UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER: 1-13274
MACK-CALI REALTY CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
MARYLAND 22-3305147
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
11 COMMERCE DRIVE, CRANFORD, NEW JERSEY 07016-3599
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(908) 272-8000
--------------
(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, $0.01 PAR VALUE NEW YORK STOCK EXCHANGE
PACIFIC EXCHANGE
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendments to this Form 10-K. [X]
As of February 15, 2001, the aggregate market value of the voting stock
held by non-affiliates of the registrant was $1,546,641,953. The aggregate
market value was computed with references to the closing price on the New
York Stock Exchange on such date. This calculation does not reflect a
determination that persons are affiliates for any other purpose.
As of February 15, 2001, 56,924,613 shares of common stock, $0.01 par
value, of the Company ("Common Stock") were outstanding.
LOCATION OF EXHIBIT INDEX: The index of exhibits is contained in Part IV
herein on page number 57.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant's
definitive proxy statement to be issued in conjunction with the registrant's
annual meeting of shareholders to be held on May 15, 2001 are incorporated by
reference in Part III of this Form 10-K.
3
TABLE OF CONTENTS
FORM 10-K
Page No.
--------
PART I
Item 1 Business ................................................................ 3
Item 2 Properties............................................................... 15
Item 3 Legal Proceedings........................................................ 44
Item 4 Submission of Matters to a Vote of Security Holders...................... 44
PART II
Item 5 Market for Registrant's Common Equity and Related Stockholder Matters.... 45
Item 6 Selected Financial Data.................................................. 46
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 47
Item 7a Quantitative and Qualitative Disclosures About Market Risk............... 56
Item 8 Financial Statements and Supplementary Data.............................. 56
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure............................................ 56
PART III
Item 10 Directors and Executive Officers of the Registrant....................... 57
Item 11 Executive Compensation................................................... 57
Item 12 Security Ownership of Certain Beneficial Owners and Management........... 57
Item 13 Certain Relationships and Related Transactions........................... 57
PART IV
Item 14 Exhibits, Financial Statements, Schedules and Reports on Form 8-K........ 57
2
PART I
ITEM 1. BUSINESS
GENERAL
Mack-Cali Realty Corporation, a Maryland corporation (together with its
subsidiaries, the "Company"), is a fully-integrated, self-administered and
self-managed real estate investment trust ("REIT") that owns and operates a
real estate portfolio comprised predominantly of Class A office and
office/flex properties located primarily in the Northeast. The Company performs
substantially all commercial real estate leasing, management, acquisition,
development and construction services on an in-house basis. Mack-Cali
Realty Corporation was incorporated on May 24, 1994. The Company's executive
offices are located at 11 Commerce Drive, Cranford, New Jersey 07016, and its
telephone number is (908) 272-8000. The Company has an internet website at
www.mack-cali.com.
As of December 31, 2000, the Company owned or had interests in 267
properties, aggregating approximately 28.2 million square feet (collectively,
the "Properties"), plus developable land. The Properties are comprised of:
(a) 255 wholly-owned or Company-controlled properties consisting of 155
office buildings and 87 office/flex buildings totaling approximately 26.3
million square feet, six industrial/warehouse buildings totaling
approximately 387,400 square feet, two multi-family residential complexes
consisting of 451 units, two stand-alone retail properties and three land
leases (collectively, the "Consolidated Properties"); and (b) eight office
buildings and four office/flex buildings aggregating 1.5 million square feet,
owned by unconsolidated joint ventures in which the Company has investment
interests. Unless otherwise indicated, all references to square feet
represent net rentable area. As of December 31, 2000, the office, office/flex
and industrial/warehouse properties included in the Consolidated Properties
were approximately 96.8 percent leased to over 2,400 tenants. The Properties
are located in 11 states, primarily in the Northeast, plus the District of
Columbia.
The Company's strategy has been to focus its acquisition, operation and
development of office properties in markets and sub-markets where it believes
it is, or can become, a significant and preferred owner and operator. The
Company will continue this strategy by expanding, through acquisitions and/or
development, in Northeast markets and sub-markets where it has, or can
achieve, similar status. The Company believes that its Properties have
excellent locations and access and are well-maintained and professionally
managed. As a result, the Company believes that its Properties attract high
quality tenants and achieve among the highest rental, occupancy and tenant
retention rates within their markets. Management believes that the recent
trend towards increasing rental rates in the Company's sub-markets continues
to present opportunities for internal growth. Management also believes that
its extensive market knowledge provides the Company with a significant
competitive advantage which is further enhanced by its strong reputation for,
and emphasis on, delivering highly responsive, professional management
services. See "Business Strategies".
As of December 31, 2000, executive officers and directors of the Company and
their affiliates owned approximately 10.9 percent of the Company's
outstanding shares of Common Stock (including Units redeemable or convertible
into shares of Common Stock). As used herein, the term "Units" refers to
limited partnership interests in Mack-Cali Realty, L.P., a Delaware limited
partnership ("Operating Partnership"), through which the Company conducts its
real estate activities. The Company's executive officers have been employed
by the Company and/or its predecessor companies for an average of
approximately 13 years.
3
BUSINESS STRATEGIES
OPERATIONS
REPUTATION: The Company has established a reputation as a highly-regarded
landlord with an emphasis on delivering quality tenant services in buildings
it owns and/or manages. The Company believes that its continued success depends
in part on enhancing its reputation as an operator of choice, which will
facilitate the retention of current tenants and the attraction of new tenants.
The Company believes it provides a superior level of service to its tenants,
which should in turn create higher than average occupancy rates, as well as
lower than average turnover.
COMMUNICATION WITH TENANTS: The Company emphasizes frequent communication
with tenants to ensure first-class service to the Properties. Property
managers generally are located on site at the Properties to provide
convenient access to management and to ensure that the Properties are
well-maintained. Property management's primary responsibility is to ensure
that buildings are operated at peak efficiency in order to meet both the
Company's and tenants' needs and expectations. Property managers additionally
budget and oversee capital improvements and building system upgrades to
enhance the Properties' competitive advantages in their markets.
Additionally, the Company's in-house leasing representatives develop and
maintain long-term relationships with the Company's diverse tenant base and
coordinate leasing, expansion, relocation and build-to-suit opportunities
within the Company's portfolio. This approach allows the Company to offer
office space in the appropriate size and location to current or prospective
tenants in any of its sub-markets.
GROWTH
The Company plans to continue to own and operate a portfolio of properties in
high-barrier-to-entry markets, with a primary focus in the Northeast and a
presence in California. The Company's primary objectives are to maximize funds
from operations and to enhance the value of its portfolio through effective
management, acquisition, development and property sales strategies, as follows:
INTERNAL GROWTH: The Company seeks to maximize the value of its existing
portfolio through implementing operating strategies designed to produce
increased effective rental and occupancy rates and decreased tenant
installation costs. The Company believes that it has opportunity for internal
growth through re-leasing space at higher effective rents with contractual
rent increases and developing or redeveloping space for its diverse base of
high credit tenants, including AT&T Corporation, Allstate Insurance Company
and IBM Corporation. In addition, the Company's management seeks volume
discounts to take advantage of the Company's size and dominance in particular
sub-markets, and operating efficiencies through the use of in-house
management, leasing, marketing, financing, accounting, legal, development and
construction functions. The Company believes that the combination of these
factors should allow the Company continued internal growth over the next
several years.
ACQUISITIONS: The Company also believes that growth opportunities exist
through acquiring operating properties or properties for redevelopment with
attractive returns in its core Northeast sub-markets where, based on its
expertise in leasing, managing and operating properties, it believes it is,
or can become, a significant and preferred owner and operator. The Company
intends to acquire, invest in or redevelop additional properties that: (i)
provide attractive initial yields with potential for growth in cash flow from
operations; (ii) are well-located, of high quality and competitive in their
respective sub-markets; (iii) are located in its existing sub-markets or in
sub-markets in which the Company can become a significant and preferred owner
or operator; and (iv) have been under-managed or are otherwise capable of
improved performance through intensive management, capital improvements
and/or leasing that will result in increased occupancy and rental revenues.
4
DEVELOPMENT: The Company, directly or through joint ventures, is underway on
the construction of eight office and office/flex buildings. The most
significant development activity is currently at the Company's Harborside
Financial Center office complex in Jersey City, New Jersey. Three of the
eight properties currently under construction are located at the complex and
consist of two office towers, aggregating approximately 1.6 million square
feet, and a 350-room Hyatt Regency hotel. The Company also recently completed
and placed in service a 185,000 square-foot office/ 1,100 space parking
garage project at Harborside. See "Liquidity and Capital Resources -
Capitalization."
Additionally, the Company may selectively develop additional properties where
it believes such development will result in a favorable risk-adjusted return
on investment in coordination with the above operating strategies. Such
development primarily will occur: (i) when leases have been executed prior to
construction; (ii) in stable core Northeast sub-markets where the demand for
such space exceeds available supply; and (iii) where the Company is, or can
become, a significant and preferred owner and operator.
PROPERTY SALES: As part of its focused strategy, the Company plans to sell
substantially all of its properties located in the Southwestern and Western
regions, using such proceeds primarily to invest in property acquisitions and
development projects in its core Northeast markets. Additionally, while
management's principal intention is to own and operate its properties on a
long-term basis, it is constantly assessing the attributes of each of its
properties, with a particular focus on the supply and demand fundamentals of
the sub-markets in which they are located. Based on these ongoing
assessments, the Company may, from time to time, decide to sell any of its
properties.
FINANCIAL
The Company currently intends to maintain a ratio of debt-to-undepreciated
assets (total debt of the Company as a percentage of total undepreciated
assets) of approximately 50 percent or less. As of December 31, 2000, the
Company's total debt constituted approximately 40.9 percent of total
undepreciated assets of the Company. The Company has three investment grade
credit ratings. Standard & Poor's Rating Services ("S&P") and Fitch, Inc.
("Fitch") have each assigned their BBB rating to existing and prospective
senior unsecured debt of the Operating Partnership. S&P and Fitch have also
assigned their BBB- rating to prospective preferred stock offerings of the
Company. Moody's Investors Service has assigned its Baa3 rating to existing
and prospective senior unsecured debt of the Operating Partnership and its Ba1
rating to prospective preferred stock offerings of the Company. Although there
is no limit in the Company's organizational documents on the amount of
indebtedness that the Company may incur or the requirement for maintenance of
investment grade credit ratings, the Company has entered into certain
financial agreements which contain covenants that limit the Company's ability
to incur indebtedness under certain circumstances. The Company intends to
conduct its operations in order to maintain its investment grade rated
status. The Company intends to utilize the most appropriate sources of
capital for future acquisitions, development, capital improvements and other
investments, which may include funds from operating activities, proceeds from
property sales, short-term and long-term borrowings (including draws on the
Company's revolving credit facilities), and the issuance of additional debt
or equity securities.
EMPLOYEES
As of December 31, 2000, the Company had over 400 employees.
COMPETITION
The leasing of real estate is highly competitive. The Properties compete for
tenants with lessors and developers of similar properties located in its
respective markets primarily on the basis of location, rent charged, services
provided, and the design and condition of the Properties. The Company also
experiences competition when attempting to acquire desirable real estate,
including competition from domestic and foreign financial institutions, other
REITs, life insurance companies, pension trusts, trust funds, partnerships
and individual investors.
REGULATIONS
Many laws and governmental regulations are applicable to the Properties and
changes in these laws and regulations, or their interpretation by agencies
and the courts, occur frequently.
5
Under various laws and regulations relating to the protection of the
environment, an owner of real estate may be held liable for the costs of
removal or remediation of certain hazardous or toxic substances located on or
in the property. These laws often impose liability without regard to whether
the owner was responsible for, or even knew of, the presence of such
substances. The presence of such substances may adversely affect the owner's
ability to rent or sell the property or to borrow using such property as
collateral and may expose it to liability resulting from any release of, or
exposure to, such substances. Persons who arrange for the disposal or
treatment of hazardous or toxic substances at another location may also be
liable for the costs of removal or remediation of such substances at the
disposal or treatment facility, whether or not such facility is owned or
operated by such person. Certain environmental laws impose liability for
release of asbestos-containing materials into the air, and third parties may
also seek recovery from owners or operators of real properties for personal
injury associated with asbestos-containing materials and other hazardous or
toxic substances.
In connection with the ownership (direct or indirect), operation, management
and development of real properties, the Company may be considered an owner or
operator of such properties or as having arranged for the disposal or
treatment of hazardous or toxic substances and, therefore, potentially liable
for removal or remediation costs, as well as certain other related costs,
including governmental penalties and injuries to persons and property.
There can be no assurance that (i) future laws, ordinances or regulations
will not impose any material environmental liability, (ii) the current
environmental condition of the Properties will not be affected by tenants, by
the condition of land or operations in the vicinity of the Properties (such
as the presence of underground storage tanks), or by third parties unrelated
to the Company, or (iii) the Company's assessments reveal all environmental
liabilities and that there are no material environmental liabilities of which
the Company is aware. If compliance with the various laws and regulations,
now existing or hereafter adopted, exceeds the Company's budgets for such
items, the Company's ability to make expected distributions to stockholders
could be adversely affected.
There are no other laws or regulations which have a material effect on the
Company's operations, other than typical federal, state and local laws
affecting the development and operation of real property, such as zoning laws.
INDUSTRY SEGMENTS
The Company operates in only one industry segment - real estate. The Company
does not have any foreign operations and its business is not seasonal.
RECENT DEVELOPMENTS
The Company's funds from operations (after adjustment for straight-lining of
rents and non-recurring charges) for the year ended December 31, 2000 was
$262.1 million as compared to $244.2 million for the year ended December 31,
1999. As a result of the Company's improved operating performance, the
Company announced, in September 2000, a 5.2 percent increase in its quarterly
dividend, commencing with the Company's dividend with respect to the third
quarter of 2000, from $0.58 per share of Common Stock ($2.32 per share of
Common Stock on an annualized basis) to $0.61 per share of Common Stock
($2.44 per share of Common Stock on an annualized basis). The Company
declared a cash dividend of $0.61 per share on December 20, 2000 to
shareholders of record as of January 4, 2001, with respect to the fourth
quarter of 2000. The dividend was paid on January 22, 2001. The Company has
increased its quarterly dividend for six consecutive years representing an
increase of 51.1 percent over the period.
In 2000, the Company:
- acquired five operating properties aggregating 702,876 square feet at
a total cost of approximately $91.9 million;
- placed in service two properties aggregating 339,680 square feet at a
total cost of approximately $78.9 million;
- acquired two developable land parcels at a total cost of approximately
$18.3 million; and
- sold five properties, aggregating 1,759,009 square feet, and a vacant
land parcel for aggregate net sales proceeds of approximately $293.6
million.
Additionally, the Company, through unconsolidated joint ventures, placed in
service six office and office/flex buildings aggregating 317,041 square feet.
6
OPERATING PROPERTY ACQUISITIONS
The Company acquired the following operating properties during the year ended
December 31, 2000:
- ----------------------------------------------------------------------------------------------------------------------
Investment by
Acquisition # of Rentable Company (a)
Date Property/Portfolio Name Location Bldgs. Square Feet (IN THOUSANDS)
- ----------------------------------------------------------------------------------------------------------------------
OFFICE
5/23/00 555 & 565 Taxter Road Elmsford, Westchester County, NY 2 341,108 $ 42,980
6/14/00 Four Gatehall Drive Parsippany, Morris County, NJ 1 248,480 42,381
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTY ACQUISITIONS: 3 589,588 $ 85,361
- ----------------------------------------------------------------------------------------------------------------------
OFFICE/FLEX
3/24/00 Two Executive Drive (b) Moorestown, Burlington County, NJ 1 60,800 $ 4,007
7/14/00 915 North Lenola Road (b) Moorestown, Burlington County, NJ 1 52,488 2,542
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTY ACQUISITION: 2 113,288 $ 6,549
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING PROPERTY ACQUISITIONS: 5 702,876 $ 91,910
======================================================================================================================
PROPERTIES PLACED IN SERVICE
The Company placed in service the following properties through the completion
of development during the year ended December 31, 2000:
- ----------------------------------------------------------------------------------------------------------------------
Investment by
Date Placed # of Rentable Company (d)
in Service Property Name Location Bldgs. Square Feet (IN THOUSANDS)
- ------------------------------------------------------------------------------------------------------------------------
OFFICE
9/01/00 Harborside Plaza 4-A (c) Jersey City, Hudson County, NJ 1 207,670 $ 61,459
9/15/00 Liberty Corner Corp. Center Bernards Township, Somerset County, NJ 1 132,010 17,430
- ----------------------------------------------------------------------------------------------------------------------
TOTAL PROPERTIES PLACED IN SERVICE: 2 339,680 $ 78,889
======================================================================================================================
(a) Transactions were funded primarily from net proceeds received in the
sale or sales of rental property.
(b) The properties were acquired through the exercise of a purchase
option obtained in the initial acquisition of the McGarvey portfolio
in January 1998.
(c) Project includes seven-story, 1,100-car parking garage.
(d) Unless otherwise noted, transactions were funded primarily through
draws on the Company's credit facilities, and amounts presented are
as of December 31, 2000.
LAND ACQUISITIONS
On January 13, 2000, the Company acquired approximately 12.7 acres of
developable land located at the Company's Airport Business Center, Lester,
Delaware County, Pennsylvania. The land was acquired for approximately $2.1
million.
