 1,230 1,332 SHADELAND STATION 7340 SHADELAND 169 2,671 2,840 SHADELAND STATION 7400 SHADELAND 581 3,383 3,964 CASTLETON CORNER CUB PLAZA 550 5,140 5,690 CASTLETON SHOPPING CTR MICHAEL'S PLAZA 764 3,773 4,537 SOUTH PARK, INDIANA BUILDING #1 292 2,761 3,053 SOUTH PARK, INDIANA BUILDING #2 341 3,993 4,334 SOUTH PARK, INDIANA BUILDING #3 212 2,618 2,830 SOUTH PARK, INDIANA BRYLANE PKG LOT LEASE - 57 57 GREENWOOD CORNER GREENWOOD CORNER 419 3,550 3,969 GREENWOOD CORNER 1st INDIANA BANK BRANCH 47 266 313 ST. FRANCIS ST. FRANCIS - 6,451 6,451 COMMUNITY MOB COMMUNITY MOB 351 2,865 3,216 HILLSDALE TECHNECTR BUILDING #4 366 5,308 5,674 HILLSDALE TECHNECTR BUILDING #5 251 3,485 3,736 HILLSDALE TECHNECTR BUILDING #6 315 4,276 4,591 KEYSTONE AT THE CRSG 8465 KEYSTONE 90 1,356 1,446 WOODFIELD AT THE CRSG WOODFIELD II 733 10,000 10,733 WOODFIELD AT THE CRSG WOODFIELD III 3,843 22,466 26,309 KEYSTONE AT THE CRSG 8555 KATC - 5,950 5,950 KEYSTONE AT THE CRSG 3520 COMMERCE CRSG - 652 652 ONE PARKWOOD ONE PARKWOOD 1,018 10,102 11,120 TWO PARKWOOD TWO PARKWOOD 861 7,449 8,310 THREE PARKWOOD THREE PARKWOOD 1,377 8,089 9,466 PALOMAR PALOMAR 158 1,542 1,700 FRANKLIN RD.BUS. CTR. FRANKLIN RD. BUS. CTR. 594 6,296 6,890 NAMPAC BUILDING NAMPAC BUILDING 274 1,764 2,038 HAMILTON CROSSING BUILDING #1 536 2,810 3,346 HAMILTON CROSSING BUILDING #2 382 1,876 2,258 KEYSTONE AT THE CRSG F.C. TUCKER BLDG - 281 281 PARK FLETCHER BUILDING #14 76 821 896 - 48 - 6060 GUION RD.(VANSTAR) 6060 GUION RD. (VANSTAR) 511 2,787 3,298 NORTH AIRPORT PARK BUILDING #2 777 7,413 8,190 4750 KENTUCKY AVENUE 4750 KENTUCKY AVE. 246 2,474 2,720 4316 WEST MINNESOTA 4316 W. MINNESOTA 287 2,473 2,760 FORT WAYNE, INDIANA - ------------------- COLDWATER CROSSING COLDWATER SHOPPES 2,310 16,973 19,283 LEBANON, INDIANA - ---------------- AMERICAN AIR FILTER AMERICAN AIR FILTER 177 3,123 3,300 PURITY WHOLESALE PURITY WHOLESALE 610 8,229 8,839 PAMIDA PAMIDA 306 4,086 4,392 NASHVILLE, TENNESSEE - -------------------- KEEBLER BUILDING KEEBLER BUILDING 308 1,256 1,564 HAYWOOD OAKS TECHNECTR BUILDING #2 395 1,919 2,314 HAYWOOD OAKS TECHNECTR BUILDING #3 346 1,870 2,216 HAYWOOD OAKS TECHNECTR BUILDING #4 436 2,141 2,577 HAYWOOD OAKS TECHNECTR BUILDING #5 629 3,240 3,869 HAYWOOD OAKS TECHNECTR BUILDING #6 946 6,356 7,302 HAYWOOD OAKS TECHNECTR BUILDING #7 456 2,376 2,832 HAYWOOD OAKS TECHNECTR BUILDING #8 752 3,431 4,183 GREENBRIAR BUSINESS PARK GREENBRIAR 1,445 5,252 6,697 HEBRON, KENTUCKY - ---------------- SOUTHPARK, KENTUCKY CR SERVICES 1,085 4,060 5,145 SOUTHPARK, KENTUCKY BUILDING #1 696 4,090 4,786 SOUTHPARK, KENTUCKY BUILDING #3 859 3,676 4,535 SOUTHPARK, KENTUCKY REDKEN 779 3,273 4,052 FLORENCE, KENTUCKY - ------------------ EMPIRE COMMERCE EMPIRE COMMERCE 581 3,121 3,702 SOFA EXPRESS SOFA EXPRESS 735 1,042 1,777 CINCINNATI, OHIO - ---------------- PARK 50 TECHNECTR BUILDING #17 510 5,846 6,356 PARK 50 TECHNECTR BUILDING #20 469 7,096 7,565 PARK 50 TECHNECTR BUILDING #25 1,184 4,683 5,867 PARK 50 TECHNECTR SDRC BUILDING 929 20,386 21,315 FIDELITY DRIVE DUN & BRADSTREET 277 2,887 3,164 WORLD PARK BUILDING #5 277 3,880 4,157 WORLD PARK BUILDING #6 385 3,797 4,182 WORLD PARK BUILDING #7 537 4,502 5,039 WORLD PARK BUILDING #8 561 5,669 6,230 WORLD PARK BUILDING #9 317 3,314 3,631 WORLD PARK BUILDING #11 460 5,091 5,551 WORLD PARK BUILDING #14 380 3,847 4,227 WORLD PARK BUILDING #15 381 2,620 3,001 WORLD PARK BUILDING #16 321 3,054 3,375 WORLD PARK BUILDING #18 (BEIERSDORF) 997 5,204 6,201 EASTGATE PLAZA EASTGATE PLAZA 2,031 4,987 7,018 FAIRFIELD BUSINESS CTR BUILDING D 135 1,710 1,845 FAIRFIELD BUSINESS CTR BUILDING E 398 2,597 2,995 UNIVERSITY MOVING UNIVERSITY MOVING 248 1,710 1,958 TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 221 5,954 6,175 GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,054 9,150 11,204 GOVERNOR'S PLAZA KING'S MALL II 1,952 4,185 6,137 GOVERNOR'S PLAZA KOHLS 1,345 3,832 5,177 SOFA EXPRESS SOFA EXPRESS 165 787 952 - 49 - OFFICE MAX OFFICE MAX 651 1,321 1,972 312 ELM BUILDING 312 ELM 5,428 49,324 54,752 311 ELM STREET ZUSSMAN 347 6,829 7,176 ENTERPRISE BUSINESS PARK BUILDING 1 1,051 6,258 7,309 ENTERPRISE BUSINESS PARK BUILDING 2 747 4,631 5,378 ENTERPRISE BUSINESS PARK BUILDING A 119 734 853 ENTERPRISE BUSINESS PARK BUILDING B 119 1,197 1,316 ENTERPRISE BUSINESS PARK BUILDING D 243 2,352 2,595 312 PLUM STREET S & L DATA 2,590 26,834 29,424 TRIANGLE OFFICE PARK BUILDINGS #1-#38 1,018 12,541 13,559 GOVERNOR'S HILL 8790 GOVERNOR'S HILL 409 5,047 5,456 GOVERNOR'S HILL 8700 GOVERNOR'S HILL 468 5,936 6,404 GOVERNOR'S HILL 8800 GOVERNOR'S HILL 231 2,789 3,020 GOVERNOR'S HILL 8600 GOVERNOR'S HILL 1,246 19,523 20,769 GOVERNOR'S POINTE 4770 GOVERNOR'S POINTE 597 8,010 8,607 GOVERNOR'S POINTE 4700 BUILDING 596 5,923 6,519 GOVERNOR'S POINTE 4900 BUILDING 673 4,646 5,319 GOVERNOR'S POINTE 4705 GOVERNOR'S POINTE 793 8,993 9,786 GOVERNOR'S POINTE 4800 GOVERNOR'S POINTE 998 5,700 6,698 GOVERNOR'S POINTE LOWES 3,001 4,243 7,244 GOVERNOR'S POINTE ANTHEM PRESCRIP- TION MGMT. 594 6,096 6,690 GOVERNOR'S POINTE 4660 GOVERNOR'S POINTE 529 4,782 5,311 BIGG'S SUPERCENTER BIGG'S SUPER- CENTER 3,567 6,176 9,743 GOVERNOR'S POINTE 4605 GOVERNOR'S POINTE 716 18,032 18,748 MONTGOMERY CROSSING STEINBERG'S 261 991 1,252 MONTGOMERY CROSSING II SPORTS UNLIMITED 778 3,892 4,670 GOVERNOR'S PLAZA KING'S AUTO MALL I 1,124 4,787 5,911 MOSTELLER DIST. CTR MOSTELLER DIST. CTR 1,320 6,743 8,063 MOSTELLER DIST. CTR MOSTELLER DIST. CTR II 828 5,133 5,961 FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,248 3,248 PERIMETER PARK BUILDING A 229 1,317 1,546 PERIMETER PARK BUILDING B 245 1,045 1,290 CREEK ROAD BUILDING 1 103 847 950 CREEK ROAD BUILDING 2 132 1,155 1,287 WEST LAKE CTR WEST LAKE CTR 2,459 16,970 19,429 EXECUTIVE PLAZA I EXECUTIVE PLAZA I 729 5,249 5,978 EXECUTIVE PLAZA II EXECUTIVE PLAZA II 729 5,332 6,061 LAKE FOREST PLACE LAKE FOREST PLACE 1,954 19,447 21,401 HUNTINGTON BANK HUNTINGTON BANK 175 229 404 OHIO NATIONAL OHIO NATIONAL 2,462 24,749 27,211 CORNELL COMMERCE CORNELL COMMERCE 496 4,816 5,312 ONE ASHVIEW PLACE ONE ASHVIEW PL. 1,204 12,503 13,707 REMINGTON PARK BLDG A 560 1,469 2,029 REMINGTON PARK BLDG B 560 1,465 2,025 BLUE ASH OFFICE CTR VI BLUE ASH OFFICE CTR VI 518 2,810 3,328 SKYPORT BUSINESS PARK SKYPORT BLDG 1 906 5,901 6,807 APPLEBEES APPLEBEES 338 - 338 7910 KENTUCKY DRIVE 7910 KENTUCKY DR. 285 749 1,034 7920 KENTUCKY DRIVE 7920 KENTUCKY DR. 698 1,250 1,948 KENWOOD EXEC. CTR KENWOOD EXEC. CTR 606 3,886 4,492 CLEVELAND, OHIO - --------------- ROCK RUN - NORTH ROCK RUN - NORTH 837 5,526 6,363 ROCK RUN - CTR ROCK RUN - CTR 1,046 6,829 7,875 ROCK RUN - SOUTH ROCK RUN - SOUTH 877 5,793 6,670 FREEDOM SQUARE I FREEDOM SQUARE I 595 3,893 4,488 FREEDOM SQUARE II FREEDOM SQUARE II 1,746 11,586 13,332 CORPORATE PLAZA I CORPORATE PLAZA I 2,116 14,111 16,227 CORPORATE PLAZA II CORPORATE PLAZA II 1,841 12,028 13,869 ONE CORPORATE EXCHANGE ONE CORPORATE EXCHANGE 1,287 8,578 9,865 FREEDOM SQUARE III FREEDOM SQUARE III 701 6,195 6,896 6111 OAK TREE 6111 OAK TREE 703 4,572 5,275 CORPORATE PLACE CORPORATE PLACE 1,165 7,741 8,906 CORPORATE CIRCLE CORPORATE CIRCLE 1,698 11,451 13,149 LANDERBROOK CORPORATE LANDERBROOK CORPORATE 1,807 9,507 11,314 DYMENT DYMENT 816 5,293 6,109 JOHNSON CONTROLS JOHNSON CONTROLS 364 2,356 2,720 SOLON INDUSTRIAL PARK 30600 CARTER 821 3,322 4,143 SOLON INDUSTRIAL PARK 6230 COCHRAN 601 2,438 3,039 SOLON INDUSTRIAL PARK 31900 SOLON-FRONT 474 1,918 2,392 SOLON INDUSTRIAL PARK 5821 SOLON 556 2,250 2,806 SOLON INDUSTRIAL PARK 6161 COCHRAN 395 1,608 2,003 SOLON INDUSTRIAL PARK 5901 HARPER 349 1,418 