On August 24, 2000, the Company entered into a joint venture with SJP Properties
Company ("SJP Properties") to form MC-SJP Morris V Realty, LLC and MC-SJP
Morris VI Realty, LLC, which acquired approximately 47.5 acres of developable
land located in Parsippany, Morris County, New Jersey. The land was acquired
for approximately $16.2 million. The Company accounts for the joint venture
on a consolidated basis.
7
PROPERTY SALES
The Company sold the following properties during the year ended December 31,
2000:
Caption
- ----------------------------------------------------------------------------------------------------------------------------------
NET SALES NET BOOK GAIN/
SALE # OF RENTABLE PROCEEDS VALUE (LOSS)
DATE PROPERTY NAME LOCATION BLDGS. SQUARE FEET (IN THOUSANDS) (IN THOUSANDS) (IN THOUSANDS)
- ------------------------------------------------------------------------------------------------------------------------------------
LAND:
02/25/00 Horizon Center Land Hamilton Township, Mercer
County, NJ -- 39.1 acres $ 4,180 $ 1,932 $ 2,248
OFFICE:
04/17/00 95 Christopher Columbus Dr Jersey City, Hudson County, NJ 1 621,900 148,222 80,583 67,639
04/20/00 6900 IH-40 West Amarillo, Potter County, TX 1 71,771 1,467 1,727 (260)
06/09/00 412 Mt. Kemble Avenue Morris Twp., Morris County, NJ 1 475,100 81,981 75,439 6,542
09/21/00 Cielo Center Austin, Travis County, TX 1 270,703 45,785 35,749 10,036
11/15/00 210 South 16th Street (1) Omaha, Douglas County, NE 1 319,535 11,976 12,828 (852)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTALS: 5 1,759,009 $293,611 $208,258 $85,353
==============================================================================================================================
(1) In connection with the sale of the Omaha, Nebraska property, the Company
provided to the purchaser an $8.8 million mortgage loan bearing interest
payable monthly at an annual rate of 9.50 percent. The loan is secured by
the Omaha, Nebraska property and will mature on November 14, 2003.
OTHER EVENTS
On June 27, 2000, William L. Mack was appointed Chairman of the Board of
Directors and John J. Cali was named Chairman Emeritus of the Board of
Directors. Brant Cali resigned as Executive Vice President, Chief Operating
Officer and Assistant Secretary of the Company and as a member of the Board of
Directors, and John R. Cali resigned as Executive Vice President, Development of
the Company. John R. Cali was appointed to the Board of Directors of the Company
to take the seat previously held by Brant Cali. See Note 3 to the Financial
Statements.
On September 21, 2000, the Company and Prentiss Properties Trust, a Maryland
REIT ("Prentiss"), mutually agreed to terminate the agreement and plan of merger
("Merger Agreement") dated as of June 27, 2000, among the Company, the Operating
Partnership, Prentiss and Prentiss Properties Acquisition Partners, L.P., a
Delaware limited partnership of which Prentiss (through a wholly-owned direct
subsidiary) is the sole general partner ("Prentiss Partnership"). In connection
with such termination, the Company deposited $25.0 million into escrow for the
benefit of Prentiss and Prentiss Partnership. Simultaneous with the termination,
the Company sold to Prentiss its 270,703 square-foot Cielo Center property
located in Austin, Travis County, Texas, and recognized a gain on the sale of
approximately $10.0 million.
FINANCING ACTIVITY
ISSUANCES OF SENIOR UNSECURED NOTES
On December 21, 2000, the Operating Partnership issued $15.0 million of 7.835
percent senior unsecured notes due December 15, 2010 with interest payable
semi-annually in arrears. The total proceeds from the issuance (net of selling
commissions) of approximately $14.9 million were used primarily to pay down
outstanding borrowings under the Prudential Facility, as defined in Note 9 to
the Financial Statements.
In January 2001, the Operating Partnership issued $300.0 million face amount of
7.75 percent senior unsecured notes due February 15, 2011 with interest payable
semi-annually in arrears. The total proceeds from the issuance (net of selling
commissions and discount) of approximately $296.3 million were used to pay down
outstanding borrowings under the 2000 Unsecured Facility, as defined below. The
senior unsecured notes were issued at a discount of approximately $1.7 million.
8
REVOLVING CREDIT FACILITY
On June 22, 2000, the Company obtained an unsecured revolving credit facility
("2000 Unsecured Facility") with a current borrowing capacity of $800.0
million from a group of 24 lenders. The interest rate on outstanding
borrowings under the credit line is currently the London Inter-Bank Offered
Rate ("LIBOR") plus 80 basis points. The Company may instead elect an interest
rate representing the higher of the lender's prime rate or the Federal Funds
rate plus 50 basis points. The 2000 Unsecured Facility also requires a 20
basis point facility fee on the current borrowing capacity payable quarterly
in arrears. In the event of a change in the Company's unsecured debt rating,
the interest rate and facility fee will be changed on a sliding scale. Subject
to certain conditions, the Company has the ability to increase the borrowing
capacity of the credit line up to $1.0 billion. The 2000 Unsecured Facility
matures in June 2003, with an extension option of one year, which would
require a payment of 25 basis points of the then borrowing capacity of the
credit line upon exercise.
STOCK REPURCHASES
On August 6, 1998, the Board of Directors of the Company authorized a share
repurchase program ("Repurchase Program") under which the Company was permitted
to purchase up to $100.0 million of the Company's outstanding common stock.
Under the Repurchase Program, the Company purchased for constructive retirement
1,869,200 shares of its outstanding common stock for an aggregate cost of
approximately $52.6 million through September 12, 2000.
On September 13, 2000, the Board of Directors authorized an increase to the
Repurchase Program under which the Company is permitted to purchase up to an
additional $150.0 million of the Company's outstanding common stock above the
$52.6 million that had previously been purchased. From that date through
February 15, 2001 the Company purchased for constructive retirement 2,098,300
shares of its outstanding common stock for an aggregate cost of approximately
$57.5 million under the Repurchase Program. The Company has authorization to
repurchase up to an additional $92.5 million of its outstanding common stock
which it may repurchase from time to time in open market transactions at
prevailing prices or through privately negotiated transactions.
RISK FACTORS
Our results from operations and ability to make distributions on our equity and
debt service on our indebtedness may be affected by the risk factors set
forth below. All investors should consider the following risk factors before
deciding to purchase securities of the Company. The Company refers to itself
as "we" or "our" in the following risk factors and in Item 7 - "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Disruption in Operations Due to Year 2000 Problems".
WE ARE DEPENDENT UPON THE ECONOMICS OF THE NORTHEASTERN OFFICE MARKETS.
A majority of our revenues are derived from our properties located in the
Northeast, particularly in New Jersey, New York, Pennsylvania and Connecticut.
Adverse economic developments in this region could adversely impact the
operations of our properties and, therefore, our profitability. Because our
portfolio consists primarily of office and office/flex buildings (as compared to
a more diversified real estate portfolio), a decline in the economy and/or a
decline in the demand for office space may adversely affect our ability to make
distributions or payments to our investors.
9
OUR PERFORMANCE IS SUBJECT TO RISKS ASSOCIATED WITH THE REAL ESTATE INDUSTRY.
GENERAL: Our ability to make distributions or payments to our investors depends
on the ability of our properties to generate funds in excess of operating
expenses (including scheduled principal payments on debt and capital expenditure
requirements). Events or conditions that are beyond our control may adversely
affect our operations and the value of our properties. Such events or conditions
could include:
- changes in the general economic climate;
- changes in local conditions such as oversupply of office space or a
reduction in demand for office space;
- decreased attractiveness of our properties to potential tenants;
- competition from other office and office/flex buildings;
- our inability to provide adequate maintenance;
- increased operating costs, including insurance premiums and real estate
taxes, due to inflation and other factors which may not necessarily be
offset by increased rents;
- changes in laws and regulations (including tax, environmental and
housing laws and regulations) and agency or court interpretations of
such laws and regulations and the related costs of compliance;
- changes in interest rate levels and the availability of financing;
- the inability of a significant number of tenants to pay rent;
- our inability to rent office space on favorable terms; and
- civil unrest, earthquakes and other natural disasters or acts of God
that may result in uninsured losses.
FINANCIALLY DISTRESSED TENANTS MAY BE UNABLE TO PAY RENT: If a tenant defaults,
we may experience delays and incur substantial costs in enforcing our rights as
landlord and protecting our investments. If a tenant files for bankruptcy, a
potential court judgment rejecting and terminating such tenant's lease could
adversely affect our ability to make distributions or payments to our investors.
ILLIQUIDITY OF REAL ESTATE LIMITS OUR ABILITY TO ACT QUICKLY: Real estate
investments are relatively illiquid. Such illiquidity may limit our ability to
react quickly in response to changes in economic and other conditions. If we
want to sell an investment, we might not be able to dispose of that investment
in the time period we desire, and the sales price of that investment might not
recoup or exceed the amount of our investment. The prohibition in the Internal
Revenue Code of 1986, as amended, and related regulations on a real estate
investment trust holding property for sale also may restrict our ability to sell
property. In addition, we acquired a significant number of our properties from
individuals to whom we issued limited partnership units as part of the purchase
price. In connection with the acquisition of these properties, in order to
preserve such individual's tax deferral, we contractually agreed not to sell or
otherwise transfer the properties for a specified period of time, subject to
certain exceptions. The above limitations on our ability to sell our investments
could adversely affect our ability to make distributions or payments to our
investors.
AMERICANS WITH DISABILITIES ACT COMPLIANCE COULD BE COSTLY: Under the Americans
with Disabilities Act of 1990, all public accommodations and commercial
facilities must meet certain federal requirements related to access and use by
disabled persons. Compliance with the ADA requirements could involve removal of
structural barriers from certain disabled persons' entrances. Other federal,
state and local laws may require modifications to or restrict further
renovations of our properties with respect to such accesses. Although we believe
that our properties are substantially in compliance with present requirements,
noncompliance with the ADA or related laws or regulations could result in the
United States government imposing fines or private litigants being awarded
damages against us. Such costs may adversely affect our ability to make
distributions or payments to our investors.
10
ENVIRONMENTAL PROBLEMS ARE POSSIBLE AND MAY BE COSTLY: Various federal, state
and local laws and regulations subject property owners or operators to liability
for the costs of removal or remediation of certain hazardous or toxic substances
located on or in the property. These laws often impose liability without regard
to whether the owner or operator was responsible for or even knew of the
presence of such substances. The presence of or failure to properly remediate
hazardous or toxic substances may adversely affect our ability to rent, sell or
borrow against contaminated property. Various laws and regulations also impose
liability on persons who arrange for the disposal or treatment of hazardous or
toxic substances at another location for the costs of removal or remediation of
such substances at the disposal or treatment facility. These laws often impose
liability whether or not the person arranging for such disposal ever owned or
operated the disposal facility. Certain other environmental laws and regulations
impose liability on owners or operators of property for injuries relating to the
release of asbestos-containing materials into the air. As owners and operators
of property and as potential arrangers for hazardous substance disposal, we may
be liable under such laws and regulations for removal or remediation costs,
governmental penalties, property damage, personal injuries and related expenses.
Payment of such costs and expenses could adversely affect our ability to make
distributions or payments to our investors.
COMPETITION FOR ACQUISITIONS MAY RESULT IN INCREASED PRICES FOR PROPERTIES: We
plan to acquire additional properties in New Jersey, New York and Pennsylvania
and in the Northeast generally. We may be competing for investment opportunities
with entities that have greater financial resources and more experienced
managers. Several office building developers and real estate companies may
compete with us in seeking properties for acquisition, land for development and
prospective tenants. Such competition may adversely affect our ability to make
distributions or payments to our investors by:
- reducing the number of suitable investment opportunities offered to us;
- increasing the bargaining power of property owners;
- interfering with our ability to attract and retain tenants;
- increasing vacancies which lowers market rental rates and limits our
ability to negotiate rental rates; and/or
- adversely affecting our ability to minimize expenses of operation.
DEVELOPMENT OF REAL ESTATE COULD BE COSTLY: As part of our operating strategy,
we may acquire land for development under certain conditions. Included among the
risks of the real estate development business are the following, which may
adversely affect our ability to make distributions or payments to our investors:
- financing for development projects may not be available on favorable
terms;
- long-term financing may not be available upon completion of
construction; and
- failure to complete construction on schedule or within budget may
increase debt service expense and construction costs.
PROPERTY OWNERSHIP THROUGH JOINT VENTURES COULD SUBJECT US TO THE CONTRARY
BUSINESS OBJECTIVES OF OUR CO-VENTURERS: We, from time to time, invest in joint
ventures or partnerships in which we do not hold a controlling interest. These
investments involve risks that do not exist with properties in which we own a
controlling interest, including the possibility that our co-venturers or
partners may, at any time, have business, economic or other objectives that
are inconsistent with our objectives. Because we lack a controlling interest,
our co-venturers or partners may be in a position to take action contrary to
our instructions or requests or contrary to our policies or objectives. Our
organizational documents do not limit the amount of available funds that we
may invest in joint ventures or partnerships. If the objectives of our
co-venturers or partners are inconsistent with ours, it may adversely affect
our ability to make distributions or payments to our investors.
11
DEBT FINANCING COULD ADVERSELY AFFECT OUR ECONOMIC PERFORMANCE.
SCHEDULED DEBT PAYMENTS AND REFINANCING COULD ADVERSELY AFFECT OUR FINANCIAL
CONDITION: We are subject to the risks normally associated with debt financing.
These risks, including the following, may adversely affect our ability to make
distributions or payments to our investors:
- our cash flow may be insufficient to meet required payments of principal
and interest;
- payments of principal and interest on borrowings may leave us with
insufficient cash resources to pay operating expenses;
- we may not be able to refinance indebtedness on our properties at
maturity; and
- if refinanced, the terms of refinancing may not be as favorable as the
original terms of the related indebtedness.
As of December 31, 2000, we had total outstanding indebtedness of $1.6 billion
comprised of $798.1 million of senior unsecured notes, outstanding borrowings of
$348.8 million under our unsecured $800.0 million revolving credit facility and
approximately $481.6 million of mortgage indebtedness. We may have to refinance
the principal due on our indebtedness at maturity, and we may not be able to
refinance any indebtedness we incur in the future.
If we are unable to refinance our indebtedness on acceptable terms, or at all,
events or conditions that may adversely affect our ability to make distributions
or payments to our investors include the following:
- we may need to dispose of one or more of our properties upon
disadvantageous terms;
- prevailing interest rates or other factors at the time of refinancing
could increase interest rates and, therefore, our interest expense;
- if we mortgage property to secure payment of indebtedness and are unable
to meet mortgage payments, the mortgagee could foreclose upon such
property or appoint a receiver to receive an assignment of our rents and
leases; and
- foreclosures upon mortgaged property could create taxable income without
accompanying cash proceeds and, therefore, hinder our ability to meet
the real estate investment trust distribution requirements of the
Internal Revenue Code.
RISING INTEREST RATES MAY ADVERSELY AFFECT OUR CASH FLOW: Outstanding borrowings
of approximately $348.8 million (as of December 31, 2000) under our revolving
credit facilities and approximately $32.2 million (as of December 31, 2000) of
our mortgage indebtedness bear interest at variable rates. We may incur
additional indebtedness in the future that also bears interest at variable
rates. Variable rate debt creates higher debt service requirements if market
interest rates increase. Higher debt service requirements could adversely affect
our ability to make distributions or payments to our investors or cause us to
default under certain debt covenants.
OUR DEGREE OF LEVERAGE COULD ADVERSELY AFFECT OUR CASH FLOW: We fund acquisition
opportunities and development partially through short-term borrowings (including
our revolving credit facilities), as well as from proceeds from property sales
and undistributed cash. We expect to refinance projects purchased with
short-term debt either with long-term indebtedness or equity financing depending
upon the economic conditions at the time of refinancing. Our Board of Directors
has a general policy of limiting the ratio of our indebtedness to total
undepreciated assets (total debt as a percentage of total undepreciated
assets) to 50 percent or less, although there is no limit in Mack-Cali
Realty, L.P.'s or our organizational documents on the amount of indebtedness
that we may incur. However, we have entered into certain financial agreements
which contain financial and operating covenants that limit our ability under
certain circumstances to incur additional secured and unsecured indebtedness.
The Board of Directors could alter or eliminate its current policy on
borrowing at any time in its discretion. If this policy were changed, we
could become more highly leveraged, resulting in an increase in debt service
that could adversely affect our cash flow and our ability to make
distributions or payments to our investors and could cause an increased risk
of default on our obligations.
12
WE ARE DEPENDENT ON OUR KEY PERSONNEL WHOSE CONTINUED SERVICE IS NOT GUARANTEED.
We are dependent upon our executive officers for strategic business direction
and real estate experience. While we believe that we could find replacements for
these key personnel, loss of their services could adversely affect our
operations. We have entered into an employment agreement (including
non-competition provisions) which provides for a continuous four-year employment
term with each of Mitchell E. Hersh, Timothy M. Jones, Barry Lefkowitz and Roger
W. Thomas. We also have entered into an employment agreement (including
non-competition provisions) with Michael A. Grossman which provides for an
initial three year employment term and a continuous one-year term from and after
the two-year anniversary of the execution of the agreement. We do not have key
man life insurance for our executive officers.
CONSEQUENCES OF FAILURE TO QUALIFY AS A REAL ESTATE INVESTMENT TRUST COULD
ADVERSELY AFFECT OUR FINANCIAL CONDITION.
FAILURE TO MAINTAIN OWNERSHIP LIMITS COULD CAUSE US TO LOSE OUR QUALIFICATION
AS A REAL ESTATE INVESTMENT TRUST: In order for us to maintain our
qualification as a real estate investment trust, not more than 50 percent in
value of our outstanding stock may be actually and/or constructively owned by
five or fewer individuals (as defined in the Internal Revenue Code to include
certain entities). We have limited the ownership of our outstanding shares of
our common stock by any single stockholder to 9.8 percent of the outstanding
shares of our common stock. Our Board of Directors could waive this
restriction if they were satisfied, based upon the advice of tax counsel or
otherwise, that such action would be in our best interests and would not
affect our qualifications as a real estate investment trust. Common stock
acquired or transferred in breach of the limitation may be redeemed by us for
the lesser of the price paid and the average closing price for the 10 trading
days immediately preceding redemption or sold at the direction of us. We may
elect to redeem such shares of common stock for limited partnership units,
which are nontransferable except in very limited circumstances. Any transfer
of shares of common stock which, as a result of such transfer, causes us to be
in violation of any ownership limit will be deemed void. Although we currently
intend to continue to operate in a manner which will enable us to continue to
qualify as a real estate investment trust, it is possible that future
economic, market, legal, tax or other considerations may cause our Board of
Directors to revoke the election for us to qualify as a real estate investment
trust. Under our organizational documents, our Board of Directors can make
such revocation without the consent of our stockholders.
In addition, the consent of the holders of at least 85 percent of Mack-Cali
Realty, L.P.'s partnership units is required: (i) to merge (or permit the merger
of) us with another unrelated person, pursuant to a transaction in which
Mack-Cali Realty, L.P. is not the surviving entity; (ii) to dissolve, liquidate
or wind up Mack-Cali Realty, L.P.; or (iii) to convey or otherwise transfer all
or substantially all of Mack-Cali Realty, L.P.'s assets. As general partner, we
own approximately 79.8 percent of Mack-Cali Realty, L.P.'s outstanding
partnership units (assuming conversion of all preferred limited partnership
units).
TAX LIABILITIES AS A CONSEQUENCE OF FAILURE TO QUALIFY AS A REAL ESTATE
INVESTMENT TRUST: We have elected to be treated and have operated so as to
qualify as a real estate investment trust for federal income tax purposes since
our taxable year ended December 31, 1994. Although we believe we will continue
to operate in such manner, we cannot guarantee that we will do so. Qualification
as a real estate investment trust involves the satisfaction of various
requirements (some on an annual and quarterly basis) established under highly
technical and complex tax provisions of the Internal Revenue Code. Because few
judicial or administrative interpretations of such provisions exist and
qualification determinations are fact sensitive, we cannot assure you that we
will qualify as a real estate investment trust for any taxable year.
If we fail to qualify as a real estate investment trust in any taxable year, we
will be subject to the following:
- we will not be allowed a deduction for dividends to shareholders;
- we will be subject to federal income tax at regular corporate rates,
including any alternative minimum tax, if applicable; and
- unless we are entitled to relief under certain statutory provisions, we
will not be permitted to qualify as a real estate investment trust for
the four taxable years following the year during which we were
disqualified.
A loss of our status as a real estate investment trust could have an adverse
effect on us. Failure to qualify as a real estate investment trust also would
eliminate the requirement that we pay dividends to our stockholders.
13
OTHER TAX LIABILITIES: Even if we qualify as a real estate investment trust, we
are subject to certain federal, state and local taxes on our income and property
and, in some circumstances, certain other state taxes. Our net income from third
party management and tenant improvements, if any, also may be subject to federal
income tax.
RISK OF CHANGES IN THE TAX LAW APPLICABLE TO REAL ESTATE INVESTMENT TRUSTS:
Since the Internal Revenue Service, the United States Treasury Department and
Congress frequently review federal income tax legislation, we cannot predict
whether, when or to what extent new federal tax laws, regulations,
interpretations or rulings will be adopted. Any of such legislative action may
prospectively or retroactively modify our and Mack-Cali Realty, L.P.'s tax
treatment and, therefore, may adversely affect taxation of us, Mack-Cali Realty,
L.P., and/or investors.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The Company considers portions of this information to be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements relate to, without limitation, the Company's future economic
performance, plans and objectives for future operations and projections of
revenue and other financial items. Forward-looking statements can be identified
by the use of words such as "may," "will," "should," "expect," "anticipate,"
"estimate" or "continue" or comparable terminology. Forward-looking statements
are inherently subject to risks and uncertainties, many of which the Company
cannot predict with accuracy and some of which the Company might not even
anticipate. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions, it can
give no assurance that its expectations will be achieved. Future events and
actual results, financial and otherwise, may differ materially from the results
discussed in the forward-looking statements. See "Risk Factors" for a discussion
of important factors with respect to such forward-looking statements, including
certain risks and uncertainties, that could cause actual results to differ
materially from those presented in the forward-looking statements.
14
ITEM 2. PROPERTIES
PROPERTY LIST
As of December 31, 2000, the Company's Consolidated Properties consisted of 248
in-service office, office/flex and industrial/warehouse properties, ranging from
one to 20 stories, as well as two multi-family residential properties, two
stand-alone retail properties and three land leases. The Consolidated Properties
are located primarily in the Northeast. The Consolidated Properties are easily
accessible from major thoroughfares and are in close proximity to numerous
amenities. The Consolidated Properties contain a total of approximately 26.7
million square feet, with the individual properties ranging from approximately
6,200 to 761,200 square feet. The Consolidated Properties, managed by on-site
employees, generally have attractively landscaped sites, atriums and covered
parking in addition to quality design and construction. The Company's tenants
include many service sector employers, including a large number of professional
firms and national and international businesses. The Company believes that all
of its properties are well-maintained and do not require significant capital
improvements.
15
PROPERTY LISTING
OFFICE PROPERTIES
PERCENTAGE
OF TOTAL 2000 2000
PERCENTAGE 2000 2000 OFFICE, 2000 AVERAGE TENANTS LEASING 10%
NET LEASED BASE EFFECTIVE OFFICE/FLEX, AVERAGE EFFECTIVE OR MORE OF NET
RENTABLE AS OF RENT RENT AND INDUSTRIAL/ BASE RENT RENT RENTABLE AREA PER
PROPERTY YEAR AREA 12/31/00 ($000'S) ($000'S) WAREHOUSE PER SQ. FT. PER SQ. FT. PROPERTY AS OF
LOCATION BUILT (SQ. FT.) (%) (1) (2) (6) (3) (6) BASE RENT (%) ($) (4) (6) ($) (5) (6) 12/31/00 (6)
- -----------------------------------------------------------------------------------------------------------------------------------
ATLANTIC COUNTY,
NEW JERSEY
EGG HARBOR
100 Decadon
Drive........... 1987 40,422 82.1 770 755 0.16 23.20 22.75 Computer Sciences
Corp. (81%)
200 Decadon
Drive........... 1991 39,922 95.3 728 687 0.15 19.13 18.06 Computer Sciences
Corp. (45%), Advanced
Casino Systems
Corp. (33%),
Dimensions
International Inc.
(15%)
BERGEN COUNTY,
NEW JERSEY
FAIR LAWN
17-17 Route
208 North....... 1987 143,000 98.3 3,498 3,381 0.72 24.88 24.05 Lonza, Inc. (63%),
Boron-Lepore Assoc.,
Inc. (16%)
FORT LEE
One Bridge
Plaza........... 1981 200,000 93.5 4,853 4,591 1.00 25.95 24.55 PricewaterhouseCoopers,
LLP (35%), Broadview
Associates LLP
(16%), Bozell
Worldwide, Inc. (16%)
2115 Linwood
Avenue.......... 1981 68,000 99.7 1,255 1,132 0.26 18.51 16.70 US Depot Inc. (23%),
Ameribrom Inc. (14%),
Mack Management
& Construction (11%),
Morgan Stanley Dean
Witter (10%)
LITTLE FERRY
200 Riser Road.. 1974 286,628 100.0 1,869 1,869 0.39 6.52 6.52 Ford Motor Company
(34%), Dassault Falcon
Jet Corp. (33%),
Sanyo Fischer Services
Corp. (33%)
MONTVALE
95 Chestnut
Ridge Road...... 1975 47,700 100.0 569 569 0.12 11.93 11.93 Aventis Environmental
Science (100%)
135 Chestnut
Ridge Road...... 1981 66,150 99.7 915 843 0.19 13.87 12.78 Paychex Inc. (45%),
Automated Resources
Group Inc. (26%),
Sys-Con Publications
Inc. (11%), Lexmark
International
(10%)
PARAMUS
15 East Midland
Avenue.......... 1988 259,823 100.0 6,731 6,727 1.39 25.91 25.89 Cellular Telephone
Company (100%)
461 From Road... 1988 253,554 99.8 6,036 6,027 1.25 23.85 23.82 Toys `R' Us, Inc. (96%)
650 From Road... 1978 348,510 87.5 7,290 7,261 1.50 23.91 23.81 Movado Group Inc.
(17%), Long Beach
Acceptance Corp. (10%)
140 Ridgewood
Avenue ......... 1981 239,680 100.0 5,266 5,211 1.09 21.97 21.74 Cellular Telephone
Company (57%), Smith
Barney Shearson Inc.
(19%)
61 South
Paramus Avenue.. 1985 269,191 100.0 6,124 5,683 1.26 22.75 21.11 --
ROCHELLE PARK
120 Passaic
Street.......... 1972 52,000 99.6 954 933 0.20 18.42 18.01 SBC Telecom Inc. (53%),
Cantor Fitzgerald LP
(46%)
365 West
Passaic Street.. 1976 212,578 95.7 3,907 3,636 0.81 19.20 17.87 United Retail Inc.
(31%), Catalina
Marketing Corp. (10%),
Regulus LLC (10%)
SADDLE RIVER
1 Lake Street... 1973/94 474,801 100.0 7,465 7,465 1.54 15.72 15.72 Prentice-Hall Inc.
(100%)
UPPER SADDLE
RIVER
10 Mountainview
Road............ 1986 192,000 100.0 3,972 3,909 0.82 20.69 20.36 Thomson Minwax Company
(23%), Professional
Detailing Inc.
(20%), Corning Life
Sciences Inc. (15%),
ITT Fluid Technology
(14%), Pearson
Education (14%)
16
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000 2000
PERCENTAGE 2000 2000 OFFICE, 2000 AVERAGE TENANTS LEASING 10%
NET LEASED BASE EFFECTIVE OFFICE/FLEX, AVERAGE EFFECTIVE OR MORE OF NET
RENTABLE AS OF RENT RENT AND INDUSTRIAL/ BASE RENT RENT RENTABLE AREA PER
PROPERTY YEAR AREA 12/31/00 ($000'S) ($000'S) WAREHOUSE PER SQ. FT. PER SQ. FT. PROPERTY AS OF
LOCATION BUILT (SQ. FT.) (%) (1) (2) (6) (3) (6) BASE RENT (%) ($) (4) (6) ($) (5) (6) 12/31/00 (6)
- -----------------------------------------------------------------------------------------------------------------------------------
WOODCLIFF LAKE
400 Chestnut
Ridge Road...... 1982 89,200 100.0 2,131 2,131 0.44 23.89 23.89 Timeplex, Inc. (100%)
470 Chestnut
Ridge Road...... 1987 52,500 100.0 1,192 1,192 0.25 22.70 22.70 Andermatt LP (100%)
530 Chestnut
Ridge Road...... 1986 57,204 100.0 1,166 1,166 0.24 20.38 20.38 KPMG Peat Marwick,
LLP (100%)
50 Tice
Boulevard....... 1984 235,000 95.5 4,881 4,291 1.01 21.75 19.12 Syncsort, Inc (25%)
300 Tice
Boulevard....... 1991 230,000 100.0 4,967 4,920 1.02 21.60 21.39 Chase Home Mortgage
Corp. (25%), Medco
Containment
Services (20%),
Comdisco, Inc. (13%),
NYCE Corp. (11%)
BURLINGTON
COUNTY,
NEW JERSEY
MOORESTOWN
224 Strawbridge
Drive........... 1984 74,000 98.1 1,368 1,094 0.28 18.84 15.07 Allstate Insurance
Company (49%),
Harleysville Mutual
Insurance (27%)
228 Strawbridge
Drive........... 1984 74,000 100.0 1,434 1,081 0.30 19.38 14.61 Cendant Mortgage
Corporation (100%)
ESSEX COUNTY,
NEW JERSEY
MILLBURN
150 J.F. Kennedy
Parkway......... 1980 247,476 100.0 6,182 6,127 1.28 24.98 24.76 KPMG Peat Marwick,
LLP (42%), Budd
Larner Gross Et Al
(23%)
ROSELAND
101 Eisenhower
Parkway......... 1980 237,000 97.5 4,200 3,899 0.87 18.18 16.87 Arthur Andersen, LLP
(31%), Brach,
Eichler, Rosenberg,
Silver,
Bernstein & Hammer
(13%)
103 Eisenhower
Parkway......... 1985 151,545 100.0 3,350 3,059 0.69 22.11 20.19 Chelsea GCA Realty
Corp. (18%), Lum,
Danzis, Drasco
Positan & Kleinberg
(15%), Netplex Group
Inc. (12%),
Salomon Smith Barney,
Inc. (11%)
HUDSON COUNTY,
NEW JERSEY
JERSEY CITY
95 Christopher
Columbus
Drive (8)....... 1989 -- -- 3,850 3,844 0.79 -- -- --
Harborside
Financial
Center Plaza 1.. 1983 400,000 99.0 3,336 3,333 0.69 8.42 8.42 Bankers Trust
Harborside, Inc.
(96%)
Harborside
Financial
Center Plaza 2.. 1990 761,200 100.0 18,523 17,908 3.82 24.33 23.53 Morgan Stanley Dean
Witter (35%), Dow
Jones Telerate
Systems,
Inc. (24%), DLJ
Securities Corp.
(15%), Lewco
Securities (11%)
Harborside
Financial
Center Plaza 3.. 1990 725,600 100.0 17,654 17,067 3.64 24.33 23.52 AICPA (34%), BTM
Information Services,
Inc. (19%)
Harborside
Financial
Center
Plaza 4-A (7)... 2000 207,670 88.7 1,279 1,225 0.26 36.44(9) 34.90(9) Waterhouse Securities
Inc. (89%)
17
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000 2000
PERCENTAGE 2000 2000 OFFICE, 2000 AVERAGE TENANTS LEASING 10%
NET LEASED BASE EFFECTIVE OFFICE/FLEX, AVERAGE EFFECTIVE OR MORE OF NET
RENTABLE AS OF RENT RENT AND INDUSTRIAL/ BASE RENT RENT RENTABLE AREA PER
PROPERTY YEAR AREA 12/31/00 ($000'S) ($000'S) WAREHOUSE PER SQ. FT. PER SQ. FT. PROPERTY AS OF
LOCATION BUILT (SQ. FT.) (%) (1) (2) (6) (3) (6) BASE RENT (%) ($) (4) (6) ($) (5) (6) 12/31/00 (6)
- -----------------------------------------------------------------------------------------------------------------------------------
MERCER COUNTY,
NEW JERSEY
PRINCETON
103 Carnegie
Center.......... 1984 96,000 100.0 2,302 2,124 0.47 23.98 22.13 Ronin Development
Corp. (15%), R.G.
Vanderweil
Engineers (14%),
Kurt Salmon Assoc.
Inc. (11%)
100 Overlook
Center ......... 1988 149,600 88.9 3,338 3,285 0.69 25.10 24.70 Regus Business
Centre Corp.
(26%), Xerox
Corporation (23%),
Paine Webber Inc.
(14%)
5 Vaughn
Drive........... 1987 98,500 100.0 2,312 2,163 0.48 23.47 21.96 U.S. Trust Company
of NJ (19%),
Princeton Venture
Research Corp.
(14%), Villeroy &
Boch Tableware
Ltd. (14%),
Woodrow Wilson
National
Fellowship
Foundation (14%)
MIDDLESEX
COUNTY,
NEW JERSEY
EAST BRUNSWICK
377 Summerhill
Road............ 1977 40,000 100.0 373 370 0.08 9.33 9.25 Greater New York
Mutual Insurance
Company (100%)
PLAINSBORO
500 College
Road East....... 1984 158,235 100.0 3,404 3,374 0.70 21.51 21.32 SSB Realty, LLC
(72%), Buchanan
Ingersoll P.C.
(17%),
PNC Bank, N.A.
(10%)
SOUTH BRUNSWICK
3 Independence
Way............. 1983 111,300 100.0 2,166 2,116 0.45 19.46 19.01 Merrill Lynch
Pierce Fenner &
Smith (84%)
WOODBRIDGE
581 Main
Street.......... 1991 200,000 100.0 4,699 4,617 0.97 23.50 23.09 First Investors
Management
Company, Inc.
(38%), Cast North
America Ltd. (11%)
MONMOUTH COUNTY,
NEW JERSEY
NEPTUNE
3600 Route 66... 1989 180,000 100.0 2,410 2,410 0.50 13.39 13.39 United States Life
Insurance Company
(100%)
WALL TOWNSHIP
1305 Campus
Parkway......... 1988 23,350 82.3 472 460 0.10 24.56 23.94 Waterford
Wedgewood USA
Inc. (41%),
McLaughlin,
Bennett, Gelson
(35%)
1350 Campus
Parkway......... 1990 79,747 99.9 1,393 1,295 0.29 17.49 16.26 Meridan Health
Realty Corp.