1,767 - 50 - SOLON INDUSTRIAL PARK 29125 SOLON 505 2,049 2,554 SOLON INDUSTRIAL PARK 6661 COCHRAN 245 994 1,239 SOLON INDUSTRIAL PARK 6521 DAVIS 128 520 648 SOLON INDUSTRIAL PARK 31900 SOLON-REAR 81 329 410 CORPORATE CTR I CORPORATE CTR I 1,041 7,143 8,184 CORPORATE CTR II CORPORATE CTR II 1,048 7,564 8,612 COLUMBUS, OHIO - -------------- CORP. PARK AT TUTTLE CRSG LITEL 2,670 18,931 21,601 CORP. PARK AT TUTTLE CRSG STERLING 1 1,525 12,752 14,277 CORP. PARK AT TUTTLE CRSG INDIANA INS. 717 3,160 3,877 CORP. PARK AT TUTTLE CRSG STERLING 2 605 5,689 6,294 CORP. PARK AT TUTTLE JOHN ALDEN CRSG LIFE INS. 1,066 7,288 8,354 CORP. PARK AT TUTTLE CRSG CARDINAL HEALTH 1,933 10,665 12,598 CORP. PARK AT TUTTLE CRSG COMPMANAGEMENT 867 4,367 5,234 CORP. PARK AT TUTTLE CRSG STERLING 3 1,601 8,435 10,036 CORP. PARK AT TUTTLE CRSG NATIONWIDE 4,816 18,268 23,084 CORP. PARK AT TUTTLE LAZARUS CRSG GROUND LEASE 852 - 852 CORP. PARK AT TUTTLE CRSG XEROX 1,580 9,120 10,700 SUN TV SUN TV 2,006 17,682 19,688 SOUTH POINTE BUILDING D 276 2,987 3,263 SOUTH POINTE BUILDING E 279 2,046 2,325 PET FOODS BUILD-TO-SUIT PET FOODS DIST. 1,031 5,465 6,496 GALYAN'S GALYAN'S 1,925 3,481 5,406 TUTTLE RETAIL CTR TUTTLE RETAIL CTR 3,451 6,321 9,772 MBM BUILDING MBM BUILDING 170 2,030 2,200 METROCTR III METROCTR III 887 3,685 4,572 SCIOTO CORPORATE CTR SCIOTO CORPORATE CTR 1,101 3,367 4,468 V.A. HOSPITAL V.A. HOSPITAL 703 9,717 10,420 PARKWOOD PLACE PARKWOOD PLACE 1,690 11,477 13,167 TUTTLE CROSSING UNO'S 587 - 587 DAYTON, OHIO - ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA 925 6,236 7,161 CHICAGO, ILLINOIS - ----------------- EXECUTIVE TOWERS I EXECUTIVE TOWERS I 2,652 24,461 27,113 EXECUTIVE TOWERS II EXECUTIVE TOWERS II 3,386 31,109 34,495 EXECUTIVE TOWERS III EXECUTIVE TOWERS III 3,512 32,215 35,727 DECATUR, ILLINOIS - ----------------- PARK 101 BUILDING #3 280 3,187 3,467 PARK 101 BUILDING #8 185 1,613 1,798 PARK 101 ILL POWER LAND LEASE 212 - 212 BLOOMINGTON, ILLINOIS - --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA 786 8,354 9,140 CHAMPAIGN, ILLINOIS - -------------------- MARKET VIEW SHOPPING CTR MARKET VIEW CTR 755 6,611 7,366 ST. LOUIS, MISSOURI - ------------------- LAUMEIER I LAUMEIER I 1,386 9,998 11,384 LAUMEIER II LAUMEIER II 1,422 9,927 11,349 WESTVIEW PLACE WESTVIEW PLACE 673 9,201 9,874 WESTMARK WESTMARK 1,207 10,454 11,661 ALFA - LAVAL ALFA - LAVAL 1,158 5,300 6,458 I-70 CENTER I-70 CENTER 950 4,154 5,104 1920 BELTWAY 1920 BELTWAY 616 1,487 2,103 POINT 70 3322 NGIC 2,615 10,702 13,317 POINT 70 3300 POINTE 70 1,186 7,375 8,561 RIVERPORT TOWER RIVERPORT TOWER 3,251 29,513 32,764 SCRIPTS BUILDING SCRIPTS BUILDING 942 8,547 9,489 RIVERPORT DISTRIBUTION RIVERPORT DIST. 242 2,206 2,448 - 51 - SCHULTZ BUILDING SCHULTZ BUILDING 216 1,958 2,174 MARYVILLE CENTER 500 MARYVILLE CTR 3,402 27,044 30,446 MARYVILLE CENTER 530 MARYVILLE CTR 2,219 14,420 16,639 MARYVILLE CENTER 550 MARYVILLE CTR 2,219 13,106 15,325 MARYVILLE CENTER 635 MARYVILLE CTR 1,996 11,779 13,775 MARYVILLE CENTER 655 MARYVILLE CTR 3,048 16,652 19,700 MARYVILLE CENTER 540 MARYVILLE CTR 1,860 12,340 14,200 TWIN OAKS TWIN OAKS 566 8,155 8,721 SOUTHPORT I SOUTHPORT I 192 809 1,001 SOUTHPORT II SOUTHPORT II 151 644 795 SOUTHPORT COMMERCE CTR SOUTHPORT COMMERCE CTR 233 995 1,228 MINNEAPOLIS, MINNESOTA - ---------------------- ENTERPRISE INDUSTRIAL ENTERPRISE CTR INDUSTRIAL CTR 874 4,884 5,758 APOLLO DISTRIBUTION CTR APOLLO DIST. CTR 866 4,842 5,708 SIBLEY INDUSTRIAL CTR I SIBLEY INDUSTRIAL CTR I 360 2,012 2,372 SIBLEY INDUSTRIAL CTR II SIBLEY INDUSTRIAL CTR II 234 1,449 1,683 SIBLEY INDUSTRIAL SIBLEY INDUSTRIAL CTR III CTR III 213 1,191 1,404 YANKEE PLACE YANKEE PLACE 2,822 15,777 18,599 LARC INDUSTRIAL PARK I LARC INDUSTRIAL PARK I 284 1,579 1,863 LARC INDUSTRIAL PARK II LARC INDUSTRIAL PARK II 227 1,268 1,495 LARC INDUSTRIAL PARK III LARC INDUSTRIAL PARK III 138 764 902 LARC INDUSTRIAL PARK IV LARC INDUSTRIAL PARK IV 91 510 601 LARC INDUSTRIAL PARK V LARC INDUSTRIAL PARK V 97 541 638 LARC INDUSTRIAL PARK VI LARC INDUSTRIAL PARK VI 377 2,107 2,484 LARC INDUSTRIAL PARK VII LARC INDUSTRIAL PARK VII 245 1,376 1,621 HAMPSHIRE DIST CTR N. HAMPSHIRE DIST CTR N. 782 4,370 5,152 HAMPSHIRE DIST CTR S. HAMPSHIRE DIST CTR S. 910 5,085 5,995 PENN CORPORATE BUILDING PENN CORP.BLDG 315 1,762 2,077 BLOOMINGTON INDUST.CTR. BLOOMINGTON INDUST. CTR. 628 3,508 4,136 EDINA INTERCHANGE I EDINA INTER- CHANGE I 637 3,560 4,197 EDINA INTERCHANGE II EDINA INTER- CHANGE II 437 2,444 2,881 EDINA INTERCHANGE III EDINA INTER- CHANGE III 493 2,754 3,247 EDINA INTERCHAGE IV EDINA INTER- CHAGE IV 230 1,286 1,516 EDINA INTERCHANGE V EDINA INTER- CHANGE V 982 5,489 6,471 PAKWA BUSINESS PARK I PAKWA BUSINESS PARK I 351 1,962 2,313 PAKWA BUSINESS PARK II PAKWA BUSINESS PARK II 218 1,211 1,429 PAKWA BUSINESS PARK III PAKWA BUSINESS PARK III 251 1,403 1,654 7540 BUSH LAKE ROAD 7540 BUSH LAKE ROAD 477 2,669 3,146 CAHILL BUSINESS CTR CAHILL BUSINESS CTR 513 2,897 3,410 10801 RED CIRCLE DRIVE 10801 RED CIRCLE DRIVE 533 2,981 3,514 ENCORE PARK ENCORE PARK 984 5,503 6,487 JOHNSON BUILDING JOHNSON BUILDING 558 3,124 3,682 CORNERSTONE BUSINESS CTR CORNERSTONE BUSINESS CTR 1,469 8,212 9,681 WESTSIDE BUSINESS PARK WESTSIDE BUSINESS PARK 1,189 6,646 7,835 KNOX LAND LEASE KNOX LAND LEASE 1,066 - 1,066 OXFORD INDUSTRIAL OXFORD INDUST. 103 576 679 CEDAR LAKE BUSINESS CTR CEDAR LAKE BUSINESS CTR 334 1,868 2,202 MEDICINE LAKE INDUST CTR MEDICINE LAKE INDUST CTR 1,158 6,472 7,630 MEDICINE LAKE PROF BLDG MEDICINE LAKE PROF BLDG 77 430 507 801 ZANE AVE NORTH 801 ZANE AVE N. 369 2,064 2,433 DECATUR BUSINESS CTR DECATUR BUSINESS CTR 436 2,454 2,890 SANDBURG INDUSTRIAL CTR SANDBURG INDUST. CTR 456 2,551 3,007 CRYSTAL INDUSTRIAL CTR CRYSTAL INDUST. CTR 456 2,600 3,056 BASS LAKE BUSINESS CTR BASS LAKE BUSINESS CTR 299 1,669 1,968 UNIVERSITY LAND LEASE UNIVERSITY LAND LEASE 296 - 296 ELIMINATIONS - (1,955) (1,955) ------- --------- --------- TOTALS 231,614 1,591,604 1,823,218 ======= ========= ========= - 52 - ACCUM DATE OF DATE DEPR. LOCATION/DEVELOPMENT BUILDING DEPR. CONSTRN. ACQUIRED LIFE ---------------------- -------- ------- ------- -------- ----- INDIANAPOLIS, INDIANA --------------------- PARK 100 BUSINESS PARK BUILDING #32 286 1978 1986 (4) PARK 100 BUSINESS PARK BUILDING #34 557 1979 1986 (4) PARK 100 BUSINESS PARK BUILDING #38 30 1978 1993 (4) PARK 100 BUSINESS PARK BUILDING #79 337 1988 1993 (4) PARK 100 BUSINESS PARK BUILDING #80 297 1988 1993 (4) PARK 100 BUSINESS PARK BUILDING #83 286 1989 1993 (4) PARK 100 BUSINESS PARK BUILDING #84 291 1989 1993 (4) PARK 100 BUSINESS PARK BUILDING #95 508 1993 1994 (4) PARK 100 BUSINESS PARK BUILDING #96 1,061 1994 1994 (4) PARK 100 BUSINESS PARK BUILDING #97 837 1994 1994 (4) PARK 100 BUSINESS PARK BUILDING #98 1,030 1968 1994 (4) PARK 100 BUSINESS PARK BUILDING #100 303 1995 1995 (4) PARK 100 BUSINESS PARK BUILDING #107 162 1984 1995 (4) PARK 100 BUSINESS PARK BUILDING #109 577 1985 1986 (4) PARK 100 BUSINESS PARK BUILDING #116 782 1988 1988 (4) PARK 100 BUSINESS PARK BUILDING #118 383 1988 1993 (4) PARK 100 BUSINESS PARK BUILDING #119 431 1989 1993 (4) PARK 100 BUSINESS PARK BUILDING #121 114 1989 1993 (4) PARK 100 BUSINESS PARK BUILDING #122 451 1990 1993 (4) PARK 100 BUSINESS PARK BUILDING #125 621 1994 1994 (4) PARK 100 BUSINESS PARK BUILDING #126 177 1984 1994 (4) PARK 100 BUSINESS PARK BUILDING #127 163 1995 1995 (4) PARK 100 BUSINESS PARK BUILDING #128 773 1996 1996 (4) PARK 100 BUSINESS PARK BUILDING #129 221 1996 1996 (4) PARK 100 BUSINESS PARK BUILDING #130 196 1996 1996 (4) PARK 100 BUSINESS PARK BUILDING #131 197 1997 1997 (4) PARK 100 BUSINESS PARK BUILDING #132 8 1997 1997 (4) PARK 100 BUSINESS PARK BUILDING #133 6 1997 1997 (4) GEORGETOWN ROAD BUILDING 1 66 1987 1996 (4) GEORGETOWN ROAD BUILDING 2 71 1987 1996 (4) GEORGETOWN ROAD BUILDING 3 52 1987 1996 (4) PARK 100 BUSINESS PARK UPS LAND LEASE 3 N/A 1997 (4) PARK 100 BUSINESS PARK NORGATE LAND LEASE - N/A 1995 (4) PARK 100 BUSINESS PARK KENNY ROGERS LAND LSE 1 N/A 1995 (4) PARK 100 BUSINESS PARK SCHAHET HOTELS LAND LSE - N/A 1995 (4) PARK 100 BUSINESS PARK NORCO LAND LEASE 5 N/A 1995 (4) PARK 100 BUSINESS PARK ZOLLMAN LAND LEASE - N/A 1994 (4) SHADELAND STATION 7351 SHADELAND 199 1983 1993 (4) SHADELAND STATION BUILDING #204/205 923 1984 1986 (4) SHADELAND STATION 7240 SHADELAND 1,162 1985 1993 (4) SHADELAND STATION 7330 SHADELAND 919 1988 1988 (4) SHADELAND STATION 7369 SHADELAND 126 1989 1993 (4) SHADELAND STATION 7340 SHADELAND 280 1989 1993 (4) SHADELAND STATION 7400 SHADELAND 455 1990 1993 (4) CASTLETON CORNER CUB PLAZA 1,510 1986 1986 (4) CASTLETON SHOPPING CTR. MICHAEL'S PLAZA 440 1984 1993 (4) SOUTH PARK, INDIANA BUILDING #1 462 1989 1993 (4) SOUTH PARK, INDIANA BUILDING #2 493 1990 1993 (4) SOUTH PARK, INDIANA BUILDING #3 458 1990 1993 (4) SOUTH PARK, INDIANA BRYLANE PKG LOT LEASE 14 N/A 1994 (4) GREENWOOD CORNER GREENWOOD CORNER 999 1986 1986 (4) GREENWOOD CORNER 1st INDIANA BANK 27 1988 1993 (4) ST. FRANCIS ST. FRANCIS 780 1995 1995 (4) COMMUNITY MOB COMMUNITY MOB 234 1995 1995 (4) HILLSDALE TECHNECENTER BUILDING #4 580 1987 1993 (4) HILLSDALE TECHNECENTER BUILDING #5 426 1987 1993 (4) HILLSDALE TECHNECENTER BUILDING #6 442 1987 1993 (4) KEYSTONE AT THE CROSSING 8465 KEYSTONE 94 1983 1995 (4) WOODFIELD AT THE CROSSING WOODFIELD II 1,247 1987 1993 (4) WOODFIELD AT THE CROSSING WOODFIELD III 2,677 1989 1993 (4) KEYSTONE AT THE CROSSING 8555 KATC 69 1985 1997 (4) KEYSTONE AT THE CROSSING 3520 COMMERCE CRSG 221 1976 1993 (4) ONE PARKWOOD ONE PARKWOOD 569 1989 1995 (4) TWO PARKWOOD TWO PARKWOOD 675 1996 1996 (4) THREE PARKWOOD THREE PARKWOOD 169 1997 1997 (4) PALAMOR PALAMOR 113 1973 1995 (4) FRANKLIN ROAD BUS. CTR. FRANKLIN ROAD BUS. CTR. 492 1962 1995 (4) NAMPAC BUILDING NAMPAC BUILDING 115 1974 1995 (4) HAMILTON CROSSING BUILDING #1 342 1989 1993 (4) HAMILTON CROSSING BUILDING #2 15 1997 1997 (4) KEYSTONE AT THE CROSSING F.C. TUCKER BLDG 29 1978 1993 (4) PARK FLETCHER BUILDING #14 102 1978 1995 (4) - 48 - 6060 GUION RD (VANSTAR) 6060 GUION RD (VANSTAR) 103 1968 1996 (4) NORTH AIRPORT PARK BUILDING #2 260 1997 1997 (4) 4750 KENTUCKY AVE 4750 KENTUCKY AVE 78 1974 1996 (4) 4316 W.MINNESOTA 4316 W.MINNESOTA 78 1970 1996 (4) FORT WAYNE, INDIANA ------------------- COLDWATER CROSSING COLDWATER SHOPPES 1,504 1990 1994 (4) LEBANON, INDIANA ---------------- AMERICAN AIR FILTER AMERICAN AIR FILTER 153 1996 1996 (4) PURITY WHOLESALE PURITY WHOLESALE 132 1997 1997 (4) PAMIDA PAMIDA 107 1997 1997 (4) NASHVILLE, TENNESSEE -------------------- KEEBLER BUILDING KEEBLER BUILDING 86 1985 1995 (4) HAYWOOD OAKS TECHNECTR BUILDING #2 213 1988 1993 (4) HAYWOOD OAKS TECHNECTR BUILDING #3 326 1988 1993 (4) HAYWOOD OAKS TECHNECTR BUILDING #4 229 1988 1993 (4) HAYWOOD OAKS TECHNECTR BUILDING #5 477 1988 1993 (4) HAYWOOD OAKS TECHNECTR BUILDING #6 721 1989 1993 (4) HAYWOOD OAKS TECHNECTR BUILDING #7 308 1995 1995 (4) HAYWOOD OAKS TECHNECTR BUILDING #8 54 1997 1997 (4) GREENBRIAR BUS. PARK GREENBRIAR 555 1986 1993 (4) HEBRON, KENTUCKY ---------------- SOUTHPARK, KENTUCKY CR SERVICES 359 1994 1994 (4) SOUTHPARK, KENTUCKY BUILDING #1 433 1990 1993 (4) SOUTHPARK, KENTUCKY BUILDING #3 374 1991 1993 (4) SOUTHPARK, KENTUCKY REDKEN 284 1994 1994 (4) FLORENCE, KENTUCKY ------------------ EMPIRE COMMERCE EMPIRE COMMERCE 123 1973 1996 (4) SOFA EXPRESS SOFA EXPRESS 13 1997 1997 (4) CINCINNATI, OHIO ---------------- PARK 50 TECHNECENTER BUILDING #17 2,021 1985 1986 (4) PARK 50 TECHNECENTER BUILDING #20 1,704 1987 1988 (4) PARK 50 TECHNECENTER BUILDING #25 510 1989 1993 (4) PARK 50 TECHNECENTER SDRC BUILDING 2,081 1991 1993 (4) FIDELITY DRIVE DUN & BRADSTREET 894 1972 1986 (4) WORLD PARK BUILDING #5 1,126 1987 1990 (4) WORLD PARK BUILDING #6 987 1987 1990 (4) WORLD PARK BUILDING #7 943 1987 1990 (4) WORLD PARK BUILDING #8 595 1989 1993 (4) WORLD PARK BUILDING #9 438 1989 1993 (4) WORLD PARK BUILDING #11 596 1989 1993 (4) WORLD PARK BUILDING #14 421 1989 1993 (4) WORLD PARK BUILDING #15 341 1990 1993 (4) WORLD PARK BUILDING #16 324 1989 1993 (4) WORLD PARK BUILDING #18 (BEIERSDORF) 40 1997 1997 (4) EASTGATE PLAZA EASTGATE PLAZA 343 1990 1995 (4) FAIRFIELD BUSINESS CTR. BUILDING D 93 1990 1995 (4) FAIRFIELD BUSINESS CTR. BUILDING E 149 1990 1995 (4) UNIVERSITY MOVING UNIVERSITY MOVING 118 1991 1995 (4) TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 785 1971 1993 (4) GOVERNOR'S PLAZA GOVERNOR'S PLAZA 938 1990 1993 (4) GOVERNOR'S PLAZA KING'S MALL II 463 1988 1989 (4) GOVERNOR'S PLAZA KOHLS 292 1994 1994 (4) SOFA EXPRESS SOFA EXPRESS 46 1995 1995 (4) - 49 - OFFICE MAX OFFICE MAX 78 1995 1995 (4) 312 ELM BUILDING 312 ELM 5,499 1992 1993 (4) 311 ELM STREET ZUSSMAN 800 1902 1993 (4) ENTERPRISE BUS. PARK BUILDING 1 689 1990 1993 (4) ENTERPRISE BUS. PARK BUILDING 2 793 1990 1993 (4) ENTERPRISE BUS. PARK BUILDING A 49 1987 1995 (4) ENTERPRISE BUS. PARK BUILDING B 78 1988 1995 (4) ENTERPRISE BUS. PARK BUILDING D 225 1989 1995 (4) 312 PLUM STREET S & L DATA 3,041 1987 1993 (4) TRIANGLE OFFICE PARK BUILDINGS #1 - #38 4,681 1965 1986 (4) GOVERNOR'S HILL 8790 GOVERNOR'S HILL 619 1985 1991 (4) GOVERNOR'S HILL 8700 GOVERNOR'S HILL 618 1985 1993 (4) GOVERNOR'S HILL 8800 GOVERNOR'S HILL 1,148 1985 1986 (4) GOVERNOR'S HILL 8600 GOVERNOR'S HILL 2,281 1986 1991 (4) GOVERNOR'S POINTE 4770 GOVERNOR'S PTE. 1,955 1986 1988 (4) GOVERNOR'S POINTE 4700 BUILDING 1,436 1987 1988 (4) GOVERNOR'S POINTE 4900 BUILDING 1,298 1987 1989 (4) GOVERNOR'S POINTE 4705 GOVERNOR'S PTE. 1,102 1988 1993 (4) GOVERNOR'S POINTE 4800 GOVERNOR'S PTE. 847 1989 1993 (4) GOVERNOR'S POINTE LOWES 37 1997 1997 (4) GOVERNOR'S POINTE ANTHEM PRESCRIP.MGMT. 74 1997 1997 (4) GOVERNOR'S POINTE 4660 GOVERNOR'S PTE 59 1997 1997 (4) BIGG'S SUPERCENTER BIGG'S SUPERCENTER 292 1996 1996 (4) GOVERNOR'S POINTE 4605 GOVERNOR'S PTE 1,951 1990 1993 (4) MONTGOMERY CROSSING STEINBERG'S 74 1993 1993 (4) MONTGOMERY CROSSING II SPORTS UNLIMITED 321 1994 1994 (4) GOVERNOR'S PLAZA KING'S AUTO MALL I 1,108 1990 1993 (4) MOSTELLER DIST. CTR. MOSTELLER DIST.CTR. 469 1957 1996 (4) MOSTELLER DIST. CTR. MOSTELLER DIST.CTR.II 23 1997 1997 (4) FRANCISCAN HEALTH FRANCISCAN HEALTH 135 1996 1996 (4) PERIMETER PARK BUILDING A 38 1991 1996 (4) PERIMETER PARK BUILDING B 32 1991 1996 (4) CREEK ROAD BUILDING 1 25 1971 1996 (4) CREEK ROAD BUILDING 2 34 1971 1996 (4) WEST LAKE CTR. WEST LAKE CTR. 631 1981 1996 (4) EXECUTIVE PLAZA I EXECUTIVE PLAZA I 135 1980 1996 (4) EXECUTIVE PLAZA II EXECUTIVE PLAZA II 138 1981 1996 (4) LAKE FOREST PLACE LAKE FOREST PLACE 651 1985 1996 (4) HUNTINGTON BANK HUNTINGTON BANK 8 1986 1996 (4) OHIO NATIONAL OHIO NATIONAL 1,312 1996 1996 (4) CORNELL COMMERCE CORNELL COMMERCE 280 1989 1996 (4) ONE ASHVIEW PLACE ONE ASHVIEW PLACE 117 1989 1997 (4) REMINGTON PARK BLDG A 12 1982 1997 (4) REMINGTON PARK BLDG B 12 1982 1997 (4) BLUE ASH OFFICE CTR VI BLUE ASH OFFICE CTR VI 16 1989 1997 (4) SKYPORT BUSINESS PARK SKYPORT BUILDING 1 102 1996 1997 (4) APPLEBEES APPLEBEES 2 N/A 1997 (4) 7910 KENTUCKY DRIVE 7910 KENTUCKY DRIVE 9 1980 1997 (4) 7920 KENTUCKY DRIVE 7920 KENTUCKY DRIVE 14 1974 1997 (4) KENWOOD EXEC. CTR. KENWOOD EXEC. CTR. - 1981 1997 (4) CLEVELAND, OHIO --------------- ROCK RUN - NORTH ROCK RUN - NORTH 277 