(22%), Milestone
Material Inc.
(18%), Stephen E.
Gertler Law Office
(17%), Amper
Politzner &
Mattia PA (11%),
Health Care
Software (11%),
Sportsgolf L.L.C.
(11%)
MORRIS COUNTY,
NEW JERSEY
FLORHAM PARK
325 Columbia
Turnpike........ 1987 168,144 100.0 4,107 3,684 0.85 24.43 21.91 Bressler Amery &
Ross (24%),
Salomon Smith
Barney Inc.
(13%), Atlantic
Health Systems
(12%), Dun &
Bradstreet
Inc. (12%)
18
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000 2000
PERCENTAGE 2000 2000 OFFICE, 2000 AVERAGE TENANTS LEASING 10%
NET LEASED BASE EFFECTIVE OFFICE/FLEX, AVERAGE EFFECTIVE OR MORE OF NET
RENTABLE AS OF RENT RENT AND INDUSTRIAL/ BASE RENT RENT RENTABLE AREA PER
PROPERTY YEAR AREA 12/31/00 ($000'S) ($000'S) WAREHOUSE PER SQ. FT. PER SQ. FT. PROPERTY AS OF
LOCATION BUILT (SQ. FT.) (%) (1) (2) (6) (3) (6) BASE RENT (%) ($) (4) (6) ($) (5) (6) 12/31/00 (6)
- -----------------------------------------------------------------------------------------------------------------------------------
MORRIS PLAINS
250 Johnson
Road............ 1977 75,000 100.0 1,300 1,264 0.27 17.33 16.85 Electronic Data
Systems Corp.
(100%)
201 Littleton
Road............ 1979 88,369 100.0 1,880 1,860 0.39 21.27 21.05 Xerox Corporation
(50%), Willis
Corroon Corp. of
New Jersey
(20%), Bozell
Worldwide Inc.
(19%), CHEP USA
(11%)
MORRIS TOWNSHIP
340 Mt. Kemble
Avenue.......... 1985 387,000 100.0 5,530 5,530 1.14 14.29 14.29 AT&T Corporation
(100%)
412 Mt. Kemble
Avenue (8)...... 1986 -- -- 3,030 3,030 0.63 -- -- --
PARSIPPANY
7 Campus Drive.. 1982 154,395 100.0 2,552 2,551 0.53 16.53 16.52 Nabisco Inc. (100%)
8 Campus Drive.. 1987 215,265 100.0 5,517 5,324 1.14 25.63 24.73 Prudential
Insurance Co.
(31%), Bay Networks
Inc. (27%), MCI
Telecommunications
Corp. (18%), Ayco
Company L.P.(13%)
2 Dryden Way.... 1990 6,216 100.0 67 67 0.01 10.78 10.78 Bright Horizons
Childrens Center
(100%)
4 Gatehall
Drive (7)....... 1988 248,480 90.8 3,170 3,170 0.65 25.51 25.51 J.B. Hanauer &
Company (20%),
Royal Indemnity
Company
(13%), Toyota
Motor Credit Corp.
(12%)
2 Hilton Court.. 1991 181,592 100.0 4,693 4,656 0.97 25.84 25.64 Deloitte & Touche
USA LLP (64%),
Northern Telecom
Inc.
(16%), Sankyo
Parke Davis (11%)
600 Parsippany
Road............ 1978 96,000 100.0 1,583 1,499 0.33 16.49 15.61 Exario Networks
Inc. (36%),
Sharemax.com (32%)
1 Sylvan Way.... 1989 150,557 100.0 3,507 3,103 0.72 23.29 20.61 Cendant Operations
Inc. (99%)
5 Sylvan Way.... 1989 151,383 100.0 3,519 3,459 0.73 23.25 22.85 Integrated
Communications
(41%), Experian
Information
Solution
(15%), DRS
Technologies Inc.
(12%)
7 Sylvan Way.... 1987 145,983 100.0 2,919 2,919 0.60 20.00 20.00 Nabisco Inc. (100%)
PASSAIC COUNTY,
NEW JERSEY
CLIFTON
777 Passaic
Avenue.......... 1983 75,000 89.1 954 857 0.20 14.28 12.82 Grosvenor
Marketing Ltd (10%)
TOTOWA
999 Riverview
Drive........... 1988 56,066 100.0 1,014 946 0.21 18.09 16.87 Medical Logistics
Inc. (36%),
Telsource
Corporation (19%),
Humana Press (15%),
Bankers Financial
Corp. (10%)
WAYNE
201 Willowbrook
Boulevard....... 1970 178,329 99.0 2,407 2,392 0.50 13.63 13.55 The Grand Union
Company (76%),
Woodward-Clyde
Consultants
(23%)
19
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE,
NET LEASED 2000 2000 OFFICE/FLEX,
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT (%)
- --------------------------------------------------------------------------------------------------------------
SOMERSET COUNTY, NEW JERSEY
BASKING RIDGE
222 Mt. Airy Road................ 1986 49,000 100.0 745 692 0.15
233 Mt. Airy Road................ 1987 66,000 100.0 762 712 0.16
BERNARDS
106 Allen Road (7)............... 2000 132,010 72.5 279 234 0.06
BRIDGEWATER
721 Route 202/206................ 1989 192,741 100.0 4,286 4,142 0.88
UNION COUNTY, NEW JERSEY
CLARK
100 Walnut Avenue................ 1985 182,555 97.5 4,568 4,001 0.94
CRANFORD
6 Commerce Drive................. 1973 56,000 93.0 1,029 964 0.21
11 Commerce Drive (6)............ 1981 90,000 93.2 1,023 908 0.21
12 Commerce Drive................ 1967 72,260 96.3 604 603 0.12
20 Commerce Drive................ 1990 176,600 100.0 4,065 3,674 0.84
65 Jackson Drive................. 1984 82,778 100.0 1,600 1,213 0.33
NEW PROVIDENCE
890 Mountain Road................ 1977 80,000 100.0 2,250 2,238 0.46
- -------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE 11,430,809 98.0 229,544 220,922 47.39
- -------------------------------------------------------------------------------------------------------------
DUTCHESS COUNTY, NEW YORK
FISHKILL
300 South Lake Drive............. 1987 118,727 97.3 2,184 2,157 0.45
NASSAU COUNTY, NEW YORK
NORTH HEMPSTEAD
600 Community Drive.............. 1983 206,274 100.0 4,808 4,808 0.99
111 East Shore Road.............. 1980 55,575 100.0 1,518 1,514 0.31
2000
2000 AVERAGE TENANTS LEASING 10%
AVERAGE EFFECTIVE OR MORE OF NET
BASE RENT RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PER SQ. FT. PROPERTY AS OF
LOCATION ($)(4)(6) ($)(5)(6) 12/31/00(6)
- --------------------------------------------------------------------------------------------------------------------------------
SOMERSET COUNTY, NEW JERSEY
BASKING RIDGE
222 Mt. Airy Road................ 15.20 14.12 Avaya Inc. (100%)
233 Mt. Airy Road................ 11.55 10.79 Avaya Inc. (100%)
BERNARDS
106 Allen Road (7)............... 24.84(9) 20.83(9) KPMG Consulting LLC (59%)
BRIDGEWATER
721 Route 202/206................ 22.24 21.49 Allstate Insurance Company (37%), Norris, McLaughlin &
Marcus, PA (30%)
UNION COUNTY, NEW JERSEY
CLARK
100 Walnut Avenue................ 25.66 22.48 CAP Gemini America Inc. (54%), Equitable Life Assurance
(10%), Mastercare Companies Inc. (10%)
CRANFORD
6 Commerce Drive................. 19.76 18.51 Kendle International Inc. (50%)
11 Commerce Drive (6)............ 12.20 10.82 Northeast Administrators (10%)
12 Commerce Drive................ 8.68 8.67 Dames & Moore (40%), Registrar & Transfer Company (36%)
20 Commerce Drive................ 23.02 20.80 Public Service Electric & Gas Company (26%), Quintiles Inc.
(21%)
65 Jackson Drive................. 19.33 14.65 Kraft General Foods, Inc. (35%), Allstate Insurance Company
(27%), Procter & Gamble Distribution Co., Inc. (18%), Provident
Companies Inc. (14%)
NEW PROVIDENCE
890 Mountain Road................ 28.13 27.98 Aspen Technology Inc. (52%), Dun & Bradstreet (27%), K Line
America, Inc. (16%)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE 21.01 20.22
- --------------------------------------------------------------------------------------------------------------------------------
DUTCHESS COUNTY, NEW YORK
FISHKILL
300 South Lake Drive............. 18.91 18.67 Allstate Insurance Company (16%)
NASSAU COUNTY, NEW YORK
NORTH HEMPSTEAD
600 Community Drive.............. 23.31 23.31 CMP Media, Inc. (100%)
111 East Shore Road.............. 27.31 27.24 Administrators For The Professions, Inc. (100%)
20
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE,
NET LEASED 2000 2000 OFFICE/FLEX,
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT (%)
- ---------------------------------------------------------------------------------------------------------------
ROCKLAND COUNTY, NEW YORK
SUFFERN
400 Rella Boulevard.............. 1988 180,000 99.8 3,631 3,463 0.75
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
100 Clearbrook Road (6).......... 1975 60,000 91.7 938 869 0.19
101 Executive Boulevard.......... 1971 50,000 79.3 801 772 0.17
555 Taxter Road (7).............. 1986 170,554 100.0 2,457 2,457 0.51
565 Taxter Road (7).............. 1988 170,554 86.6 2,052 2,047 0.42
570 Taxter Road.................. 1972 75,000 96.5 1,456 1,398 0.30
HAWTHORNE
30 Saw Mill River Road........... 1982 248,400 100.0 5,215 4,301 1.07
1 Skyline Drive.................. 1980 20,400 99.0 300 289 0.06
2 Skyline Drive.................. 1987 30,000 98.9 479 435 0.10
7 Skyline Drive.................. 1987 109,000 100.0 2,196 2,193 0.45
17 Skyline Drive................. 1989 85,000 100.0 1,233 1,233 0.25
TARRYTOWN
200 White Plains Road............ 1982 89,000 88.1 1,734 1,581 0.36
220 White Plains Road............ 1984 89,000 95.4 2,117 2,020 0.44
WHITE PLAINS
1 Barker Avenue.................. 1975 68,000 99.0 1,605 1,568 0.33
3 Barker Avenue.................. 1983 65,300 93.3 1,251 1,217 0.26
50 Main Street................... 1985 309,000 99.6 7,641 7,216 1.58
11 Martine Avenue................ 1987 180,000 100.0 4,529 4,192 0.93
1 Water Street................... 1979 45,700 99.8 1,048 1,014 0.22
2000
2000 AVERAGE TENANTS LEASING 10%
AVERAGE EFFECTIVE OR MORE OF NET
BASE RENT RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PER SQ. FT. PROPERTY AS OF
LOCATION ($)(4)(6) ($)(5)(6) 12/31/00(6)
- --------------------------------------------------------------------------------------------------------------------------------
ROCKLAND COUNTY, NEW YORK
SUFFERN
400 Rella Boulevard.............. 20.21 19.28 The Prudential Insurance Co. (21%), Provident Savings Bank
F.A. (20%), Allstate Insurance Company (19%)
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
100 Clearbrook Road (6).......... 17.05 15.79 MIM Corporation (18%), Amerihealth Inc. (13%)
101 Executive Boulevard.......... 20.20 19.47 Pennysaver Group Inc. (23%), MCS Business Solutions Inc.
(11%)
555 Taxter Road (7).............. 23.58 23.58 Fuji Photo Film USA Inc. (64%), Royal Indemnity Company
(12%)
565 Taxter Road (7).............. 22.74 22.68 Nextel of New York Inc. (29%), KLM Royal Dutch Airlines
(10%), Nationwide Mutual Insurance (10%)
570 Taxter Road.................. 20.12 19.32 New York State United Teachers Association (11%),
Wilder Balter Partners LLC (11%)
HAWTHORNE
30 Saw Mill River Road........... 20.99 17.31 IBM Corporation (100%)
1 Skyline Drive.................. 14.85 14.31 Boxx International Corp. (50%), Childtime Childcare Inc. (49%)
2 Skyline Drive.................. 16.14 14.66 MW Samara (56%), Perini Construction (43%)
7 Skyline Drive.................. 20.15 20.12 E.M. Industries Inc. (42%), Cortlandt Group Inc. (14%)
17 Skyline Drive................. 14.51 14.51 IBM Corporation (100%)
TARRYTOWN
200 White Plains Road............ 22.11 20.16 Allmerica Financial (17%), Independent Health Associates Inc.,
(17%), NYS Dept. of Environmental Services (13%)
220 White Plains Road............ 24.93 23.79 Eagle Family Foods Inc. (17%), ATM Services Inc. (10%)
WHITE PLAINS
1 Barker Avenue.................. 23.84 23.29 O'Connor McGuinn Conte (19%), United Skys Realty Corp.
(18%)
3 Barker Avenue.................. 20.53 19.98 Bernard C. Harris Publishing Co. Inc. (56%), TNS Intersearch
Corporation (10%)
50 Main Street................... 24.83 23.45 TMP Worldwide Inc. (15%), National Economic Research (10%)
11 Martine Avenue................ 25.16 23.29 Salomon Smith Barney Inc. (12%), McCarthy Fingar Donovan
Et Al (11%), David Worby (11%), Dean Witter Reynolds Inc.
(11%)
1 Water Street................... 22.98 22.23 Trigen Energy Company (48%), Stewart Title Insurance Co.
(16%)
21
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE,
NET LEASED 2000 2000 OFFICE/FLEX,
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE
LOCATION BUILT SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%)
- ------------------------------------------------------------------------------------------------------------
YONKERS
1 Executive Boulevard......... 1982 112,000 100.0 2,380 2,252 0.49
3 Executive Plaza.............. 1987 58,000 100.0 1,418 1,371 0.29
- ------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE 2,595,484 97.5 52,991 50,367 10.92
- ------------------------------------------------------------------------------------------------------------
CHESTER COUNTY, PENNSYLVANIA
BERWYN
1000 Westlakes Drive........... 1989 60,696 93.6 1,485 1,476 0.31
1055 Westlakes Drive........... 1990 118,487 42.9 2,305 2,305 0.48
1205 Westlakes Drive........... 1988 130,265 99.8 2,875 2,836 0.59
1235 Westlakes Drive........... 1986 134,902 100.0 3,229 3,130 0.67
DELAWARE COUNTY, PENNSYLVANIA
LESTER
100 Stevens Drive.............. 1986 95,000 100.0 1,703 1,593 0.35
200 Stevens Drive.............. 1987 208,000 100.0 4,227 4,011 0.87
300 Stevens Drive.............. 1992 68,000 92.3 1,414 1,359 0.29
MEDIA
1400 Providence Road - Center I 1986 100,000 86.4 1,797 1,713 0.37
1400 Providence Road - Center II 1990 160,000 80.3 2,923 2,752 0.60
MONTGOMERY COUNTY, PENNSYLVANIA
LOWER PROVIDENCE
1000 Madison Avenue............ 1990 100,700 100.0 1,803 1,769 0.37
PLYMOUTH MEETING
1150 Plymouth Meeting Mall..... 1970 167,748 91.8 2,766 2,718 0.57
2000
2000 AVERAGE TENANTS LEASING 10%
AVERAGE EFFECTIVE OR MORE OF NET
BASE RENT RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PER SQ.FT. PROPERTY AS OF
LOCATION ($)(4)(6) ($)(5)(6) 12/31/00 (6)
- ---------------------------------------------------------------------------------------------------------------------------
YONKERS
1 Executive Boulevard......... 21.25 20.11 Wise Contact US Optical Corp. (12%), AVR
Realty Company (11%), Protective Tech
International (11%), York, International
Agency Inc.(11%)
3 Executive Plaza............. 24.45 23.64 Montefiore Medical Center (45%), Metropolitan Life
Insurance (21%), Allstate Insurance Company (20%),
City & Suburban Federal Savings Bank (14%)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE 22.08 21.05
- -----------------------------------------------------------------------------------------------------------------------------
CHESTER COUNTY, PENNSYLVANIA
BERWYN
1000 Westlakes Drive.......... 26.14 25.98 Drinker Biddle & Reath (42%), PNC Bank, NA (38%)
1055 Westlakes Drive.......... 45.35 45.35 Regus Business Centre Corp. (34%)
1205 Westlakes Drive.......... 22.11 21.81 Provident Mutual Life Insurance Co. (35%), Oracle Corporation
30%), International Rehab Assoc. (10%)
1235 Westlakes Drive.......... 23.94 23.20 Pepper Hamilton & Scheetz L.L.P. (22%), Ratner & Prestia
(16%), Turner Investment Partners (10%)
DELAWARE COUNTY, PENNSYLVANIA
LESTER
100 Stevens Drive............. 17.93 16.77 Keystone Mercy Health Plan (100%)
200 Stevens Drive............. 20.32 19.28 Keystone Mercy Health Plan (100%)
300 Stevens Drive............. 22.53 21.65 Bluestone Software Inc. (39%), Keystone Mercy Health Plan
(33%)
MEDIA
1400 Providence Road - Center I 20.80 19.83 General Services Admin. (13%), Erie Insurance Company (11%)
1400 Providence Road - Center II 22.75 21.42 Barnett International (36%)
MONTGOMERY COUNTY, PENNSYLVANIA
LOWER PROVIDENCE
1000 Madison Avenue........... 17.90 17.57 Reality Online Inc. (42%), Banc One National Processing (21%),
Danka Corporation (14%), Seton Company (12%)
PLYMOUTH MEETING
1150 Plymouth Meeting Mall.... 17.96 17.65 Computer Learning Centers, Inc. (18%), Ken-Crest Services
(18%), Ikea US General Partners Inc. (14%), ECC Management
Services (13%)
22
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE,
NET LEASED 2000 2000 OFFICE/FLEX,
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%)
- ---------------------------------------------------------------------------------------------------------------
Five Sentry Parkway East......... 1984 91,600 100.0 1,499 1,494 0.31
Five Sentry Parkway West......... 1984 38,400 100.0 689 688 0.14
- --------------------------------------------------------------------------------------------------------------
TOTAL PENNSYLVANIA OFFICE 1,473,798 90.8 28,715 27,844 5.92
- --------------------------------------------------------------------------------------------------------------
FAIRFIELD COUNTY, CONNECTICUT
GREENWICH
500 West Putnam Avenue........... 1973 121,250 97.5 2,941 2,845 0.61
NORWALK
40 Richards Avenue............... 1985 145,487 96.8 3,077 2,927 0.63
SHELTON
1000 Bridgeport Avenue........... 1986 133,000 100.0 2,266 2,221 0.47
- --------------------------------------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE 399,737 98.1 8,284 7,993 1.71
- --------------------------------------------------------------------------------------------------------------
WASHINGTON, D.C.