1984 1996 (4) ROCK RUN - CTR. ROCK RUN - CTR. 323 1985 1996 (4) ROCK RUN - SOUTH ROCK RUN - SOUTH 295 1986 1996 (4) FREEDOM SQUARE I FREEDOM SQUARE I 186 1980 1996 (4) FREEDOM SQUARE II FREEDOM SQUARE II 552 1987 1996 (4) CORPORATE PLAZA I CORPORATE PLAZA I 714 1989 1996 (4) CORPORATE PLAZA II CORPORATE PLAZA II 543 1991 1996 (4) ONE CORPORATE EXCHANGE ONE CORPORATE EXCHANGE 418 1989 1996 (4) FREEDOM SQUARE III FREEDOM SQUARE III 113 1997 1997 (4) 6111 OAK TREE 6111 OAK TREE 28 1979 1997 (4) CORPORATE PLACE CORPORATE PLACE 214 1988 1996 (4) CORPORATE CIRCLE CORPORATE CIRCLE 328 1983 1996 (4) LANDERBROOK CORPORATE LANDERBROOK CORP. 59 1997 1997 (4) DYMENT DYMENT 88 1988 1997 (4) JOHNSON CONTROLS JOHNSON CONTROLS 39 1972 1997 (4) SOLON INDUSTRIAL PARK 30600 CARTER 16 1971 1997 (4) SOLON INDUSTRIAL PARK 6230 COCHRAN 12 1977 1997 (4) SOLON INDUSTRIAL PARK 31900 SOLON - FRONT 9 1974 1997 (4) SOLON INDUSTRIAL PARK 5821 SOLON 11 1970 1997 (4) SOLON INDUSTRIAL PARK 6161 COCHRAN 8 1978 1997 (4) SOLON INDUSTRIAL PARK 5901 HARPER 7 1970 1997 (4) - 50 - SOLON INDUSTRIAL PARK 29125 SOLON 10 1980 1997 (4) SOLON INDUSTRIAL PARK 6661 COCHRAN 5 1979 1997 (4) SOLON INDUSTRIAL PARK 6521 DAVIS 3 1979 1997 (4) SOLON INDUSTRIAL PARK 31900 SOLON - REAR 2 1982 1997 (4) CORPORATE CTR. I CORPORATE CTR. I 303 1985 1996 (4) CORPORATE CTR. II CORPORATE CTR. II 307 1987 1996 (4) COLUMBUS, OHIO -------------- CORP. PARK AT TUTTLE CRSG LITEL 1,923 1990 1993 (4) CORP. PARK AT TUTTLE CRSG STERLING 1 1,301 1990 1993 (4) CORP. PARK AT TUTTLE CRSG INDIANA INSURANCE 617 1994 1994 (4) CORP. PARK AT TUTTLE CRSG STERLING 2 383 1995 1995 (4) CORP. PARK AT TUTTLE CRSG JOHN ALDEN LIFE INS. 521 1995 1995 (4) CORP. PARK AT TUTTLE CRSG CARDINAL HEALTH 1,189 1995 1995 (4) CORP. PARK AT TUTTLE CRSG COMPMANAGEMENT 27 1997 1997 (4) CORP. PARK AT TUTTLE CRSG STERLING 3 419 1996 1995 (4) CORP. PARK AT TUTTLE CRSG NATIONWIDE 1,101 1996 1996 (4) CORP. PARK AT TUTTLE CRSG LAZARUS GROUND LEASE - N/A 1996 (4) CORP. PARK AT TUTTLE CRSG XEROX 922 1992 1994 (4) SUN TV SUN TV 225 1995 1997 (4) SOUTH POINTE BUILDING D 18 1997 1997 (4) SOUTH POINTE BUILDING E 8 1997 1997 (4) PET FOODS BUILD-TO-SUIT PET FOODS DIST. 435 1993 1993 (4) GALYAN'S GALYAN'S 267 1984 1994 (4) TUTTLE RETAIL CTR. TUTTLE RETAIL CTR. 343 1995 1995 (4) MBM BUILDING MBM BUILDING 148 1978 1994 (4) METROCENTER III METROCENTER III 272 1983 1996 (4) SCIOTO CORPORATE CTR. SCIOTO CORP. CTR. 96 1987 1996 (4) V.A. HOSPITAL V.A. HOSPITAL 773 1994 1994 (4) PARKWOOD PLACE PARKWOOD PLACE 213 1997 1997 (4) TUTTLE CROSSING UNO'S N/A 1997 (4) DAYTON, OHIO ------------ SUGARCREEK PLAZA SUGARCREEK PLAZA 1,462 1988 1988 (4) CHICAGO, ILLINOIS ----------------- EXECUTIVE TOWERS I EXECUTIVE TOWERS I 223 1983 1997 (4) EXECUTIVE TOWERS II EXECUTIVE TOWERS II 278 1984 1997 (4) EXECUTIVE TOWERS III EXECUTIVE TOWERS III 296 1987 1997 (4) DECATUR, ILLINOIS ----------------- PARK 101 BUILDING #3 1,082 1979 1986 (4) PARK 101 BUILDING #8 471 1980 1986 (4) PARK 101 ILL POWER LAND LEASE - N/A 1994 (4) BLOOMINGTON, ILLINOIS --------------------- LAKEWOOD PLAZA LAKEWOOD PLAZA 1,895 1987 1988 (4) CHAMPAIGN, ILLINOIS ------------------- MARKET VIEW SHOPPING CTR. MARKET VIEW CTR. 1,946 1985 1986 (4) ST. LOUIS, MISSOURI ------------------- LAUMEIER I LAUMEIER I 775 1987 1995 (4) LAUMEIER II LAUMEIER II 720 1988 1995 (4) WESTVIEW PLACE WESTVIEW PLACE 704 1988 1995 (4) WESTMARK WESTMARK 564 1987 1995 (4) ALFA - LAVAL ALFA - LAVAL 153 1996 1996 (4) I-70 CENTER I-70 CENTER 159 1986 1996 (4) 1920 BELTWAY 1920 BELTWAY 53 1986 1996 (4) POINT 70 3322 NGIC - 1987 1997 (4) POINT 70 3300 POINTE 70 130 1989 1997 (4) RIVERPORT TOWER RIVERPORT TOWER 209 1991 1997 (4) SCRIPTS BUILDING SCRIPTS BUILDING 56 1992 1997 (4) RIVERPORT DIST. RIVERPORT DIST. 15 1990 1997 (4) - 51 - SCHULTZ BUILDING SCHULTZ BUILDING 13 1989 1997 (4) MARYVILLE CENTER 500 MARYVILLE CTR. 191 1984 1997 (4) MARYVILLE CENTER 530 MARYVILLE CTR. 97 1990 1997 (4) MARYVILLE CENTER 550 MARYVILLE CTR. 90 1988 1997 (4) MARYVILLE CENTER 635 MARYVILLE CTR. 92 1987 1997 (4) MARYVILLE CENTER 655 MARYVILLE CTR. 115 1994 1997 (4) MARYVILLE CENTER 540 MARYVILLE CTR. 82 1990 1997 (4) TWIN OAKS TWIN OAKS 53 1994 1997 (4) SOUTHPORT I SOUTHPORT I 5 1977 1997 (4) SOUTHPORT II SOUTHPORT II 5 1978 1997 (4) SOUTHPORT COMMERCE SOUTHPORT COMMERCE CTR. CTR. 7 1978 1997 (4) MINNEAPOLIS, MINNESOTA ---------------------- ENTERPRISE INDUSTRIAL ENTERPRISE INDUSTRIAL CTR. CTR. 21 1979 1997 (4) APOLLO DIST. CTR. APOLLO DIST. CTR. 21 1997 1997 (4) SIBLEY INDUST.CTR. I SIBLEY INDUST. CTR. I 9 1973 1997 (4) SIBLEY INDUST.CTR. II SIBLEY INDUST. CTR. II 6 1972 1997 (4) SIBLEY INDUST.CTR. III SIBLEY INDUST. CTR. III 5 1967 1997 (4) YANKEE PLACE YANKEE PLACE 68 1986 1997 (4) LARC INDUST. PARK I LARC INDUST. PARK I 7 1977 1997 (4) LARC INDUST. PARK II LARC INDUST. PARK II 5 1976 1997 (4) LARC INDUST. PARK III LARC INDUST. PARK III 3 1980 1997 (4) LARC INDUST. PARK IV LARC INDUST. PARK IV 2 1980 1997 (4) LARC INDUST. PARK V LARC INDUST. PARK V 2 1980 1997 (4) LARC INDUST. PARK VI LARC INDUST. PARK VI 9 1975 1997 (4) LARC INDUST. PARK VII LARC INDUST. PARK VII 6 1973 1997 (4) HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR. N. 19 1979 1997 (4) HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. 22 1979 1997 (4) PENN CORPORATE BLDG. PENN CORPORATE BLDG 8 1977 1997 (4) BLOOMINGTON INDUST. BLOOMINGTON INDUST. CTR. CTR. 15 1963 1997 (4) EDINA INTERCHANGE I EDINA INTERCHANGE I 15 1995 1997 (4) EDINA INTERCHANGE II EDINA INTERCHANGE II 11 1980 1997 (4) EDINA INTERCHANGE III EDINA INTERCHANGE III 12 1981 1997 (4) EDINA INTERCHAGE IV EDINA INTERCHAGE IV 6 1974 1997 (4) EDINA INTERCHANGE V EDINA INTERCHANGE V 24 1974 1997 (4) PAKWA BUS. PARK I PAKWA BUS. PARK I 8 1979 1997 (4) PAKWA BUS. PARK II PAKWA BUS. PARK II 5 1979 1997 (4) PAKWA BUS. PARK III PAKWA BUS. PARK III 6 1979 1997 (4) 7540 BUSH LAKE ROAD 7540 BUSH LAKE ROAD 11 1967 1997 (4) CAHILL BUSINESS CTR. CAHILL BUSINESS CTR. 13 1980 1997 (4) 10801 RED CIRCLE DR. 10801 RED CIRCLE DR. 13 1977 1997 (4) ENCORE PARK ENCORE PARK 24 1977 1997 (4) JOHNSON BUILDING JOHNSON BUILDING 14 1974 1997 (4) CORNERSTONE BUS.CTR. CORNERSTONE BUS. CTR. 35 1996 1997 (4) WESTSIDE BUS. PARK WESTSIDE BUS. PARK 29 1987 1997 (4) KNOX LAND LEASE KNOX LAND LEASE - N/A 1997 (4) OXFORD INDUSTRIAL OXFORD INDUSTRIAL 2 1971 1997 (4) CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 8 1976 1997 (4) MEDICINE LAKE INDUST. MEDICINE LAKE CTR. INDUST.CTR. 28 1970 1997 (4) MEDICINE LAKE PROF. MEDICINE LAKE PROF. BLDG. BLDG. 2 1970 1997 (4) 801 ZANE AVE NORTH 801 ZANE AVE NORTH 9 1978 1997 (4) DECATUR BUSINESS CTR. DECATUR BUSINESS CTR. 10 1982 1997 (4) SANDBURG INDUSTRIAL SANDBURG INDUSTRIAL CTR. CTR. 11 1973 1997 (4) CRYSTAL INDUST. CTR. CRYSTAL INDUST. CTR. 14 1974 1997 (4) BASS LAKE BUS. CTR. BASS LAKE BUS. CTR. 7 1981 1997 (4) UNIVERSITY LAND UNIVERSITY LAND LEASE LEASE - N/A 1997 (4) ELIMINATIONS - ------- TOTALS 116,264 =======
- 52 - (1) Costs capitalized subsequent to acquisition include decreases for purchase price reduction payments received and land sales or takedowns. (2) The Company owns a 66.67% interest in the partnership owning this building. The Company shares in the cash flow of this building in accordance with the Company's partnership interests. (3) The four buildings comprising Tri-County Office Park were constructed in 1971, 1973, and 1982. (4) Depreciation of real estate is computed using the straight-line method over 40 years for building and shorter periods based on lease terms (generally 3 to 10 years) for tenant improvements.
Real Estate Assets Accumulated Depreciation ----------------------------- -------------------------- 1997 1996 1995 1997 1996 1995 ------ ------ ------ ------ ------ ------ Balance at beginning of year $1,181,431 $ 804,164 $653,552 $ 82,207 $56,335 $38,058 Acquisitions 525,751 213,979 114,705 - - - Construction costs and tenant improvements 156,745 173,186 84,790 - - - Depreciation expense - - - 39,768 27,569 20,416 Acquisition of minority interest and joint venture interest 19,446 21,627 796 - - - --------- --------- ------- ------- ------ ------ 1,883,373 1,212,956 853,843 121,975 83,904 58,474 Deductions during year: Cost of real estate sold (32,333) (11,347) (4,393) (4,224) (586) (1,259) Contribution to Joint Venture (27,873) (19,175) (44,725) (950) (108) (319) Other 51 (1,003) (561) (537) (1,003) (561) --------- --------- ------- ------- ------ ------ $1,823,218 $1,181,431 $804,164 $116,264 $82,207 $56,335 ========= ========= ======= ======= ====== ======
- 53 - 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 20, 1998 By: /s/ Thomas L. Hefner ----------------------------------- Thomas L. Hefner President and Chief Executive Officer By: /s/ Darell E. Zink, Jr. ----------------------------------- Darell E. Zink, Jr. Executive Vice President and Chief Financial Officer By: /s/ Dennis D. Oklak ----------------------------------- Dennis D. Oklak Executive Vice President and Chief Administrative 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/ John W. Wynne * 3/20/98 Chairman of the Board ------------------- John W. Wynne /s/ Thomas L. Hefner * 3/20/98 President and Chief Executive -------------------- Officer and Director Thomas L. Hefner /s/ Darell E. Zink, Jr.* 3/20/98 Executive Vice President and --------------------- Chief Financial Officer and Darell E. Zink, Jr. Director /s/ Dennis D. Oklak * 3/20/98 Executive Vice President and ------------------- Chief Administrative Officer Dennis D. Oklak - 54 - /s/ Geoffrey Button * 3/20/98 Director --------------------- Geoffrey Button /s/ John D. Peterson * 3/20/98 Director ---------------------- John D. Peterson /s/ Ngaire E. Cuneo * 3/20/98 Director -------------------- Ngaire E. Cuneo /s/ L. Ben Lytle * 3/20/98 Director ------------------ L. Ben Lytle /s/ Jay J. Strauss * 3/20/98 Director -------------------- Jay J. Strauss /s/ Howard L. Feinsand * 3/20/98 Director ------------------------ Howard L. Feinsand /s/ James E. Rogers * 3/20/98 Director ----------------------- James E. Rogers /s/ Daniel C. Staton* 3/20/98 Director -------------------- Daniel C. Staton * By Dennis D. Oklak, Attorney-in-Fact /s/ Dennis D. Oklak ----------------------- - 55 - EX-3.2 2 AUGUST 16, 1996 AMENDMENT ARTICLES OF AMENDMENT OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF DUKE REALTY INVESTMENTS, INC. The undersigned officer of DUKE REALTY INVESTMENTS, INC. (the "Corporation"), existing pursuant to the provisions of INDIANA BUSINESS CORPORATION LAW (IND. CODE 23-1 ET SEQ.), AS AMENDED (the "Act") and desiring to give notice of corporate action effectuating amendment of certain provisions of its Amended and Restated Articles of Incorporation certify the following facts: ARTICLE I - AMENDMENT SECTION 1: The date of incorporation of the Corporation is MARCH 12, 1992 SECTION 2: The name of the Corporation following this amendment of its Amended and Restated Articles of Incorporation is: DUKE REALTY INVESTMENTS, INC. SECTION 3: The exact text to Article VI of the Amended and Restated Articles of Incorporation is amended to add Section 6.05 as follows: SEE ATTACHED EXHIBIT A --------- This Amendment is to be effective at 12:01a.m. on August 16, 1996. ARTICLE II-MANNER OF ADOPTION AND VOTE SECTION 1: Action by Directors: The Board of Directors of the Corporation duly adopted resolutions amending Article VI of the Amended and Restated Articles of Incorporation. These resolutions were adopted at meetings duly held on July 27, 1995, February 1, 1996 and August 6, 1996, at which quorums were present. SECTION 2: Action by Shareholders: Pursuant to I.C. 23-1-25-2(d), the Shareholders of the Corporation were not required to vote with respect to this amendment to the Amended and Restated Articles of Incorporation. SECTION 3: Compliance with legal requirements: The manner of the adoption of the Articles of Amendment and the vote by which they were adopted constitute full legal compliance with the provisions of the Act, the Amended and Restated Articles of Incorporation, and the Code of By-Laws of the Corporation. I hereby verify, subject to penalties for perjury, that the facts contained herein are true this 16th day of August, 1996. /s/ Dennis D. Oklak ------------------------------ Dennis D. Oklak, Vice President and Treasurer EX-3.2B 3 SERIES A PREFERRED STOCK Exhibit A 6.05. Series A Preferred Stock. Pursuant to authority granted under Section 6.01 of the Corporation's Amended and Restated Articles of Incorporation (the "Articles of Incorporation"), the Board of Directors of the Corporation hereby establishes a series of preferred shares designated the 9.10% Series A Cumulative Redeemable Preferred Shares ($0.01 Par Value Per Share) (Liquidation Preference $250.00 Per Share) (the "Series A Preferred Shares") on the following terms: (a) Number. The number of authorized shares of the Series A Preferred Shares shall be 460,000. (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 Corporation, the Series A Preferred Shares shall rank senior to the Common Shares and any other class or series of shares of the Corporation ranking, as to dividends and upon liquidation, junior to the Series A Preferred Shares (collectively, "Junior Shares"). (c) Dividends. (1) The holders of the then outstanding Series A Preferred Shares shall be entitled to receive, when and as declared by the Board of Directors out of any funds legally available therefor, cumulative dividends at the rate of $22.75 per share per year, payable in equal amounts of $5.6875 per share quarterly in cash on the last day of each February, May, August and November or, if not a Business Day (as hereinafter defined), the next succeeding Business Day beginning on December 2, 1996 (each such day being hereinafter called a "Quarterly Dividend Date" and each period ending on a Quarterly Dividend Date being hereinafter called a "Dividend Period"). Dividends shall be payable to holders of record as they appear in the share records of the Corporation at the close of business on the applicable record date (the "Record Date"), which shall be the first day of the calendar month in which the applicable Quarterly Dividend Date falls on or such other date designated by the Board of Directors of the Corporation for the payment of dividends that is not more than 30 nor less than 10 days prior to such Quarterly Dividend Date. The amount of any dividend payable for any Dividend Period shorter than a full Dividend Period shall be prorated and computed on the basis of a 360-day year of twelve 30-day months. Dividends on each share of Series A Preferred Shares shall accrue and be cumulative from and including the date of original issue thereof, whether or not (i) dividends on such shares are earned or declared or (ii) on any Quarterly Dividend Date there shall be funds legally available for the payment of dividends. Dividends paid on the Series A Preferred Shares in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a per share basis among all such shares at the time outstanding. "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 dividends accrued on any Series A Preferred Shares at any Quarterly Dividend Date shall be the amount of any unpaid dividends accumulated thereon, to and including such Quarterly Dividend Date, whether or not earned or declared, and the amount of dividends accrued on any shares of Series A Preferred Shares at any date other than a Quarterly Dividend Date shall be equal to the sum of the amount of any unpaid dividends accumulated thereon, to and including the last preceding Quarterly Dividend Date, whether or not earned or declared, plus an amount calculated on the basis of the annual dividend rate of $22.75 per share for the period after such last preceding Quarterly Dividend 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 6.05, the Series A Preferred Shares shall not be entitled to participate in the earnings or assets of the Corporation. (4) Any dividend payment made on the Series A Preferred Shares shall be first credited against the earliest accrued but unpaid dividend due with respect to such shares which remains payable. (5) If, for any taxable year, the Company elects to designate as "capital gain dividends" (as defined in Section 857 of the Code), any portion (the "Capital Gains Amount") of the dividends paid or made available for the year to holders of all classes of Shares (the "Total Dividends"), then the portion of the Capital Gains Amount that shall be allocated to the holders of the Series A Preferred Shares shall be the amount that the total dividends paid or made available to the holders of the Series A Preferred Shares for the year bears to the Total Dividends. (d) Liquidation Rights. (1) Upon the voluntary or involuntary dissolution, liquidation or winding up of the Corporation, the holders of the Series A Preferred Shares then outstanding shall be entitled to receive and to be paid out of the assets of the Corporation available for distribution to its shareholders, before any payment or distribution shall be made on any Junior Shares, the amount of $250.00 per share, plus accrued and unpaid dividends thereon. (2) After the payment to the holders of the Series A Preferred Shares of the full preferential amounts provided for in this Section 6.05, the holders of the Series A Preferred Shares, as such, shall have no right or claim to any of the remaining assets of the Corporation. (3) If, upon any voluntary or involuntary dissolution, liquidation, or winding up of the Corporation, the amounts payable with respect to the preference value of the Series A Preferred Shares and any other shares of the Corporation ranking as to any such distribution on a parity with the Series A Preferred Shares are not paid in full, the holders of the Series A Preferred Shares and of such other shares will share ratably in any such distribution of assets of the Corporation in proportion to the full respective preference amounts to which they are entitled. (4) Neither the sale of all or substantially all of the property or business of the Corporation, nor the merger or consolidation of the Corporation into or with any other entity or the merger or consolidation of any other entity into or with the Corporation, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 6.05. (e) Redemption. (1) Optional Redemption. On and after August 31, 2001, the Corporation may, at its option, redeem at any time all or, from time to time, part of the Series A Preferred Shares at a price per share (the "Series A Redemption Price"), payable in cash, of $250.00, together with all accrued and unpaid dividends to and including the date fixed for redemption (the "Series A Redemption Date"). (2) Procedures of Redemption. (i) Notice of any redemption will be mailed by the Corporation, postage prepaid, not less than 30 nor more than 60 days prior to the Series A Redemption Date, addressed to each holder of record of the Series A Preferred Shares to be redeemed at the address set forth in the share transfer records of the Corporation. 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 A Preferred Shares except as to the holder to whom the Corporation has failed to give notice or except as to the holder to whom notice was defective. In addition to any information required by law or by the applicable rules of any exchange upon which Series A Preferred Shares (or depositary shares or receipts representing fractional interests in Series A Preferred Shares) may be listed or admitted to trading, such notice shall state: (a) the Series A Redemption Date; (b) the Series A Redemption Price; (c) the number of Series A Preferred Shares to be redeemed; (d) the place or places where certificates for such shares are to be surrendered for payment of the Series A Redemption Price; and (e) that dividends on the shares to be redeemed will cease to accumulate on the Series A Redemption Date. (ii) If notice has been mailed in accordance with subparagraph (e)(2)(i) above and provided that on or before the Series A Redemption Date specified in such notice all funds necessary for such redemption shall have been irrevocably set aside by the Corporation, separate and apart from its other funds in trust for the pro rata benefit of the holders of the Series A Preferred Shares so called for redemption, so as to be, and to continue to be available therefor, then, from and after the Series A Redemption Date, dividends on the Series A Preferred Shares so called for redemption shall cease to accumulate, and said shares shall no longer be deemed to be outstanding and shall not have the status of Series A Preferred Shares and all rights of the holders thereof as shareholders of the Corporation (except the right to receive the Series A Redemption Price) shall cease. Upon surrender, in accordance with such notice, of the certificates for any Series A Preferred Shares so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and the notice shall so state), such Series A Preferred Shares shall be redeemed by the Corporation at the Series A Redemption Price. In case fewer than all the Series A Preferred Shares represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed Series A Preferred Shares without cost to the holder thereof. (iii) Any funds deposited with a bank or trust company for the purpose of redeeming Series A Preferred Shares shall be irrevocable except that: (A) the Corporation 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 the holders of any shares redeemed shall have no claim to such interest or other earnings; and (B) any balance of monies so deposited by the Corporation and unclaimed by the holders of the Series A Preferred Shares entitled thereto at the expiration of two years from the Applicable Series A Redemption Date shall be repaid, together with any interest or other earnings earned thereon, to the Corporation, and after any such repayment, the holders of the shares entitled to the funds so repaid to the Corporation shall look only to the Corporation for payment without interest or other earnings. (iv) No Series A Preferred Shares may be redeemed except from proceeds from the sale of other capital stock of the Company, including but not limited to common stock, preferred stock, depositary