1201 Connecticut Avenue, NW...... 1940 169,549 100.0 5,129 5,100 1.06
1400 L Street, NW................ 1987 159,000 100.0 5,990 5,896 1.24
1709 New York Avenue, NW......... 1972 166,000 100.0 7,227 7,076 1.49
- --------------------------------------------------------------------------------------------------------------
TOTAL DISTRICT OF COLUMBIA OFFICE 494,549 100.0 18,346 18,072 3.79
- --------------------------------------------------------------------------------------------------------------
PRINCE GEORGE'S COUNTY, MARYLAND
LANHAM
4200 Parliament Place............ 1989 122,000 92.9 2,543 2,442 0.52
- --------------------------------------------------------------------------------------------------------------
TOTAL MARYLAND OFFICE 122,000 92.9 2,543 2,442 0.52
- --------------------------------------------------------------------------------------------------------------
2000
2000 AVERAGE TENANTS LEASING 10%
AVERAGE EFFECTIVE OR MORE OF NET
BASE RENT RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PER SQ. FT. PROPERTY AS OF
LOCATION ($)(4)(6) ($)(5)(6) 12/31/00(6)
- ---------------------------------------------------------------------------------------------------------------------------
Five Sentry Parkway East......... 16.36 16.31 Merck & Co. Inc. (77%), Selas Fluid Processing Corp. (23%)
Five Sentry Parkway West......... 17.94 17.92 Merck & Co. Inc. (70%), David Cutler Group (30%)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL PENNSYLVANIA OFFICE 21.46 20.81
- ----------------------------------------------------------------------------------------------------------------------------
FAIRFIELD COUNTY, CONNECTICUT
GREENWICH
500 West Putnam Avenue........... 24.88 24.07 Hachette Filipacchi Magazines (27%), McMahan Securities Co.
LP (15%) Winklevoss Consultants Inc. (12%)
NORWALK
40 Richards Avenue............... 21.85 20.78 South Beach Beverage Co., LLC (14%), Media Horizons Inc.
(11%), Programmed Solutions Inc. (10%)
SHELTON
1000 Bridgeport Avenue........... 17.04 16.70 William Carter Company (23%), Weseley Software Development
(22%), Toyota Motor Credit Corporation (11%),
LandStar Gemini Inc. (11%)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE 21.13 20.39
- ----------------------------------------------------------------------------------------------------------------------------
WASHINGTON, D.C.
1201 Connecticut Avenue, NW...... 30.25 30.08 Zuckerman Spaeder Goldstein (29%), Leo A. Daly Company
(17%), RFE/RL Inc. (16%)
1400 L Street, NW................ 37.67 37.08 Winston & Strawn (68%)
1709 New York Avenue, NW......... 43.54 42.63 Board of Gov/Federal Reserve (70%), United States of America
-GSA (25%)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRICT OF COLUMBIA OFFICE 37.10 36.54
- ----------------------------------------------------------------------------------------------------------------------------
PRINCE GEORGE'S COUNTY, MARYLAND
LANHAM
4200 Parliament Place............ 22.44 21.55 Group I Software Inc. (45%), Infinity Broadcasting Company
(16%), State Farm Mutual Auto Ins. Co. (11%)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL MARYLAND OFFICE 22.44 21.55
- ----------------------------------------------------------------------------------------------------------------------------
23
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
NET LEASED 2000 2000
RENTABLE AS OF BASE EFFECTIVE
PROPERTY YEAR AREA 12/31/00 RENT RENT
LOCATION BUILT (SQ. FT.) (%) (1) ($000'S) (2)(6) ($000'S) (3)(6)
- -----------------------------------------------------------------------------------------------
BEXAR COUNTY, TEXAS
SAN ANTONIO
200 Concord Plaza Drive.......... 1986 248,700 97.4 4,371 4,324
84 N.E. Loop 410................. 1971 187,312 89.9 2,545 2,528
1777 N.E. Loop 410............... 1986 256,137 83.0 3,718 3,631
111 Soledad...................... 1918 248,153 93.0 2,621 2,532
COLLIN COUNTY, TEXAS
PLANO
555 Republic Place............... 1986 97,889 85.0 1,421 1,346
DALLAS COUNTY,TEXAS
DALLAS
3030 LBJ Freeway (6)............. 1984 367,018 96.8 6,543 6,278
3100 Monticello.................. 1984 173,837 94.6 2,752 2,682
8214 Westchester................. 1983 95,509 81.4 1,242 1,192
IRVING
2300 Valley View................. 1985 142,634 97.4 1,903 1,786
RICHARDSON
1122 Alma Road................... 1977 82,576 100.0 607 607
HARRIS COUNTY, TEXAS
HOUSTON
14511 Falling Creek.............. 1982 70,999 98.8 924 886
5225 Katy Freeway................ 1983 112,213 97.1 1,468 1,338
5300 Memorial.................... 1982 155,099 98.8 2,298 2,257
1717 St. James Place............. 1975 109,574 93.2 1,348 1,298
1770 St. James Place............. 1973 103,689 84.2 1,263 1,205
10497 Town & Country Way......... 1981 148,434 78.4 1,766 1,666
POTTER COUNTY, TEXAS
AMARILLO
6900 IH - 40 West (8)............ 1986 -- -- 190 190
PERCENTAGE
OF TOTAL 2000 2000
OFFICE, 2000 AVERAGE TENANTS LEASING 10%
OFFICE/FLEX, AVERAGE EFFECTIVE OR MORE OF NET
AND INDUSTRIAL/ BASE RENT RENT RENTABLE AREA PER
WAREHOUSE PER SQ. FT. PER SQ. FT. PROPERTY AS OF
BASE RENT (%) ($)(4)(6) ($)(5)(6) 12/31/00 (6)
- ---------------------------------------------------------------------------------------------------------------------------------
BEXAR COUNTY, TEXAS
SAN ANTONIO
200 Concord Plaza Drive.......... 0.90 18.04 17.85 Merrill Lynch Pierce Fenner & Smith (12%)
84 N.E. Loop 410................. 0.53 15.11 15.01 Pacificare of Texas, Inc. (30%), KBL Cable, Inc. (26%),
Kraft General Foods Inc. (25%)
1777 N.E. Loop 410............... 0.76 17.49 17.08 --
111 Soledad...................... 0.54 11.36 10.97 SBC Communications, Inc. (38%)
COLLIN COUNTY, TEXAS
PLANO
555 Republic Place............... 0.29 17.08 16.18 William F. Smith Enterprises (22%),
Target Corporation (14%)
DALLAS COUNTY,TEXAS
DALLAS
3030 LBJ Freeway (6)............. 1.35 18.42 17.67 Club Corporation of America (39%)
3100 Monticello.................. 0.57 16.73 16.31 Insignia Commercial, Inc. (23%), Time Marketing
Corporation/Evans Group (12%),
Heath Insurance Brokers, Inc. (11%), Tarragon Realty Adv.
Inc. (11%), Summit Global Partners Texas (10%)
8214 Westchester................. 0.26 15.98 15.33 Preston Business Center, Inc. (16%), Malone Mortgage
Company America, Inc. (14%), State Bank & Trust Co. (11%)
IRVING
2300 Valley View................. 0.39 13.70 12.86 Alltel Information Services, Inc. (18%), Computer Task
Group, Inc. (12%), Tricon Restaurant Services (12%),
US Personnel Inc. (12%)
RICHARDSON
1122 Alma Road................... 0.13 7.35 7.35 MCI Telecommunications Corp. (100%)
HARRIS COUNTY, TEXAS
HOUSTON
14511 Falling Creek.............. 0.19 13.17 12.63 Nationwide Mutual Insurance Company (17%)
5225 Katy Freeway................ 0.30 13.47 12.28 State of Texas (17%)
5300 Memorial.................... 0.47 15.00 14.73 Drypers Corporation (20%), Datavox, Inc. (20%),
HCI Chemicals USA, Inc. (19%)
1717 St. James Place............. 0.28 13.20 12.71 MCX Corp (14%)
1770 St. James Place............. 0.26 14.47 13.80 Neosoft Inc. (10%), Houston Interweb Design Inc. (10%)
10497 Town & Country Way......... 0.36 15.18 14.32 Vastar Resources, Inc. (23%)
POTTER COUNTY, TEXAS
AMARILLO
6900 IH - 40 West (8)............ 0.04 -- -- --
24
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
NET LEASED 2000 2000
RENTABLE AS OF BASE EFFECTIVE
PROPERTY YEAR AREA 12/31/00 RENT RENT
LOCATION BUILT (SQ. FT.) (%) (1) ($000'S) (2)(6) ($000'S) (3)(6)
- ------------------------------------------------------------------------------------------------
TARRANT COUNTY, TEXAS
EULESS
150 West Parkway................. 1984 74,429 91.0 1,062 1,030
TRAVIS COUNTY, TEXAS
AUSTIN
1250 Capital of Texas Hwy. South (8)1985 -- -- 4,164 4,106
- ------------------------------------------------------------------------------------------------
TOTAL TEXAS OFFICE 2,674,202 92.1 42,206 40,882
- ------------------------------------------------------------------------------------------------
MARICOPA COUNTY, ARIZONA
GLENDALE
5551 West Talavi Boulevard....... 1991 181,596 100.0 1,730 1,722
PHOENIX
19640 North 31st Street.......... 1990 124,171 100.0 1,506 1,453
SCOTTSDALE
9060 E. Via Linda Boulevard...... 1984 111,200 100.0 2,404 2,404
- ------------------------------------------------------------------------------------------------
TOTAL ARIZONA OFFICE 416,967 100.0 5,640 5,579
- ------------------------------------------------------------------------------------------------
ARAPAHOE COUNTY, COLORADO
AURORA
750 South Richfield Street....... 1997 108,240 100.0 2,911 2,911
DENVER
400 South Colorado Boulevard..... 1983 125,415 97.8 2,182 2,108
ENGLEWOOD
9359 East Nichols Avenue......... 1997 72,610 100.0 903 903
5350 South Roslyn Street......... 1982 63,754 100.0 1,054 1,033
BOULDER COUNTY, COLORADO
BROOMFIELD
105 South Technology Court....... 1997 37,574 100.0 541 541
303 South Technology Court-A..... 1997 34,454 100.0 396 396
303 South Technology Court-B..... 1997 40,416 100.0 464 464
PERCENTAGE
OF TOTAL 2000 2000
OFFICE, 2000 AVERAGE TENANTS LEASING 10%
OFFICE/FLEX, AVERAGE EFFECTIVE OR MORE OF NET
AND INDUSTRIAL/ BASE RENT RENT RENTABLE AREA PER
WAREHOUSE PER SQ. FT. PER SQ. FT. PROPERTY AS OF
BASE RENT (%) ($) (4)(6) ($) (5)(6) 12/31/00 (6)
- --------------------------------------------------------------------------------------------------------------------------------
TARRANT COUNTY, TEXAS
EULESS
150 West Parkway................. 0.22 15.68 15.21 Warrantech Automotive, Inc. (40%), Mike Bowman
Realtors/Century 21 Inc. (17%), Landmark Bank-Mid
Cities (16%)
TRAVIS COUNTY, TEXAS
AUSTIN
1250 Capital of Texas Hwy. South (8) 0.86 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL TEXAS OFFICE 8.70 17.14 16.60
- -----------------------------------------------------------------------------------------------------------------------------------
MARICOPA COUNTY, ARIZONA
GLENDALE
5551 West Talavi Boulevard....... 0.36 9.53 9.48 Honeywell, Inc. (100%)
PHOENIX
19640 North 31st Street.......... 0.31 12.13 11.70 American Express Travel Related Services Co., Inc.
(100%)
SCOTTSDALE
9060 E. Via Linda Boulevard...... 0.50 21.62 21.62 Sentry Insurance (63%), PCS Health Systems Inc. (37%)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ARIZONA OFFICE 1.17 13.53 13.38
- -----------------------------------------------------------------------------------------------------------------------------------
ARAPAHOE COUNTY, COLORADO
AURORA
750 South Richfield Street....... 0.60 26.89 26.89 T.R.W. Inc. (100%)
DENVER
400 South Colorado Boulevard..... 0.45 17.79 17.19 Community Health Plan (32%), State of Colorado (12%),
Wells Fargo Bank West NA (11%), Senter Goldfarb &
Rice LLC (11%)