shares, interests, participations or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing. (v) Unless full accumulated dividends on all Series A Preferred Shares shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past Dividend Periods and the then current Dividend Period, no Series A Preferred Shares shall be redeemed or purchased or otherwise acquired directly or indirectly (except by conversion into or exchange for Junior Shares); provided, however, that the foregoing shall not prevent the redemption of Series A Preferred Shares pursuant to this Section 6.05 or the purchase or acquisition of Series A Preferred Shares pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred A Shares. (vi) If the Series A Redemption Date is after a Record Date and before the related Quarterly Dividend Date, the dividend payable on such Quarterly Dividend Date shall be paid to the holder in whose name the Series A Preferred Shares to be redeemed are registered at the close of business on such Record Date notwithstanding the redemption thereof between such Record Date and the related Quarterly Dividend Date or the Corporation's default in the payment of the dividend due. (vii) In case of redemption of less than all Series A Preferred Shares at the time outstanding, the Series A Preferred Shares to be redeemed shall be selected prorata from the holders of record of such shares in proportion to the number of Series A Preferred Shares held by such holders (with adjustments to avoid redemption of fractional shares) or by any other equitable method determined by the Corporation. (f) Voting Rights. Except as required by law, and as set forth below, the holders of the Series A Preferred Shares shall not be entitled to vote at any meeting of the shareholders for election of Directors or for any other purpose or otherwise to participate in any action taken by the Corporation or the shareholders thereof, or to receive notice of any meeting of shareholders. (1) Whenever dividends on any Series A Preferred Shares shall be in arrears for six or more quarterly periods, whether or not such quarterly periods are consecutive, the holders of such Series A Preferred Shares (voting separately as a class with all other series of preferred shares upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of two additional Directors of the Corporation at a special meeting called by the holders of Record of at least ten percent (10%) of any series of preferred shares so in arrears (unless such request is received less than 90 days before the date fixed of for the next annual or special meeting of the shareholders) or at the next annual meeting of shareholders, and at each subsequent annual meeting until all dividends accumulated on such Series A Preferred Shares for the past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set aside for payment. In such case, the entire Board of Directors of the Corporation will be increased by two Directors. (2) So long as any Series A Preferred Shares remain outstanding, the Corporation will not, without the affirmative vote or consent of the holders of at least two-thirds of the Series A Preferred Shares 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 shares of beneficial interest ranking prior to the Series A Preferred Shares with respect to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any authorized shares of the Corporation into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (ii) amend, alter or repeal the provisions of the Corporation's Articles of Incorporation, 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 A Preferred Shares 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 A Preferred Shares remain outstanding with the terms thereof materially unchanged, taking into account that upon the occurrence of an Event, the Corporation 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 A Preferred Shares and provided further that (x) any increase in the amount of the authorized Preferred Shares or the creation or issuance of any other Series A Preferred Shares, or (u) any increase in the amount of authorized Series A Preferred Shares or any other preferred shares, in each case ranking on a parity with or junior to the Series A Preferred Shares with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding Series A Preferred Shares shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption. (3) On each matter submitted to a vote of the holders of Series A Preferred Shares in accordance with this Section 6.05, or as otherwise required by law, each Series A Preferred Share shall be entitled to ten (10) votes, each of which ten (10) votes may be directed separately by the holder thereof. With respect to each Series A Preferred Share, the holder thereof may designate up to ten (10) proxies, with each such proxy having the right to vote a whole number of votes (totaling ten (10) votes per Series A Preferred Share). (g) Conversion. The Series A Preferred Shares are not convertible into or exchangeable for any other property or securities of the Corporation. EX-3.3 4 JUNE 12, 1997 AMENDMENT ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF DUKE REALTY INVESTMENTS, INC. The undersigned officer of Duke Realty Investments, Inc. (the "Corporation"), existing pursuant to the Indiana Business Corporation Law, as amended (the "Act"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, certifies the following facts: ARTICLE I AMENDMENTS SECTION 1. The date of incorporation of the Corporation is March 12, 1992. SECTION 2. The name of the Corporation following this amendment to the Articles of Incorporation is Duke Realty Investments, Inc. SECTION 3. The exact text of Article V of the Articles of Incorporation is now as follows: The total number of shares of capital stock which this corporation shall have authority to issue is one hundred fifty-five million (155,000,000), of which one hundred fifty million (150,000,000) shall be common stock having a par value of $.01 per share, and five million (5,000,000) shall be serial preferred stock having a par value of $.01 per share. ARTICLE II MANNER OF ADOPTION AND VOTE SECTION 1. Action by Directors. The Board of Directors of the Corporation duly adopted a resolution proposing to amend the terms and provisions of Article V of the Articles of Incorporation and directing a meeting of the Shareholders, allowing such shareholders to vote on the proposed amendment. SECTION 2. Action by Shareholders. The Shareholders of the Corporation entitled to vote adopted the proposed Amendment during the annual meeting as called by the Board of Directors. The result of such vote was as follows:
NUMBER OF OUTSTANDING SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE 31,437,846 SHARES ENTITLED TO VOTE: 31,437,846 SHARES REPRESENTED AT THE MEETING: 26,167,822 SHARES VOTED IN FAVOR: 21,479,543 SHARES VOTED AGAINST: 4,461,187 ABSTENTIONS: 77,088 SECTION 3. Compliance with Legal Requirements. The manner of adoption of the Articles of Amendment and the vote by which they were adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. Executed this 23rd day of May, 1997. /s/ Dennis D. Oklak ------------------------------ Dennis D. Oklak, Vice President and Treasurer
EX-3.4 5 JULY 11, 1997 AMENDMENT ARTICLES OF AMENDMENT OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF DUKE REALTY INVESTMENTS, INC. The undersigned officer of DUKE REALTY INVESTMENTS, INC. (the "Corporation"), existing pursuant to the provisions of INDIANA BUSINESS CORPORATION LAW (IND. CODE 23-1 ET SEQ.), AS AMENDED (the "Act") and desiring to give notice of corporate action effectuating amendment of certain provisions of its Amended and Restated Articles of Incorporation certify the following facts: ARTICLE I - AMENDMENT SECTION 1: The date of incorporation of the Corporation is: MARCH 12, 1992 SECTION 2: The name of the Corporation following this amendment of its Amended and Restated Articles of Incorporation is: DUKE REALTY INVESTMENTS, INC. SECTION 3: The exact text to Article VI of the Amended and Restated Articles of Incorporation is amended to add Section 6.05 as follows: SEE ATTACHED EXHIBIT A --------- This Amendment is to be effective at 12:01 a.m. on July 11, 1997. ARTICLE II-MANNER OF ADOPTION AND VOTE SECTION 1: Action by Directors: The Board of Directors of the Corporation duly adopted resolutions amending Article VI of the Amended and Restated Articles of Incorporation. These resolutions were adopted at meetings duly held on April 25, 1996, January 9, 1997 and July 7, 1997 at which quorums were present. SECTION 2: Action by Shareholders: Pursuant to I.C. 23-1-25-2(d), the Shareholders of the Corporation were not required to vote with respect to this amendment to the Amended and Restated Articles of Incorporation. SECTION 3: Compliance with legal requirements: The manner of the adoption of the Articles of Amendment and the vote by which they were adopted constitute full legal compliance with the provisions of the Act, the Amended and Restated Articles of Incorporation, and the Code of By-Laws of the Corporation. I hereby verify, subject to penalties for perjury, that the facts contained herein are true this 10th day of July, 1997. /s/ Dennis D. Oklak --------------------------------- Dennis D. Oklak, Vice President and Treasurer EX-3.4B 6 SERIES B PREFERRED STOCK Exhibit A 6.05. Series B Preferred Stock. Pursuant to authority granted under Section 6.01 of the Corporation's Amended and Restated Articles of Incorporation (the "Articles of Incorporation"), the Board of Directors of the Corporation hereby establishes a series of preferred shares designated the 7.99% Series B Cumulative Step- Up Premium Rate Preferred Shares ($0.01 Par Value Per Share) (Liquidation Preference $500.00 Per Share) (the "Series B Preferred Shares") on the following terms: (a) Number. The number of authorized shares of the Series B Preferred Shares shall be 300,000. (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 Corporation, the Series B Preferred Shares shall rank senior to the Common Shares and any other class or series of shares of the Corporation ranking, as to dividends and upon liquidation, junior to the Series B Preferred Shares (collectively, "Junior Shares"). (c) Dividends. (1) The holders of the then outstanding Series B Preferred Shares shall be entitled to receive, when and as declared by the Board of Directors out of any funds legally available therefore, cumulative dividends at an initial rate of $39.95 per share per year, payable in equal amounts of $9.9875 per share 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 September 30, 1997 (each such day being hereinafter called a "Quarterly Dividend Date" and each period ending on a Quarterly Dividend Date being hereinafter called a "Dividend Period"); provided, however, that beginning with each Quarterly Dividend Date after October 1, 2012, the rate shall increase to $49.95 per Series B Preferred Share per year, payable in equal amounts of $12.4875 on each Quarterly Distribution Date. Dividends shall be payable to holders of record as they appear in the share records of the Corporation at the close of business on the applicable record date (the "Record Date"), which shall be the first day of the calendar month in which the applicable Quarterly Dividend Date falls on or such other date designated by the Board of Directors of the Corporation for the payment of dividends that is not more than 30 nor less than 10 days prior to such Quarterly Dividend Date. The amount of any dividend payable for any Dividend Period shorter than a full Dividend Period shall be prorated and computed on the basis of a 360-day year of twelve 30-day months. Dividends on each share of Series B Preferred Shares shall accrue and be cumulative from and including the date of original issue thereof, whether or not (i) dividends on such shares are earned or declared or (ii) on any Quarterly Dividend Date there shall be funds legally available for the payment of dividends. Dividends paid on the Series B Preferred Shares in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a per share basis among all such shares at the time outstanding. "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 dividends accrued on any Series B Preferred Shares at any Quarterly Dividend Date shall be the amount of any unpaid dividends accumulated thereon, to and including such Quarterly Dividend Date, whether or not earned or declared, and the amount of dividends accrued on any shares of Series B Preferred Shares at any date other than a Quarterly Dividend Date shall be equal to the sum of the amount of any unpaid dividends accumulated thereon, to and including the last preceding Quarterly Dividend Date, whether or not earned or declared, plus an amount calculated on the basis of the annual dividend rate of $39.95 per share with respect to a Quarterly Dividend Date on or before October 1, 2012 and $49.95 per share with respect to a Quarterly Dividend Date after October 1, 2012, and in either case, for the period after such last preceding Quarterly Dividend 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 6.06, the Series B Preferred Shares shall not be entitled to participate in the earnings or assets of the Corporation. (4) Any dividend payment made on the Series B Preferred Shares shall be first credited against the earliest accrued but unpaid dividend due with respect to such shares which remains payable. (5) If, for any taxable year, the Company elects to designate as "capital gain dividends" (as defined in Section 857 of the Code), any portion (the "Capital Gains Amount") of the dividends paid or made available for the year to holders of all classes of Shares (the "Total Dividends"), then the portion of the Capital Gains Amount that shall be allocated to the holders of the Series B Preferred Shares shall be the amount that the total dividends paid or made available to the holders of the Series B Preferred Shares for the year bears to the Total Dividends. (d) Liquidation Rights. (1) Upon the voluntary or involuntary dissolution, liquidation or winding up of the Corporation, the holders of the Series B Preferred Shares then outstanding shall be entitled to receive and to be paid out of the assets of the Corporation available for distribution to its shareholders, before any payment or distribution shall be made on any Junior Shares, the amount of $500.00 per share, plus accrued and unpaid dividends thereon. (2) After the payment to the holders of the Series B Preferred Shares of the full preferential amounts provided for in this Section 6.06, the holders of the Series B Preferred Shares, as such, shall have no right or claim to any of the remaining assets of the Corporation. (3) If, upon any voluntary or involuntary dissolution, liquidation, or winding up of the Corporation, the amounts payable with respect to the preference value of the Series B Preferred Shares and any other shares of the Corporation ranking as to any such distribution on a parity with the Series B Preferred Shares are not paid in full, the holders of the Series B Preferred Shares and of such other shares will share ratably in any such distribution of assets of the Corporation in proportion to the full respective preference amounts to which they are entitled. (4) Neither the sale of all or substantially all of the property or business of the Corporation, nor the merger or consolidation of the Corporation into or with any other entity or the merger or consolidation of any other entity into or with the Corporation, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 6.06. (e) Redemption. (1) Optional Redemption. On and after September 30, 2007, the Corporation may, at its option, redeem at any time all or, from time to time, part of the Series B Preferred Shares at a price per share (the "Series B Redemption Price"), payable in cash, of $500.00, together with all accrued and unpaid dividends to and including the date fixed for redemption (the "Series B Redemption Date"). (2) Procedures of Redemption. (i) Notice of any redemption will be mailed by the Corporation, postage prepaid, not less than 30 nor more than 60 days prior to the Series B Redemption Date, addressed to each holder of record of the Series B Preferred Shares to be redeemed at the address set forth in the share transfer records of the Corporation. 