ENGLEWOOD
9359 East Nichols Avenue......... 0.19 12.44 12.44 First Tennessee Bank NA (100%)
5350 South Roslyn Street......... 0.22 16.53 16.20 Alliance Metro Real Estate (19%), Business Word Inc.
(17%)
BOULDER COUNTY, COLORADO
BROOMFIELD
105 South Technology Court....... 0.11 14.40 14.40 Sun Microsystems Inc. (100%)
303 South Technology Court-A..... 0.08 11.49 11.49 Sun Microsystems Inc. (100%)
303 South Technology Court-B..... 0.10 11.48 11.48 Sun Microsystems Inc. (100%)
25
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE, 2000
NET LEASED 2000 2000 OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%) ($)(4)(6)
- ----------------------------------------------------------------------------------------------------------------------------
LOUISVILLE
248 Centennial Parkway........... 1996 39,266 100.0 508 507 0.10 12.94
1172 Century Drive............... 1996 49,566 100.0 641 639 0.13 12.93
285 Century Place................ 1997 69,145 100.0 1,087 1,087 0.22 15.72
DENVER COUNTY, COLORADO
DENVER
3600 South Yosemite.............. 1974 133,743 100.0 1,287 1,287 0.27 9.62
DOUGLAS COUNTY, COLORADO
ENGLEWOOD
400 Inverness Drive.............. 1997 111,608 99.9 2,777 2,759 0.57 24.91
67 Inverness Drive East.......... 1996 54,280 100.0 680 677 0.14 12.53
384 Inverness Drive South........ 1985 51,523 100.0 833 809 0.17 16.17
5975 South Quebec Street......... 1996 102,877 99.8 2,373 2,336 0.49 23.11
PARKER
9777 Pyramid Court............... 1995 120,281 100.0 1,323 1,323 0.27 11.00
EL PASO COUNTY, COLORADO
COLORADO SPRINGS
8415 Explorer.................... 1998 47,368 100.0 611 605 0.13 12.90
1975 Research Parkway............ 1997 115,250 100.0 1,683 1,604 0.35 14.60
2375 Telstar Drive............... 1998 47,369 100.0 612 605 0.13 12.92
JEFFERSON COUNTY, COLORADO
LAKEWOOD
141 Union Boulevard.............. 1985 63,600 98.9 1,111 1,047 0.23 17.66
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL COLORADO OFFICE 1,488,339 99.7 23,977 23,641 4.95 16.15
- -----------------------------------------------------------------------------------------------------------------------------
2000
AVERAGE TENANTS LEASING 10%
EFFECTIVE OR MORE OF NET
RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PROPERTY AS OF
LOCATION ($) (5) (6) 12/31/00 (6)
- --------------------------------- ------------ ----------------------------------------------------
LOUISVILLE
248 Centennial Parkway........... 12.91 Walnut Brewery Inc. (59%), Aircell Inc. (28%)
1172 Century Drive............... 12.89 Skyconnect Inc. (40%), Evolving Systems Inc. (22%),
MCI Systemhouse Corp. (22%), RX Kinetix Inc. (16%)
285 Century Place................ 15.72 HBO & Company of Georgia (100%)
DENVER COUNTY, COLORADO
DENVER
3600 South Yosemite.............. 9.62 MDC Holding Inc. (100%)
DOUGLAS COUNTY, COLORADO
ENGLEWOOD
400 Inverness Drive.............. 24.75 Convergent Communications Inc. (26%), Ciber Inc. (22%),
Compuware Corp. (19%), Ani Colorado Inc./Alliance Int'l (16%)
67 Inverness Drive East.......... 12.47 T-Netix Inc. (69%), Convergent Communications Inc. (31%)
384 Inverness Drive South........ 15.70 Quickpen International Corp. (37%), United States of America -
GSA (19%), Worth Group Architects (10%)
5975 South Quebec Street......... 22.75 Northern Telecom Inc. (43%), Silicon Graphics Inc. (28%),
Qwest Communications Corp. (15%)
PARKER
9777 Pyramid Court............... 11.00 Evolving System Inc. (100%)
EL PASO COUNTY, COLORADO
COLORADO SPRINGS
8415 Explorer.................... 12.77 Enterprise Systems Group Inc. (52%), URS Greiner Consultants
Inc. (39%)
1975 Research Parkway............ 13.92 Bombardier Capital Florida Inc. (52%), Concert Management
Services (18%), General Dynamics Govt Systems (17%)
2375 Telstar Drive............... 12.77 Narwhal Corporation (45%), Memorial Hospital (39%),
Aerotek Inc. (14%)
JEFFERSON COUNTY, COLORADO
LAKEWOOD
141 Union Boulevard.............. 16.65 Arbitration Forums Inc. (18%), Frontier Real Estate - BH&G
(15%)
- ------------------------------------------------------------------------------------------------------------------
TOTAL COLORADO OFFICE 15.92
- ------------------------------------------------------------------------------------------------------------------
26
PROPERTY LISTING
OFFICE PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE, 2000
NET LEASED 2000 2000 OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%) ($)(4)(6)
- -------------------------------- ----- --------- ---------- -------------- -------------- ---------------- -----------
SAN FRANCISCO COUNTY, CALIFORNIA
SAN FRANCISCO
795 Folsom Street................ 1977 183,445 100.0 6,170 5,426 1.27 33.63
760 Market Street................ 1908 267,446 98.0 8,140 7,965 1.68 31.06
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CALIFORNIA OFFICE 450,891 98.8 14,310 13,391 2.95 32.12
- -------------------------------------------------------------------------------------------------------------------------------
HILLSBOROUGH COUNTY, FLORIDA
TAMPA
501 Kennedy Boulevard............ 1982 297,429 90.8 3,657 3,419 0.75 13.54
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL FLORIDA OFFICE 297,429 90.8 3,657 3,419 0.75 13.54
- -------------------------------------------------------------------------------------------------------------------------------
POLK COUNTY, IOWA
WEST DES MOINES
2600 Westown Parkway............. 1988 72,265 100.0 1,101 1,014 0.23 15.24
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL IOWA OFFICE 72,265 100.0 1,101 1,014 0.23 15.24
- -------------------------------------------------------------------------------------------------------------------------------
DOUGLAS COUNTY, NEBRASKA
OMAHA
210 South 16th Street (8)........ 1894 -- -- 2,876 2,875 0.59 --
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL NEBRASKA OFFICE -- -- 2,876 2,875 0.59 --
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES 21,916,470 96.8 434,190 418,441 89.59 20.87
===============================================================================================================================
2000
AVERAGE TENANTS LEASING 10%
EFFECTIVE OR MORE OF NET
RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PROPERTY AS OF
LOCATION ($)(5)(6) 12/31/00 (6)
- -----------------------------------------------------------------------------------------------------------------
SAN FRANCISCO COUNTY, CALIFORNIA
SAN FRANCISCO
795 Folsom Street................ 29.58 Move.com Operations Inc. (51%), AT&T Corp. (34%), Regus
Business Centre Corp. (15%)
760 Market Street................ 30.39 R.H. Macy & Company, Inc. (19%)
- -----------------------------------------------------------------------------------------------------------------
TOTAL CALIFORNIA OFFICE 30.06
- -----------------------------------------------------------------------------------------------------------------
HILLSBOROUGH COUNTY, FLORIDA
TAMPA
501 Kennedy Boulevard............ 12.66 Fowler, White, Gillen, Boggs, Villareal & Banker, PA (33%),
Sykes Enterprises Inc. (22%)
- -----------------------------------------------------------------------------------------------------------------
TOTAL FLORIDA OFFICE 12.66
- -----------------------------------------------------------------------------------------------------------------
POLK COUNTY, IOWA
WEST DES MOINES
2600 Westown Parkway............. 14.03 Magellan Behavorial Health (28%), New England Mutual Life
Insurance Company (15%), American Express Financial
Advisors, Inc. (15%), MCI Worldcom Communications (14%)
- -----------------------------------------------------------------------------------------------------------------
TOTAL IOWA OFFICE 14.03
- -----------------------------------------------------------------------------------------------------------------
DOUGLAS COUNTY, NEBRASKA
OMAHA
210 South 16th Street (8)........ -- --
- -----------------------------------------------------------------------------------------------------------------
TOTAL NEBRASKA OFFICE -- --
- -----------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES 20.12
=================================================================================================================
27
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE, 2000
NET LEASED 2000 2000 OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%) (1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%) ($)(4)(6)
- --------------------------------------------------------------------------------------------------------------------------
BURLINGTON COUNTY, NEW JERSEY
BURLINGTON
3 Terri Lane..................... 1991 64,500 68.8 355 343 0.07 8.00
5 Terri Lane..................... 1992 74,555 88.6 394 385 0.08 5.96
MOORESTOWN
2 Commerce Drive................. 1986 49,000 100.0 363 363 0.07 7.41
101 Commerce Drive............... 1988 64,700 100.0 336 296 0.07 5.19
102 Commerce Drive............... 1987 38,400 87.5 185 184 0.04 5.51
201 Commerce Drive............... 1986 38,400 100.0 196 191 0.04 5.10
202 Commerce Drive............... 1988 51,200 100.0 268 268 0.06 5.23
1 Executive Drive................ 1989 20,570 100.0 172 143 0.04 8.36
2 Executive Drive (7)............ 1988 60,800 100.0 352 343 0.07 7.47
101 Executive Drive.............. 1990 29,355 80.0 140 119 0.03 5.96
102 Executive Drive.............. 1990 64,000 90.0 351 308 0.07 6.09
225 Executive Drive.............. 1990 50,600 86.2 333 312 0.07 7.63
97 Foster Road................... 1982 43,200 100.0 186 186 0.04 4.31
1507 Lancer Drive................ 1995 32,700 100.0 139 130 0.03 4.25
1510 Lancer Drive................ 1998 88,000 100.0 370 370 0.08 4.20
1256 North Church Street......... 1984 63,495 49.9 194 165 0.04 6.12
840 North Lenola Road............ 1995 38,300 100.0 266 265 0.05 6.95
844 North Lenola Road............ 1995 28,670 100.0 213 213 0.04 7.43
915 North Lenola Road (7)........ 1998 52,488 100.0 131 131 0.03 5.33
2000
AVERAGE TENANTS LEASING 10%
EFFECTIVE OR MORE OF NET
RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PROPERTY AS OF
LOCATION ($)(5)(6) 12/31/00 (6)
- ---------------------------------------------------------------------------------------------------------------
BURLINGTON COUNTY, NEW JERSEY
BURLINGTON
3 Terri Lane..................... 7.73 Tempel Steel Company (18%), ATC Group Services Inc. (10%),
General Service Administrators (10%)
5 Terri Lane..................... 5.83 United Rentals Inc. (22%), Lykes Dispensing Systems Inc.
(20%), West Electronics Inc. (12%)
MOORESTOWN
2 Commerce Drive................. 7.41 Computer Sciences Corporation (100%)
101 Commerce Drive............... 4.57 Beckett Corporation (100%)
102 Commerce Drive............... 5.48 Nelson Associates (25%), American Banknote Card Svcs. (13%),
D&A Eastern Fasteners Inc. (13%), Moorestown Weightlifting
Club (13%), Opex Corporation (13%), RGP Impressions Inc.
(13%)
201 Commerce Drive............... 4.97 Flow Thru Metals Inc. (25%), Franchise Stores Realty Corp.
(25%), RE/Com Group (25%), Tropicana Products Inc. (25%)
202 Commerce Drive............... 5.23 Standard Register Co. (100%)
1 Executive Drive................ 6.95 Bechtel Infrastructure Corp. (48%), T.T.I. (18%)
2 Executive Drive (7)............ 7.28 CSI Computer Specialists Inc. (32%), Total Product Supply Inc.
(18%), On-Campus Marketing Concepts (16%),
Nia Zia D/B/A Alpha Academy (10%)
101 Executive Drive.............. 5.07 Bayada Nurses Inc. (36%), Foundations Inc. (15%), ABC
Financial (10%), Bechtel Infrastructure Corp. (10%)
102 Executive Drive.............. 5.35 Comtrex Systems Corp. (29%), Kencom Communications &
Svcs. (21%), PDLJB Corporation (20%), Schermerhorn Bros. Co.
(20%)
225 Executive Drive.............. 7.15 Eastern Research Inc. (77%)
97 Foster Road................... 4.31 Consumer Response Company Inc. (50%), Pioneer and Company
Inc. (33%), Colornet Inc. (17%)
1507 Lancer Drive................ 3.98 Tad's Delivery Service Inc. (100%)
1510 Lancer Drive................ 4.20 Tad's Delivery Service Inc. (100%)
1256 North Church Street......... 5.21 James C. Anderson Associates (30%), Ketec Inc. (20%)
840 North Lenola Road............ 6.92 Millar Elevator Service Co. (31%), Omega Storage Inc. (31%),
Technology Service Solutions (25%), Computer Integration
Services (13%)
844 North Lenola Road............ 7.43 Lockheed Martin Corp. (41%), Curbell Inc. (33%), James J.
Martin Inc. (25%)
915 North Lenola Road (7)........ 5.33 Premier Percussion USA Inc. (37%), Don-Mar of Connecticut,
LLC (23%), Riley Sales Inc. (18%), United States Postal Service
(13%)
28
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE, 2000
NET LEASED 2000 2000 OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%) (1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%) ($)(4)(6)
- -------------------------------------------------------------------------------------------------------------------------
30 Twosome Drive................. 1997 39,675 100.0 224 224 0.05 5.65
40 Twosome Drive................. 1996 40,265 93.4 165 165 0.03 4.39
50 Twosome Drive................. 1997 34,075 100.0 262 262 0.05 7.69
WEST DEPTFORD
1451 Metropolitan Drive.......... 1996 21,600 100.0 148 148 0.03 6.85
MERCER COUNTY, NEW JERSEY
HAMILTON TOWNSHIP
100 Horizon Drive................ 1989 13,275 100.0 46 43 0.01 3.47
200 Horizon Drive................ 1991 45,770 100.0 454 439 0.09 9.92
300 Horizon Drive................ 1989 69,780 100.0 703 690 0.15 10.07
500 Horizon Drive................ 1990 41,205 57.8 259 231 0.05 10.87
MONMOUTH COUNTY, NEW JERSEY
WALL TOWNSHIP
1325 Campus Parkway.............. 1988 35,000 100.0 370 354 0.08 10.57
1340 Campus Parkway.............. 1992 72,502 100.0 813 709 0.17 11.21
1345 Campus Parkway.............. 1995 76,300 100.0 710 706 0.15 9.31
1433 Highway 34.................. 1985 69,020 100.0 557 479 0.11 8.07
1320 Wyckoff Avenue.............. 1986 20,336 100.0 132 125 0.03 6.49
1324 Wyckoff Avenue.............. 1987 21,168 100.0 183 147 0.04 8.65
2000
AVERAGE TENANTS LEASING 10%
EFFECTIVE OR MORE OF NET
RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PROPERTY AS OF
LOCATION ($)(5)(6) 12/31/00 (6)
- -------------------------------------------------------------------------------------------------------------
30 Twosome Drive................. 5.65 Hartman Cards Inc. (28%), Sagot Office Interiors Inc. (24%),
Aramark Sports Entertainment (14%), The Closet Factory (12%),
C&L Packaging Inc. (12%), Mosler Inc. (10%)
40 Twosome Drive................. 4.39 Neighborcare - TCI Inc. (49%), Marconi Communications Inc.
(30%), Bellstar Inc. (14%)
50 Twosome Drive................. 7.69 Wells Fargo Alarm Services (44%), Sussex Wine Merchants
(42%), McCarthy Associates Inc. (14%)
WEST DEPTFORD
1451 Metropolitan Drive.......... 6.85 Garlock Bearings Inc. (100%)
MERCER COUNTY, NEW JERSEY
HAMILTON TOWNSHIP
100 Horizon Drive................ 3.24 PSEG Energy Technologies Inc. (100%)
200 Horizon Drive................ 9.59 O.H.M. Remediation Services Corp. (100%)
300 Horizon Drive................ 9.89 State of New Jersey/DEP (50%), Lucent Technologies Inc. (26%),
Ward North America (14%), Stephen Gould of Pennsylvania
(10%)
500 Horizon Drive................ 9.70 Lakeview Child Center Inc. (19%), New Jersey Builders
Assoc. (14%), Diedre Moire Corp. (11%)
MONMOUTH COUNTY, NEW JERSEY
WALL TOWNSHIP
1325 Campus Parkway.............. 10.11 Cisco Systems Inc. (100%)
1340 Campus Parkway.............. 9.78 Groundwater & Environmental Services Inc. (33%), GEAC
Computers Inc. (22%), State Farm Mutual Insurance (17%),
Association For Retarded Citizens (11%), Digital Lightwave, Inc.
(11%)
1345 Campus Parkway.............. 9.25 Depot America, Inc. (37%), Quadramed Corp. (23%), De Vine
Corp. (10%)
1433 Highway 34.................. 6.94 State Farm Mutual Insurance Co. (48%), CACI Technologies
Inc. (18%), Depot America (12%), New Jersey
Natural Gas Co (11%)
1320 Wyckoff Avenue.............. 6.15 The County of Monmouth (100%)
1324 Wyckoff Avenue.............. 6.94 Blackhawk Management Corp. (53%), Systems Fulfillment
(25%), Supply Saver, Inc. (22%)
29
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE,
NET LEASED 2000 2000 OFFICE/FLEX,
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE
LOCATION BUILT (SQ. FT.) (%) (1) ($000'S) (2) (6)($000'S)(3)(6) BASE RENT(%)
- --------------------------------------------------------------------------------------------------------------
PASSAIC COUNTY, NEW JERSEY
TOTOWA
1 Center Court................... 1999 38,961 84.0 136 111 0.03
2 Center Court................... 1998 30,600 99.3 348 237 0.07
11 Commerce Way.................. 1989 47,025 100.0 513 447 0.11
20 Commerce Way.................. 1992 42,540 100.0 446 442 0.09
29 Commerce Way.................. 1990 48,930 100.0 504 450 0.10
40 Commerce Way.................. 1987 50,576 85.7 534 439 0.11
45 Commerce Way.................. 1992 51,207 100.0 496 452 0.10
60 Commerce Way.................. 1988 50,333 100.0 457 387 0.09
80 Commerce Way.................. 1996 22,500 100.0 282 176 0.06
100 Commerce Way................. 1996 24,600 100.0 308 192 0.06
120 Commerce Way................. 1994 9,024 100.0 86 81 0.02
140 Commerce Way................. 1994 26,881 99.5 256 245 0.05
- --------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE/FLEX 1,996,081 94.1 14,336 13,096 2.95
- --------------------------------------------------------------------------------------------------------------
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
11 Clearbrook Road............... 1974 31,800 100.0 316 310 0.07
75 Clearbrook Road............... 1990 32,720 100.0 816 816 0.17
150 Clearbrook Road.............. 1975 74,900 93.8 1,029 998 0.21
2000
2000 AVERAGE TENANTS LEASING 10%
AVERAGE EFFECTIVE OR MORE OF NET
BASE RENT RENT RENTABLE AREA PER
PER SQ. FT. PER SQ. FT. PROPERTY AS OF
($) (4) (6) ($) (5) (6) 12/31/00 (6)
---------------------------------------------------------------
PASSAIC COUNTY, NEW JERSEY
TOTOWA
1 Center Court................... 4.16 3.39 Rock-Tenn Converting Company (46%), Eizo Nanao
Technologies Inc. (38%)
2 Center Court................... 11.45 7.80 Nomadic Display (36%), Electro Rent Corp. (33%), Alpine
Electronics of America (30%)
11 Commerce Way.................. 10.91 9.51 Coram Alternative Site Services (56%), D.A. Kopp & Associates
Inc. (22%), Olsten Health Services (11%), Ericsson Inc. (11%)
20 Commerce Way.................. 10.48 10.39 Emersub LXXXVII Inc. (41%), Lodan Totowa Inc. F/K/A
Emersub (21%), Dish Network Service Corp. (14%)
29 Commerce Way.................. 10.30 9.20 Sandvik Sorting Systems, Inc. (44%), Patterson Dental Supply
Inc. (23%), Fujitec America Inc. (22%), Williams
Communications LLC (11%)
40 Commerce Way.................. 12.32 10.13 Thomson Electron Tubes (43%), Intertek Testing Services Inc.
(29%), System 3R USA Inc. (14%)
45 Commerce Way.................. 9.69 8.83 Ericsson Inc. (52%), Woodward Clyde
Consultants (27%), Oakwood Corporate Housing (21%)
60 Commerce Way.................. 9.08 7.69 Ericsson Inc. (29%), Jen Mar Graphics Inc. (27%), Dolan &
Traynor Building Prod (16%), Prestige Telecom Ltd. (14%),
HW Exhibits (14%)
80 Commerce Way.................. 12.53 7.82 Learning Stop LLC (40%), Idexx Veterinary Services (37%),
Inter-American Safety Council (12%)
100 Commerce Way................. 12.52 7.80 Pharmerica Inc. (34%), Minolta Business Systems Inc. (34%),
CCH Incorporated (32%)
120 Commerce Way................. 9.53 8.98 Senior Care Centers of America (100%)
140 Commerce Way................. 9.57 9.16 Universal Hospital Services (29%), Advanced Image Systems Inc.
(20%), MSR Publications Inc. (19%), Holder Group Inc. (11%),
Alpha Testing (10%), Showa Tool USA, Inc. (10%)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL NEW JERSEY OFFICE/FLEX 7.77 7.11
- ---------------------------------------------------------------------------------------------------------------------------------
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
11 Clearbrook Road............... 9.94 9.75 Creative Medical Supplies (28%), Eastern Jungle Gym Inc.
(27%), MCS Marketing Group Inc. (24%), Treetops Inc. (21%)
75 Clearbrook Road............... 24.94 24.94 Evening Out Inc. (100%)
150 Clearbrook Road.............. 14.65 14.21 Sportive Ventures I LLC (24%), Philips Medical Systems N.A.
(18%), Transwestern Publications (12%), ADT Security
Services Inc. (11%)
30
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE,
NET LEASED 2000 2000 OFFICE/FLEX,
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE
LOCATION BUILT (SQ. FT.) (%) (1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%)
- ------------------------------------------------------------------------------------------------------------
175 Clearbrook Road.............. 1973 98,900 98.5 1,450 1,405 0.30
200 Clearbrook Road.............. 1974 94,000 99.8 1,208 1,139 0.25
250 Clearbrook Road.............. 1973 155,000 94.5 1,331 1,256 0.27
50 Executive Boulevard........... 1969 45,200 97.2 382 373 0.08
77 Executive Boulevard........... 1977 13,000 55.4 130 128 0.03
85 Executive Boulevard........... 1968 31,000 99.4 396 388 0.08
300 Executive Boulevard.......... 1970 60,000 99.7 597 577 0.12
350 Executive Boulevard.......... 1970 15,400 98.8 252 252 0.05
399 Executive Boulevard.......... 1962 80,000 100.0 968 931 0.20
400 Executive Boulevard.......... 1970 42,200 100.0 645 583 0.13
500 Executive Boulevard.......... 1970 41,600 100.0 614 587 0.13
525 Executive Boulevard.......... 1972 61,700 100.0 888 864 0.18
1 Westchester Plaza.............. 1967 25,000 100.0 301 286 0.06
2 Westchester Plaza.............. 1968 25,000 100.0 447 436 0.09
3 Westchester Plaza.............. 1969 93,500 100.0 1,142 1,126 0.24
4 Westchester Plaza.............. 1969 44,700 99.8 629 604 0.13
5 Westchester Plaza.............. 1969 20,000 100.0 304 295 0.06
6 Westchester Plaza.............. 1968 20,000 100.0 296 278 0.06
7 Westchester Plaza.............. 1972 46,200 100.0 649 641 0.13
8 Westchester Plaza.............. 1971 67,200 97.2 881 776 0.18
HAWTHORNE
200 Saw Mill River Road.......... 1965 51,100 100.0 626 599 0.13
2000 AVERAGE TENANTS LEASING 10%
AVERAGE EFFECTIVE OR MORE OF NET
BASE RENT RENT RENTABLE AREA PER
PER SQ. FT. PER SQ. FT. PROPERTY AS OF
($)(4)(6) ($)(5)(6) 12/31/00 (6)
-----------------------------------------------------------------------------------------
175 Clearbrook Road.............. 14.88 14.42 Nextel of New York Inc. (35%), Hypres Inc. (15%), Perk-Up Inc.
(10%)
200 Clearbrook Road.............. 12.88 12.14 Brunschwig & Fils Inc. (39%), Proftech Corp (20%)
250 Clearbrook Road.............. 9.09 8.57 AFP Imaging Corp (31%), The Artina Group Inc. (14%), Prints
Plus Inc. (13%), Conri Services Inc. (10%), Merrill-Sharpe
Ltd (10%)
50 Executive Boulevard........... 8.69 8.49 MMO Music Group (74%), Medcon Financial Services Inc.
(22%)
77 Executive Boulevard........... 18.05 17.77 Bright Horizons Children Center (55%)
85 Executive Boulevard........... 12.85 12.59 VREX Inc (49%), Westhab Inc. (21%), Wald Optics Laboratory
Inc. (13%), Saturn II Systems Inc. (11%)
300 Executive Boulevard.......... 9.98 9.65 Princeton Ski Outlet Corp. (57%), Varta Batteries Inc. (31%),
LMG International Inc. (12%)
350 Executive Boulevard.......... 16.56 16.56 Copytex Corp. (99%)
399 Executive Boulevard.......... 12.10 11.64 American Banknote Holographic (73%), Wine Enthusiast Inc.
(15%), Brandon of Westchester (12%)
400 Executive Boulevard.......... 15.28 13.82 Baker Engineering NY, Inc. (39%), Ultra Fabrics Inc. (25%)
500 Executive Boulevard.......... 14.76 14.11 Original Consume (36%), Dover Elevator Co. (16%), Angelica
Corp. (16%), Olympia Sports Inc. (13%), Philips Medical
Systems N.A. (13%)
525 Executive Boulevard.......... 14.39 14.00 Vie De France Yamazaki Inc. (59%), New York Blood Center
Inc. (21%)
1 Westchester Plaza.............. 12.04 11.44 British Apparel (40%), Thin Film Concepts Inc. (20%),
RS Knapp (20%), JT Lynne Representatives (20%)
2 Westchester Plaza.............. 17.88 17.44 Board of Cooperative Education (80%), Kin-Tronics (11%)
3 Westchester Plaza.............. 12.21 12.04 Reveo Inc. (51%), Kangol Headwear (28%), Esperya USA Inc.
(12%)
4 Westchester Plaza.............. 14.10 13.54 Metropolitan Life Insurance (38%), EEV Inc. (34%), Arsys
Innotech Corp. (13%)
5 Westchester Plaza.............. 15.20 14.75 Fujitsu Network Communications (38%), Rokonet Industries
USA Inc. (25%), UA Plumbers Education Fund (25%),
Furniture Etc. Inc. (12%)
6 Westchester Plaza.............. 14.80 13.90 Pinkerton Systems Integration (28%), Xerox Corporation (28%),
Game Parts Inc. (24%), Girard Rubber Co. (12%)
7 Westchester Plaza.............. 14.05 13.87 Emigrant Savings Bank (69%), Fire End Croker Corp. (22%)
8 Westchester Plaza.............. 13.49 11.88 Mamiya America Corp. (24%), Ciba Specialty Chemicals Corp.
(17%), Kubra Data Transfer Ltd. (15%)
HAWTHORNE
200 Saw Mill River Road.......... 12.25 11.72 Walter DeGruyter Inc. (21%), Abscoa Industries Inc. (18%),
TJ Quatroni Plumbing and Heat (17%), Cablevision Lightpath
Inc. (12%), SI International Instruments Inc. (10%)
31
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE, 2000
NET LEASED 2000 2000 OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%) ($)(4)(6)
- -------------------------------------------------------------------------------------------------------------------------------
4 Skyline Drive.................. 1987 80,600 99.6 1,267 1,155 0.26 15.78
8 Skyline Drive.................. 1985 50,000 98.9 854 717 0.18 17.27
10 Skyline Drive................. 1985 20,000 100.0 283 262 0.06 14.15
11 Skyline Drive................. 1989 45,000 100.0 689 641 0.14 15.31
12 Skyline Drive................. 1999 46,850 100.0 806 646 0.17 17.20
15 Skyline Drive................. 1989 55,000 100.0 1,005 912 0.21 18.27
YONKERS
100 Corporate Boulevard.......... 1987 78,000 98.2 1,399 1,338 0.29 18.26
200 Corporate Boulevard South.... 1990 84,000 99.8 1,380 1,350 0.28 16.46
4 Executive Plaza................ 1986 80,000 98.7 1,025 973 0.21 12.98
6 Executive Plaza................ 1987 80,000 100.0 1,110 1,093 0.23 13.88
1 Odell Plaza.................... 1980 106,000 93.7 1,256 1,221 0.26 12.65
5 Odell Plaza.................... 1983 38,400 99.6 536 528 0.11 14.01
7 Odell Plaza.................... 1984 42,600 99.6 648 634 0.13 15.27
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE/FLEX 2,076,570 98.3 28,555 27,118 5.88 13.99
- -------------------------------------------------------------------------------------------------------------------------------
FAIRFIELD COUNTY, CONNECTICUT
STAMFORD
419 West Avenue.................. 1986 88,000 94.0 1,486 1,460 0.31 17.96
500 West Avenue.................. 1988 25,000 100.0 422 384 0.09 16.88
550 West Avenue.................. 1990 54,000 100.0 785 663 0.16 14.54
600 West Avenue.................. 1999 66,000 100.0 722 685 0.15 10.94
2000
AVERAGE TENANTS LEASING 10%
EFFECTIVE OR MORE OF NET
RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PROPERTY AS OF
LOCATION ($)(5)(6) 12/31/00 (6)
- -------------------------------------------------------------------------------------------------------------
4 Skyline Drive.................. 14.39 Alstom USA Inc. (27%), Evonyx Inc. (23%)
8 Skyline Drive.................. 14.50 Clientsoft Inc. (70%), Evonyx Inc. (29%)
10 Skyline Drive................. 13.10 Bi-Tronic Inc/LCA Sales Corp. (51%), Phoenix Systems Int'l
(32%), ENSR Corp. (17%)
11 Skyline Drive................. 14.24 Cube Computer Corp. (76%), Agathon Machine Tools Inc. (12%)
12 Skyline Drive................. 13.79 Creative Visual Enterprises (38%), Medelec Inc. (32%), Savin
Corporation (30%)
15 Skyline Drive................. 16.58 Tellabs Operations Inc. (47%), Emisphere Technology Assoc.
(23%), Minolta Business Solutions (16%), Acorda Therapeutics
Inc. (14%)
YONKERS
100 Corporate Boulevard.......... 17.47 Montefiore Medical Center (28%), Sempra Energy Trading Corp.
(13%), Minami International Corp. (12%), Otis Elevator
Company (11%), Genzyme Genetics Corp. (11%)
200 Corporate Boulevard South.... 16.10 Belmay Inc. (32%), Montefiore Medical Center (23%),
Advanced Viral Research Corp. (20%), Micromold Products
Inc. (10%)
4 Executive Plaza................ 12.32 Wise Contact US Optical Corp. (32%), E&B Giftware Inc.
(22%), TT Systems LLC (10%)
6 Executive Plaza................ 13.66 Cablevision Systems Corp. (40%), CSC Holdings Inc. (12%),
Yonkers Savings & Loan Assoc. (11%) , Empire Managed Care
Inc. (10%)
1 Odell Plaza.................... 12.29 Sportive Ventures 2 LLC (19%), Market Dynamics Group LLC
(11%)
5 Odell Plaza.................... 13.81 Voyetra Technologies Inc. (44%), Photo File Inc. (34%),
Pharmerica Inc. (22%)
7 Odell Plaza.................... 14.94 US Postal Service (41%), TT Systems Company (24%), Bright
Horizons Childrens Center (16%)
- -------------------------------------------------------------------------------------------------------------
TOTAL NEW YORK OFFICE/FLEX 13.28
- -------------------------------------------------------------------------------------------------------------
FAIRFIELD COUNTY, CONNECTICUT
STAMFORD
419 West Avenue.................. 17.65 Fuji Medical Systems USA Inc. (80%)
500 West Avenue.................. 15.36 Peppers and Rogers Group/Mark (35%), Lead Trackers Inc.
(28%), Convergent Communications Inc. (26%), M Cohen
and Sons Inc. (11%)
550 West Avenue.................. 12.28 Lifecodes Corp. (68%), Davidoff of Geneva (CT) Inc. (32%)
600 West Avenue.................. 10.38 Clarence House Imports, Ltd (100%)
32
PROPERTY LISTING
OFFICE/FLEX PROPERTIES
(CONTINUED)
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE, 2000
NET LEASED 2000 2000 OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%) ($)(4)(6)
- ------------------------------------------------------------------------------------------------------------------------------
650 West Avenue 1998 40,000 100.0 555 441 0.11 13.88
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE/FLEX 273,000 98.1 3,970 3,633 0.82 14.83
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTIES 4,345,651 96.4 46,861 43,847 9.65 11.25
==============================================================================================================================
2000
AVERAGE TENANTS LEASING 10%
EFFECTIVE OR MORE OF NET
RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PROPERTY AS OF
LOCATION ($)(5)(6) 12/31/00 (6)
- -----------------------------------------------------------------------------------
650 West Avenue 11.03 Davidoff of Geneva (CT) Inc. (100%)
- -----------------------------------------------------------------------------------
TOTAL CONNECTICUT OFFICE/FLEX 13.57
- -----------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTIES 10.53
===================================================================================
33
PROPERTY LISTING
INDUSTRIAL/WAREHOUSE PROPERTIES
PERCENTAGE
OF TOTAL 2000
PERCENTAGE OFFICE, 2000
NET LEASED 2000 2000 OFFICE/FLEX, AVERAGE
RENTABLE AS OF BASE EFFECTIVE AND INDUSTRIAL/ BASE RENT
PROPERTY YEAR AREA 12/31/00 RENT RENT WAREHOUSE PER SQ. FT.
LOCATION BUILT (SQ. FT.) (%)(1) ($000'S)(2)(6) ($000'S)(3)(6) BASE RENT(%) ($)(4)(6)
- ------------------------------------------------------------------------------------------------------------------------------
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
1 Warehouse Lane................. 1957 6,600 100.0 57 56 0.01 8.64
2 Warehouse Lane................. 1957 10,900 100.0 119 113 0.02 10.92
3 Warehouse Lane................. 1957 77,200 100.0 290 279 0.06 3.76
4 Warehouse Lane................. 1957 195,500 97.4 1,936 1,890 0.40 10.17
5 Warehouse Lane................. 1957 75,100 97.1 774 706 0.16 10.61
6 Warehouse Lane................. 1982 22,100 100.0 513 511 0.11 23.21
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIAL/WAREHOUSE PROPERTIES 387,400 98.1 3,689 3,555 0.76 9.70
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE, OFFICE/FLEX,
AND INDUSTRIAL/WAREHOUSE
PROPERTIES 26,649,521 96.8 484,740 465,843 100.0 19.14
==============================================================================================================================
2000
AVERAGE TENANTS LEASING 10%
EFFECTIVE OR MORE OF NET
RENT RENTABLE AREA PER
PROPERTY PER SQ. FT. PROPERTY AS OF
LOCATION ($)(5)(6) 12/31/00 (6)
- -------------------------------------------------------------------------------------------------------------
WESTCHESTER COUNTY, NEW YORK
ELMSFORD
1 Warehouse Lane................. 8.48 JP Trucking Service Center Inc. (100%)
2 Warehouse Lane................. 10.37 RJ Bruno Roofing Inc. (55%), Teleport Communications
Group (41%)
3 Warehouse Lane................. 3.61 United Parcel Service (100%)
4 Warehouse Lane................. 9.93 San Mar Laboratories Inc. (63%), Westinghouse Air
Brake Co. Inc. (14%)
5 Warehouse Lane................. 9.68 Great Spring Waters of America (48%), Chamart Exclusives
Inc. (16%), E & H Tire Buying Service Inc. (11%)
6 Warehouse Lane................. 23.12 Conway Central Express (100%)
- -------------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIAL/WAREHOUSE PROPERTIES 9.35
- -------------------------------------------------------------------------------------------------------------
TOTAL OFFICE, OFFICE/FLEX,
AND INDUSTRIAL/WAREHOUSE
PROPERTIES 18.40
=============================================================================================================
(1) Based on all leases in effect as of December 31, 2000.
(2) Total base rent for 2000, determined in accordance with generally accepted
accounting principles ("GAAP"). Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the
tenant's proportionate share of and/or increases in real estate taxes and
certain operating costs, as defined, and the pass through of charges for
electrical usage.
(3) Total base rent for 2000 minus total 2000 amortization of tenant
improvements, leasing commissions and other concessions and costs,
determined in accordance with GAAP.
(4) Base rent for 2000 divided by net rentable square feet leased at December
31, 2000. For those properties acquired or placed in service during 2000,
amounts are annualized, as per Note 7.
(5) Effective rent for 2000 divided by net rentable square feet leased at
December 31, 2000. For those properties acquired or placed in service
during 2000, amounts are annualized, as per Note 7.
(6) Excludes space leased by the Company.
(7) As this property was acquired or placed in service by the Company during
2000, the amounts represented in 2000 base rent and 2000 effective rent
reflect only that portion of the year during which the Company owned or
placed the property in service. Accordingly, these amounts may not be
indicative of the property's full year results. For comparison purposes,
the amounts represented in 2000 average base rent per sq. ft. and 2000
average effective rent per sq. ft. for this property have been calculated
by taking 2000 base rent and 2000 effective rent for such property and
annualizing these partial-year results, dividing such annualized amounts by
the net rentable square feet leased at December 31, 2000. These annualized
per square foot amounts may not be indicative of the property's results had
the Company owned or placed such property in service for the entirety of
2000.
(8) The property was sold by the Company in 2000.