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 B Preferred Shares except as to the holder to whom the Corporation has failed to give notice or except as to the holder to whom notice was defective. In addition to any information required by law or by the applicable rules of any exchange upon which Series B Preferred Shares (or depositary shares or receipts representing fractional interests in Series B Preferred Shares) may be listed or admitted to trading, such notice shall state: (a) the Series B Redemption Date; (b) the Series B Redemption Price; (c) the number of Series B Preferred Shares to be redeemed; (d) the place or places where certificates for such shares are to be surrendered for payment of the Series B Redemption Price; and (e) that dividends on the shares to be redeemed will cease to accumulate on the Series B Redemption Date. (ii) If notice has been mailed in accordance with subparagraph (e)(2)(i) above and provided that on or before the Series B Redemption Date specified in such notice all funds necessary for such redemption shall have been irrevocably set aside by the Corporation, separate and apart from its other funds in trust for the pro rata benefit of the holders of the Series B Preferred Shares so called for redemption, so as to be, and to continue to be available therefor, then, from and after the Series B Redemption Date, dividends on the Series B Preferred Shares so called for redemption shall cease to accumulate, and said shares shall no longer be deemed to be outstanding and shall not have the status of Series B Preferred Shares and all rights of the holders thereof as shareholders of the Corporation (except the right to receive the Series B Redemption Price) shall cease. Upon surrender, in accordance with such notice, of the certificates for any Series B Preferred Shares so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and the notice shall so state), such Series B Preferred Shares shall be redeemed by the Corporation at the Series B Redemption Price. In case fewer than all the Series B Preferred Shares represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed Series B Preferred Shares without cost to the holder thereof. (iii) Any funds deposited with a bank or trust company for the purpose of redeeming Series B Preferred Shares shall be irrevocable except that: (A) the Corporation 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 the holders of any shares redeemed shall have no claim to such interest or other earnings; and (B) any balance of monies so deposited by the Corporation and unclaimed by the holders of the Series B Preferred Shares entitled thereto at the expiration of two years from the applicable Series B Redemption Date shall be repaid, together with any interest or other earnings earned thereon, to the Corporation, and after any such repayment, the holders of the shares entitled to the funds so repaid to the Corporation shall look only to the Corporation for payment without interest or other earnings. (iv) No Series B Preferred Shares may be redeemed except from proceeds from the sale of other capital stock of the Company, including but not limited to common stock, preferred stock, depositary shares, interests, participations or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing. (v) Unless full accumulated dividends on all Series B Preferred Shares shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past Dividend Periods and the then current Dividend Period, no Series B Preferred Shares shall be redeemed or purchased or otherwise acquired directly or indirectly (except by conversion into or exchange for Junior Shares); provided, however, that the foregoing shall not prevent the redemption of Series B Preferred Shares pursuant to this Section 6.06 or the purchase or acquisition of Series B Preferred Shares pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series B Preferred A Shares. (vi) If the Series B Redemption Date is after a Record Date and before the related Quarterly Dividend Date, the dividend payable on such Quarterly Dividend Date shall be paid to the holder in whose name the Series A Preferred Shares to be redeemed are registered at the close of business on such Record Date notwithstanding the redemption thereof between such Record Date and the related Quarterly Dividend Date or the Corporation's default in the payment of the dividend due. (vii) In case of redemption of less than all Series B Preferred Shares at the time outstanding, the Series B Preferred Shares to be redeemed shall be prorata from the holders of record of such shares in proportion to the number of Series B Preferred Shares held by such holders (with adjustments to avoid redemption of fractional shares) or by any other equitable method determined by the Corporation. (f) Voting Rights. Except as required by law, and as set forth below, the holders of the Series B Preferred Shares shall not be entitled to vote at any meeting of the shareholders for election of Directors or for any other purpose or otherwise to participate in any action taken by the Corporation or the shareholders thereof, or to receive notice of any meeting of shareholders. (1) Whenever dividends on any Series B Preferred Shares shall be in arrears for six or more quarterly periods, whether or not such quarterly periods are consecutive, the holders of such Series B Preferred Shares (voting separately as a class with all other series of preferred shares upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of two additional Directors of the Corporation at a special meeting called by the holders of Record of at least ten percent (10%) of any series of preferred shares so in arrears (unless such request is received less than 90 days before the date fixed of for the next annual or special meeting of the shareholders) or at the next annual meeting of shareholders, and at each subsequent annual meeting until all dividends accumulated on such Series B Preferred Shares for the past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set aside for payment. In such case, the entire Board of Directors of the Corporation will be increased by two Directors. (2) So long as any Series B Preferred Shares remain outstanding, the Corporation will not, without the affirmative vote or consent of the holders of at least two-thirds of the Series B Preferred Shares 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 shares of beneficial interest ranking prior to the Series B Preferred Shares with respect to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any authorized shares of the Corporation into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (ii) amend, alter or repeal the provisions of the Corporation's Articles of Incorporation, 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 B Preferred Shares 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 B Preferred Shares remain outstanding with the terms thereof materially unchanged, taking into account that upon the occurrence of an Event, the Corporation 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 B Preferred Shares and provided further that (x) any increase in the amount of the authorized Preferred Shares or the creation or issuance of any other Series B Preferred Shares, or (u) any increase in the amount of authorized Series B Preferred Shares or any other preferred shares, in each case ranking on a parity with or junior to the Series B Preferred Shares with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding Series B Preferred Shares shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption. (3) On each matter submitted to a vote of the holders of Series B Preferred Shares in accordance with this Section 6.06, or as otherwise required by law, each Series B Preferred Share shall be entitled to ten (10) votes, each of which ten (10) votes may be directed separately by the holder thereof. With respect to each Series B Preferred Share, the holder thereof may designate up to ten (10) proxies, with each such proxy having the right to vote a whole number of votes (totaling ten (10) votes per Series B Preferred Share). (g) Conversion. The Series B Preferred Shares are not convertible into or exchangeable for any other property or securities of the Corporation. EX-3.6 7 OCTOBER 23, 1997 AMENDMENT DUKE REALTY INVESTMENTS, INC. AMENDMENT OF AMENDED AND RESTATED BY-LAWS RESOLVED, That Section 5.08 of the Amended and Restated By-Laws of Duke Realty Investments, Inc. is amended to read as follows: Section 5.08. Number of Directors and Classification ----------------------------------------------------- of Board of Directors. (a) The number of Directors shall be twelve (12). (b) There shall be three (3) classes of Directors, each class to be as nearly equal in number as possible. The Directors of one class have been elected for a term expiring in 1998; the Directors of a second class have been elected for a term expiring in 1999; and the Directors of a third class have been elected for a term expiring in 2000. At each annual meeting of the shareholders, one (1) class of Directors shall be elected for a term of three (3) years, or until their successors have been duly elected and qualified, to replace those Directors whose terms expire at such annual meeting. EX-10.3 8 FOURTH AMENDMENT TO BY-LAWS FOURTH 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 4.14 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., July 11, 1997. DUKE REALTY INVESTMENTS, INC., as General Partner By: /s/ Dennis D. Oklak ------------------------- Dennis D. Oklak Vice President and Treasurer Exhibit A SECTION 4.14. SERIES B 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 7.99% Series B Cumulative Step-Up Premium Rate Preferred Units (Liquidation Preference $500.00 Per Unit) (the "Series B Preferred Units") on the following terms: (a) Number and Holder. The number of Series B Preferred Units ----------------- shall not exceed 345,000 and shall at all times be equal to the number of 7.99% Series B Cumulative Step-Up Premium Rate Preferred Shares ("Series B Preferred Shares") issued by the General Partner and then outstanding. Series B Preferred Units shall be issued only to and held only by the General Partner. (b) Relative Seniority. In respect of rights to receive ------------------ Distributions of Distributable Cash pursuant to Section 4.03 and to participate in Distributions or payments in the event of any liquidation or termination of the Partnership pursuant to Section 4.04, the Series B 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 B Preferred Units (collectively, "Junior Units"). In the event of Distributions from a Terminating Capital Transaction pursuant to Section 4.04, Distributions to the holder of Series B 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 B 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 the initial rate of $39.95 per Series B Preferred Unit per year, payable in equal amounts of $9.9875 per Series B Preferred 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 succeeding Business Day, beginning on September 30, 1997 (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"); provided, however, that beginning with Quarterly Distribution Dates after October 1, 2012, the rate shall increase to $49.95 per Series B Preferred Unit per year, payable in equal amounts of $12.4875 on each Quarterly Distribution Date. Distributions shall be payable to the General Partner as holder of the Series B Preferred Units. 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 share of Series B Preferred Units shall accrue and be cumulative from and including the date of original issue thereof, whether or not (i) Distributions on such Units are earned or declared or (ii) on any Quarterly Distribution Date there shall be funds legally available for the payment of Distributions. Distributions paid on the Series B Preferred Units in an amount less than the total amount of such Distributions at the time accrued and payable on such Series B Preferred Units shall be allocated pro rata on a per Unit basis among all such Series B Preferred Units at the time outstanding. "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 B 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 Series B 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 $39.95 per Series B Preferred Unit with respect to a Quarterly Distribution Date on or before October 1, 2012 and $49.95 per Series B Preferred Unit with respect to a Quarterly Distribution Date after October 1, 2012, and in either case, 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 4.14, the Series B Preferred Units shall not be entitled to participate in the earnings or assets of the Partnership. (4) Any Distribution payment made on the Series B Preferred Units shall be first credited against the earliest accrued but unpaid Distribution due with respect to such Series B Preferred Units which remains payable. (5) All Distributions made on the Series B Preferred Units shall result in a corresponding reduction to the Capital Accounts of the holders of such Series B Preferred Units. (d) Liquidation Rights. ------------------ (1) Upon the voluntary or involuntary dissolution and liquidation or winding up of the Partnership, the holders of the Series B Preferred Units then outstanding shall be entitled to receive and to be paid out of the assets of the Partnership available for Distribution to its Partners, before any payment or Distribution shall be made on any Junior Units, the amount of $500.00 per Series B Preferred Unit, plus accrued and unpaid Distributions thereon. Such Distributions shall result in a corresponding reduction to the Capital Accounts of the holders of such Series B Preferred Units. (2) After the payment to the holders of the Series B Preferred Units of the full preferential amounts provided for in this Section 4.14, the holders of the Series B 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 and liquidation or winding up of the Partnership, the amounts payable with respect to the preference value of the Series B Preferred Units and any other Units of the Partnership ranking as to any such Distribution on a parity with the Series B Preferred Units are not paid in full, the holders of the Series B 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 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 voluntary or involuntary dissolution and liquidation or winding up for the purposes of this Section 4.14. (e) Redemption. ---------- (1) Redemption. The General Partner shall cause the ---------- Partnership to redeem one Series B Preferred Unit for each Series B Preferred Share redeemed by the General Partner, at a price per Series B Preferred Unit (the "Series B Redemption Price"), payable in cash, of $500.00, together with all accrued and unpaid Distributions to and including the date fixed for redemption of such Series B Preferred Shares (the "Series B Redemption Date"). (2) Procedures of Redemption.. ------------------------ (i) Provided that on or before the Series B Redemption Date all funds necessary for the redemption by the General Partner of the associated Series B Preferred Shares shall have been irrevocably set aside by the General Partner or the Partnership, separate and apart from its other funds in trust for the pro rata benefit of the General Partner as holder of the Series B Preferred Units to be redeemed, so as to be, and to continue to be available therefor, then, from and after the Series B Redemption Date, Distributions on the Series B Preferred Units to be redeemed shall cease to accumulate, and said Series B Preferred Units shall no longer be deemed to be outstanding and shall not have the status of Series B Preferred Units and all rights of the General Partner as the holder thereof (except the right to receive the Series B Redemption Price) shall cease. Upon surrender of the certificates for any Series B Preferred Units so redeemed (properly endorsed or assigned for transfer, if the Partnership shall so require), such Series B Preferred Units shall be redeemed by the Partnership at the Series B Redemption Price. In case fewer than all the Series B Preferred Units represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed Series B Preferred Units without cost to the General Partner as holder thereof. (ii) Any funds deposited with a bank or trust company for the purpose of redeeming Series B Preferred Units shall be irrevocable except that: (A) the Partnership or the General Partner, as the case may be, as depositor of the funds 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 the General Partner as holder of any Series B Preferred Units redeemed shall have no claim to such interest or other earnings; and (B) any balance of monies so deposited and unclaimed by the General Partner as holder of the Series B Preferred Units entitled thereto at the expiration of two years from the applicable Series B 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 any Series B Preferred Units entitled to the funds so repaid to the Partnership shall look only to the Partnership for payment without interest or other earnings. (iii) Unless full accumulated Distributions on all Series B 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 B Preferred Units shall be redeemed or purchased or otherwise acquired directly or indirectly (except by conversion into or exchange for Junior Units); provided, however, that the foregoing shall not prevent the redemption of Series B Preferred Units pursuant to this Section 4.14 or the purchase or acquisition of Series B Preferred Units pursuant to a purchase or exchange offer made to the General Partner as the sole holder of all outstanding Series B Preferred Units. (iv) If the Series B Redemption Date is after a record date for payment of dividends on the Series B Preferred Shares and before the related Quarterly Distribution Date, the Distribution payable on such Quarterly Distribution Date shall be paid to the General Partner notwithstanding the redemption of the Series B Preferred Units between such record date and the related Quarterly Distribution Date or the Partnership's default in the payment of the Distribution due. (f) Voting Rights. Except as required by law, and as set forth ------------- below, the holders of the Series B 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 holders of Units, or to receive notice of any meeting of holders of Units. Accordingly, any calculation in connection with Special Partner Approval or any matter requiring the approval of a specified number or percentage of Units shall be made without regard to the Series B Preferred Units. (1) So long as any Series B Preferred Units remain outstanding, the Partnership will not, without the affirmative vote or consent of the General Partner as holder of the Series B Preferred Units, (i) authorize or create, or increase the authorized or issued amount of, any class or series of Units ranking prior to the Series B Preferred Units with respect to the payment of Distributions or the Distribution of assets upon liquidation 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 B Preferred Units or the General Partner as holder thereof; provided, however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series B 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 the General Partner as the holder of Series B 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 B Preferred Units, or (u) any increase in the amount of authorized Series B Preferred Units or any other preferred Units, in each case ranking on a parity with or junior to the Series B Preferred Units with respect to payment of Distributions or the distribution of assets upon liquidation or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. (2) 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 B Preferred Units shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption. (g) Conversion. The Series B Preferred Units are not ---------- convertible into or exchangeable for any other property or securities of the Partnership. (h) Allocation of Profits and Losses. -------------------------------- (1) Notwithstanding the allocation provisions in Section 4.05, for each fiscal year of the Partnership, Profits shall first be allocated to the holders of Series B Preferred Units in an amount equal to the amount of Distributions to which the holders of such units are entitled pursuant to Section 4.14(c). To the extent insufficient Profits exist for such purposes in a fiscal year, Profits in the next succeeding fiscal year shall first be allocated to holders of Series B Preferred Units to eliminate such deficiency until such holders have been allocated cumulative Profits equal to one hundred percent (100%) of the Distributions both current and cumulative to which such holders are entitled. (2) Notwithstanding the allocation provisions contained in Section 4.05, in the event of a Terminating Capital Transaction in which the Partnership is liquidated, Losses shall be allocated to the holders of Series B Preferred Units if, and only if, after the reduction of all other Partners' Capital Accounts to zero, remaining Losses exist, but only to the extent of the positive balances in the Capital Accounts of such holders. (3) Subject to the provisions of Section 4.08, the holders of Series B Preferred Units shall be allocated their pro rata share of each item of Profit and Loss of the Partnership based upon the percentage of all Profits and Losses of the Partnership allocated to such holders. (4) All determinations of Percentage Shares shall be made without regard to Series B Preferred Units. EX-21 9 LIST OF SUBSIDIARIES EXHIBIT 21 SUBSIDIARIES OF DUKE REALTY INVESTMENTS, INC. State of Names Under Which Incorporation Subsidiary Does Subsidiary or Organization Business -------------------------------- --------------- ------------------------ Duke Realty Limited Partnership Indiana Duke Realty Limited Partnership Duke Services, Inc. Indiana Duke Services, Inc. Duke Realty Services Limited Indiana Duke Realty Services Partnership Limited Partnership Duke Realty Construction, Inc. Indiana Duke Realty Construction, Inc. Duke Construction Limited Indiana Duke Construction Partnership Limited Partnership B/D Limited Partnership Indiana B/D Limited Partnership Lamida Partners Limited Ohio Lamida Partners Limited Partnership Partnership Kenwood Office Associates Ohio Kenwood Office Associates Park Creek Venture Indiana Park Creek Venture Parkrite Limited Partnership Indiana Parkrite Limited Partnership Post Road Limited Partnership Indiana Post Road Limited Partnership Shadeland Station Office Indiana Shadeland Station Office Associates II Limited Partnership Associates II Limited Partnership Dugan Realty L.L.C. Indiana Dugan Realty L.L.C. Duke/Tees Joint Venture Indiana Duke/Tees J.V. Park Fletcher Limited Indiana Park Fletcher 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. EX-23 10 AUDITOR'S CONSENT The Board of Directors DUKE REALTY INVESTMENTS, INC.: We consent to incorporation by reference in the registration statements No. 33-64567, No. 33-64659, No. 333-26845, No. 333- 24289, 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 28, 1998, relating to the consolidated balance sheets of Duke Realty Investments, Inc. and Subsidiaries as of December 31, 1997 and 1996, 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, 1997, and the related schedule, which report appears in the December 31, 1997, annual report on Form 10- K of Duke Realty Investments, Inc. KPMG Peat Marwick LLP Indianapolis, Indiana March 17, 1998 EX-24 11 POWERS OF ATTORNEY OF BOARD MEMBERS 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, 1997, 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 28, 1998 /s/ Edward T. Baur ------------------- 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, 1997, 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 28, 1998 /s/ Geoffrey Button -------------------- 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, 1997, 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 28, 1998 /s/ Ngaire E.Cuneo ------------------- 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, 1997, 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 28, 1998 /s/ Howard L. Feinsand ---------------------- 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, 1997, 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 28, 1998 /s/ L. Ben Lytel ---------------------- 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, 1997, 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 28, 1998 /s/ John D. Peterson ----------------------------- 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, 1997, 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 28, 1998 /s/ James E. Rogers ------------------- 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, 1997, 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 28, 1998 /s/ Lee Stanfield ----------------- Lee Stanfield 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, 1997, 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 28, 1998 /s/ Daniel C. Staton --------------------- 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, 1997, 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 28, 1998 /s/ Jay J. Strauss --------------------- 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, 1997, 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 28, 1998 /s/ John W. Wynne ----------------- 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, 1997, 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 28, 1998 /s/ Thomas L. Hefner ----------------------- 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, 1997, 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 28, 1998 /s/ Darell E. Zink, Jr. ----------------------- 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, 1997, 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 28, 1998 /s/ Dennis D. Oklak ------------------- 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, 1997 CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 10,353 0 44,639 (1,261) 0 54,250 2,176,727 (116,264) 2,176,214 114,050 720,119 0 218,338 1,016,343 0 2,176,214 0 256,029 128,504 0 21,230 0 40,296 65,999 0 65,699 0 0 0 65,999 $.99 $.98
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, 1997 and 1996 is as follows (in thousands, except per share amounts):
Quarter Ended ---------------------------------------------------- 1997 December 31 September 30 June 30 March 31 - ----------------------- ----------- ------------ --------- ---------- 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 1996 - ------------------------ Revenues from Rental Operations $ 46,451 $ 41,448 $ 37,724 $ 36,537 Revenues from Service Operations $ 5,404 $ 5,042 $ 5,137 $ 4,346 Net income available for common shares $ 15,447 $ 13,478 $ 12,299 $ 9,648 Basic income per common share (2) $ 0.26 $ 0.23 $ 0.21 $ 0.20 Diluted income per common share (2) $ 0. 26 $ 0.23 $ 0.21 $ 0.20 Weighted average common shares (2) 58,910 58,714 58,288 48,568 Weighted average common and dilutive potential common shares (2) 66,885 66,503 66,370 57,778 Funds From Operations (1) $ 20,966 $ 20,202 $ 19,088 $ 15,823 Cash flow provided by (used by): Operating activities $ 26,032 $ 29,987 $ 24,647 $ 14,469 Investing activities (74,241) (108,909) (13,733) (79,865) Financing activities 41,620 90,559 (22,718) 71,759
(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, unconsolidated partnerships and joint ventures (adjustments for minority interest, unconsolidated partnerships and joint ventures 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-----