(9) Calculation based on square feet in service as of December 31, 2000.
----------------------------------------------
34
RETAIL PROPERTIES
The Company owned two stand-alone retail properties as of December 31, 2000, as
described below:
The Company owns an 8,000 square foot restaurant, constructed in 1986, located
at 2 Executive Plaza in the South Westchester Executive Park in Yonkers,
Westchester County, New York. The restaurant is 100 percent leased to Magic at
Yonkers, Inc. for use as a Red Robin restaurant under a 25-year lease. The lease
currently provides for fixed annual base rent of $265,000, with fully-reimbursed
real estate taxes, and operating expenses escalated based on the consumer price
index ("CPI") over a base year CPI. The lease, which expires in June 2012,
includes scheduled rent increases in July 2002 to approximately $300,000
annually, and in July 2007 to approximately $345,000 annually. The lease also
provides for additional rent calculated as a percentage of sales over a
specified sales amount, as well as for two five-year renewal options. 2000 total
base rent for the property, calculated in accordance with GAAP, was
approximately $345,558.
The Company also owns a 9,300 square foot restaurant, constructed in 1984,
located at 230 White Plains Road, Tarrytown, Westchester County, New York. The
restaurant is 100 percent leased to TGI Friday's under a 10-year lease which
provides for fixed annual base rent of approximately $195,000, with
fully-reimbursed real estate taxes, and operating expenses escalated based on
CPI over a base year CPI. The lease, which expires in August 2004, also provides
for additional rent calculated as a percentage of sales over a specified sales
amount, as well as for four five-year renewal options. 2000 total base rent for
the property, calculated in accordance with GAAP, was approximately $186,241.
LAND LEASES
The Company owned three land parcels, which were leased as of December 31, 2000,
as described below:
The Company leases land to Star Enterprises, on which a 2,264 square-foot Texaco
gas station was constructed, located at 1 Enterprise Boulevard in Yonkers,
Westchester County, New York. The 15-year, triple-net land lease provides for
annual rent of approximately $145,000 and expires in April 2005. The lease also
provides for two five-year renewal options. 2000 total base rent under this
lease, calculated in accordance with GAAP, was approximately $143,972.
The Company also leases five acres of land to Rake Realty, on which a 103,500
square-foot office building exists, located at 700 Executive Boulevard,
Elmsford, Westchester County, New York. The 22-year, triple-net land lease
provides for fixed annual rent plus a CPI adjustment every five years, and
expires in November 2018. 2000 total base rent under this lease, calculated in
accordance with GAAP, was approximately $97,744. The lease also provides for
several renewal options which could extend the lease term for an additional 30
years.
The Company also leases 27.7 acres of land to Home Depot, on which a 134,000
square-foot retail store was constructed, located at the Company's Horizon
Center Business Park, Hamilton Township, Mercer County, New Jersey. The net
lease, which began on February 1, 1999, provides for annual rent of
approximately $298,000 through the fifth year of the lease and fixed annual rent
plus a CPI adjustment every five years for the years thereafter and expires in
January 2094. The lease also provides an option for Home Depot to purchase the
land in 2002. 2000 total base rent under this lease, calculated in accordance
with GAAP, was approximately $260,750.
MULTI-FAMILY RESIDENTIAL PROPERTIES
The Company owned two multi-family residential properties, as of December 31,
2000, as described below:
TENBY CHASE APARTMENTS, DELRAN, BURLINGTON COUNTY, NEW JERSEY: The Company's
multi-family residential property, known as the Tenby Chase Apartments, was
built in 1970. The property contains 327 units, comprised of 196 one-bedroom
units and 131 two-bedroom units, with an average size of approximately 1,235
square feet per unit. The property had an average monthly rental rate of
approximately $753 per unit during 2000 and was approximately 97.5 percent
leased as of December 31, 2000. The property had 2000 total base rent of
approximately $2.9 million, which represented approximately 0.6 percent of the
Company's 2000 total base rent. The average occupancy rate for the property in
each of 2000, 1999 and 1998 was 96.8 percent, 97.1 percent and 96.0 percent,
respectively.
35
25 MARTINE AVENUE, WHITE PLAINS, WESTCHESTER COUNTY, NEW YORK: The Company's
multi-family residential property, known as 25 Martine Avenue, was built in
1987. The property contains 124 residential units, comprised of 18 studio units,
71 one-bedroom units and 35 two-bedroom units, with an average size of
approximately 722 square feet per unit. The property had an average monthly
rental rate of approximately $1,658 per unit during 2000 and was 97.0 percent
leased as of December 31, 2000. The property also has retail space. The property
had 2000 total base rent of approximately $2.5 million, which represented
approximately 0.5 percent of the Company's 2000 total base rent. The average
occupancy rate for the property in each of 2000, 1999 and 1998 was 96.5 percent,
96.8 percent and 96.4 percent, respectively.
OCCUPANCY
The table below sets forth the year-end percentages of rentable square feet
leased in the Company's in-service Consolidated Properties for the last five
years:
Percentage of
Year ended December 31, Square Feet Leased (%)
- ----------------------------------------------------------------------------------------------------
2000 96.8
1999 96.5
1998 96.6
1997 95.8
1996 96.4
36
SIGNIFICANT TENANTS
The following table sets forth a schedule of the Company's 20 largest tenants
for the Consolidated Properties as of December 31, 2000, based upon annualized
base rents:
Percentage of
Annualized Company Square Percentage of Year of
Number of Base Rental Annualized Base Feet Total Company Lease
Properties Revenue ($) (1) Rental Revenue (%) Leased Leased Sq. Ft. (%) Expiration
- ----------------------------------------------------------------------------------------------------------------------------------
AT&T Wireless Services 2 8,527,197 1.8 395,955 1.6 2007 (2)
Donaldson, Lufkin &
Jenrette Securities Corp. 1 8,316,096 1.7 271,953 1.1 2011
Keystone Mercy Health Plan 3 7,429,219 1.6 325,843 1.3 2015 (3)
AT&T Corporation 2 7,268,746 1.5 450,278 1.8 2009 (4)
Prentice-Hall Inc. 1 6,744,495 1.4 474,801 1.9 2014
IBM Corporation 3 6,390,275 1.3 361,688 1.4 2007 (5)
Toys `R' Us - NJ, Inc. 1 5,342,672 1.1 242,518 1.0 2012
Waterhouse Securities, Inc. 1 5,253,555 1.1 184,222 0.7 2015
Nabisco Inc. 3 5,183,132 1.1 310,243 1.2 2005 (6)
American Institute of Certified
Public Accountants 1 4,981,357 1.0 249,768 1.0 2012
Allstate Insurance Company 9 4,727,383 1.0 224,321 0.9 2009 (7)
Board of Gov./Federal Reserve 1 4,705,391 1.0 117,008 0.5 2009 (8)
Winston & Strawn 1 4,381,770 0.9 108,100 0.4 2003
Dean Witter Trust Company 1 4,319,507 0.9 221,019 0.9 2008
CMP Media Inc. 1 4,206,598 0.9 206,274 0.8 2014
KPMG Peat Marwick, LLP 2 3,824,080 0.8 161,760 0.6 2007 (9)
Move.com Operations, Inc. 1 3,796,680 0.8 94,917 0.4 2006
Regus Business Centre Corp. 3 3,680,880 0.8 107,805 0.4 2011(10)
Bank of Tokyo - Mitsubishi Ltd. 1 3,378,924 0.7 137,076 0.5 2009
Bankers Trust Harborside Inc. 1 3,272,500 0.7 385,000 1.5 2003
- ----------------------------------------------------------------------------------------------------------------------------------
Totals 105,730,457 22.1 5,030,549 19.9
==================================================================================================================================
(1) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
(2) 12,150 square feet expire September 2004; 345,799 square feet expire March
2007; 38,006 square feet expire June 2007.
(3) 22,694 square feet expire January 2003; 303,149 square feet expire April
2015.
(4) 63,278 square feet expire May 2004; 387,000 square feet expire January 2009.
(5) 28,289 square feet expire January 2002; 85,000 square feet expire December
2005; 248,399 square feet expire December 2007.
(6) 9,865 square feet expire September 2001; 300,378 square feet expire December
2005.
(7) 18,882 square feet expire April 2003; 4,398 square feet expire January 2004;
36,305 square feet expire January 2005; 23,024 square feet expire October
2005; 22,444 square feet expire July 2006; 6,108 square feet expire August
2006; 70,517 square feet expire June 2007; 31,143 square feet expire April
2008; 11,500 square feet expire April 2009.
(8) 94,719 square feet expire May 2005; 22,289 square feet expire July 2009.
(9) 104,556 square feet expire September 2002; 57,204 square feet expire July
2007.
(10) 28,000 square feet expire August 2010; 38,930 square feet expire April
2011; 40,875 square feet expire August 2011.
37
SCHEDULE OF LEASE EXPIRATIONS
The following table sets forth a schedule of the lease expirations for the total
of the Company's office, office/flex, industrial/warehouse and stand-alone
retail properties, included in the Consolidated Properties, beginning January 1,
2001, assuming that none of the tenants exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) Leases ($) (3) Leases ($) Leases (%)
- ------------------------------------------------------------------------------------------------------------------------------
2001.......... 531 2,639,934 10.4 43,613,737 16.52 9.2
2002.......... 515 3,150,437 12.4 56,082,268 17.80 11.8
2003.......... 506 3,831,520 15.1 67,498,472 17.62 14.2
2004.......... 350 2,378,899 9.4 45,239,146 19.02 9.5
2005.......... 346 3,167,520 12.5 62,884,809 19.85 13.2
2006.......... 163 1,899,748 7.5 38,795,616 20.42 8.1
2007.......... 72 1,565,437 6.2 32,235,634 20.59 6.8
2008.......... 51 1,149,547 4.5 19,628,343 17.07 4.1
2009.......... 39 1,113,494 4.4 21,644,393 19.44 4.5
2010.......... 77 1,167,775 4.6 23,066,952 19.75 4.8
2011.......... 27 1,010,078 4.0 22,213,067 21.99 4.7
2012 and thereafter 40 2,301,556 9.0 43,724,798 19.00 9.1
- ------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 2,717 25,375,945 (4) 100.0 476,627,235 18.78 100.0
==============================================================================================================================
(1) Includes office, office/flex, industrial/warehouse and stand-alone retail
property tenants only. Excludes leases for amenity, retail, parking and
month-to-month tenants. Some tenants have multiple leases.
(2) Excludes all unleased space as of December 31, 2000.
(3) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
(4) Reconciliation to Company's total net rentable square footage is as
follows:
Square Feet Percentage of Total
----------- -------------------
Square footage leased to commercial tenants 25,375,945 95.2%
Square footage used for corporate offices, management offices, building use,
retail tenants, food services, other ancillary
service tenants and occupancy adjustments 426,862 1.6
Square footage unleased 864,014 3.2
----------- --------
Total net rentable square footage (does not include
residential, land lease, retail or not-in-service properties) 26,666,821 100.0%
========== ======
38
SCHEDULE OF LEASE EXPIRATIONS: OFFICE PROPERTIES
The following table sets forth a schedule of the lease expirations for the
office properties beginning January 1, 2001, assuming that none of the tenants
exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) Leases ($) (3) Leases ($) Leases (%)
- -------------------------------------------------------------------------------------------------------------------------------
2001.......... 436 1,996,939 9.6 36,827,326 18.44 8.7
2002.......... 410 2,318,146 11.1 47,490,669 20.49 11.2
2003.......... 422 3,152,850 15.2 60,794,043 19.28 14.3
2004.......... 293 1,814,213 8.7 38,785,904 21.38 9.2
2005.......... 290 2,676,685 12.9 56,812,992 21.23 13.4
2006.......... 137 1,554,837 7.5 33,508,335 21.55 7.9
2007.......... 64 1,430,006 6.9 30,260,900 21.16 7.1
2008.......... 45 964,500 4.6 18,204,342 18.87 4.3
2009.......... 26 971,232 4.7 19,654,067 20.24 4.6
2010.......... 53 855,944 4.1 18,361,508 21.45 4.3
2011.......... 24 949,167 4.6 21,495,631 22.65 5.1
2012 and thereafter 35 2,115,868 10.1 41,494,249 19.61 9.9
- -------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 2,235 20,800,387 100.0 423,689,966 20.37 100.0
===============================================================================================================================
(1) Includes office tenants only. Excludes leases for amenity, retail, parking
and month-to-month office tenants. Some tenants have multiple leases.
(2) Excludes all unleased space as of December 31, 2000.
(3) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
39
SCHEDULE OF LEASE EXPIRATIONS: OFFICE/FLEX PROPERTIES
The following table sets forth a schedule of the lease expirations for the
office/flex properties beginning January 1, 2001, assuming that none of the
tenants exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) Leases ($) (3) Leases ($) Leases (%)
- -------------------------------------------------------------------------------------------------------------------------------
2001.......... 89 632,213 15.1 6,677,238 10.56 13.7
2002.......... 103 785,851 18.8 8,090,847 10.30 16.6
2003.......... 80 580,696 13.9 6,203,311 10.68 12.7
2004.......... 46 355,266 8.5 3,957,742 11.14 8.1
2005.......... 53 477,681 11.4 5,889,941 12.33 12.1
2006.......... 26 344,911 8.3 5,287,281 15.33 10.8
2007.......... 8 135,431 3.2 1,974,734 14.58 4.0
2008.......... 6 185,047 4.4 1,424,001 7.70 2.9
2009.......... 12 130,462 3.1 1,884,126 14.44 3.9
2010.......... 24 311,831 7.5 4,705,444 15.09 9.6
2011.......... 3 60,911 1.5 717,436 11.78 1.5
2012 and thereafter 4 177,688 4.3 1,965,549 11.06 4.1
- -------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 454 4,177,988 100.0 48,777,650 11.67 100.0
===============================================================================================================================
(1) Includes office/flex tenants only. Excludes leases for amenity, retail,
parking and month-to-month office/flex tenants. Some tenants have multiple
leases.
(2) Excludes all unleased space as of December 31, 2000.
(3) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
40
SCHEDULE OF LEASE EXPIRATIONS: INDUSTRIAL/WAREHOUSE PROPERTIES
The following table sets forth a schedule of the lease expirations for the
industrial/warehouse properties beginning January 1, 2001, assuming that none of
the tenants exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) Leases ($) (3) Leases ($) Leases (%)
- --------------------------------------------------------------------------------------------------------------------------------
2001.......... 6 10,782 2.8 109,173 10.13 3.0
2002.......... 2 46,440 12.2 500,752 10.78 13.5
2003.......... 4 97,974 25.8 501,118 5.11 13.5
2004.......... 10 200,120 52.6 2,300,500 11.50 62.2
2005.......... 3 13,154 3.5 181,876 13.83 4.9
2009.......... 1 11,800 3.1 106,200 9.00 2.9
- --------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 26 380,270 100.0 3,699,619 9.73 100.0
================================================================================================================================
(1) Includes industrial/warehouse tenants only. Excludes leases for amenity,
retail, parking and month-to-month industrial/warehouse tenants. Some
tenants have multiple leases.
(2) Excludes all unleased space as of December 31, 2000.
(3) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rent revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
the historical results may differ from those set forth above.
SCHEDULE OF LEASE EXPIRATIONS: STAND-ALONE RETAIL PROPERTIES
The following table sets forth a schedule of the lease expirations for the
stand-alone retail properties beginning January 1, 2001, assuming that none of
the tenants exercise renewal options:
Average Annual
Percentage Of Rent Per Net
Net Rentable Total Leased Annualized Rentable Percentage Of
Area Subject Square Feet Base Rental Square Foot Annual Base
Number Of To Expiring Represented By Revenue Under Represented Rent Under
Year Of Leases Leases Expiring Expiring By Expiring Expiring
Expiration Expiring (1) (Sq. Ft.) Leases (%) (2) Leases ($) Leases ($) Leases (%)
- --------------------------------------------------------------------------------------------------------------------------------
2004.......... 1 9,300 53.8 195,000 20.97 42.4
2012 ......... 1 8,000 46.2 265,000 33.12 57.6
- --------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted
Average 2 17,300 100.0 460,000 26.59 100.0
================================================================================================================================
(1) Includes stand-alone retail property tenants only.
(2) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
41
INDUSTRY DIVERSIFICATION
The following table lists the Company's 30 largest industry classifications
based on annualized contractual base rent of the Consolidated Properties:
Annualized Percentage of Percentage of
Base Rental Company Square Total Company
Revenue Annualized Base Feet Leased
Industry Classification (3) ($) (1) (2) Rental Revenue (%) Leased Sq. Ft. (%)
- ---------------------------------------------------------------------------------------------------------------------------------
Securities, Commodity Contracts & Other Financial 54,293,717 11.4 2,333,149 9.2
Manufacturing 45,232,970 9.5 2,733,304 10.8
Computer System Design Svcs. 33,965,877 7.1 1,799,904 7.1
Telecommunications 32,056,149 6.7 1,863,008 7.3
Insurance Carriers & Related Activities 31,246,470 6.6 1,607,184 6.3
Legal Services 28,655,988 6.0 1,280,166 5.0
Health Care & Social Assistance 21,199,594 4.5 1,079,556 4.3
Credit Intermediation & Related Activities 19,966,062 4.2 1,173,198 4.6
Wholesale Trade 17,090,086 3.6 1,254,193 4.9
Accounting/Tax Prep. 16,191,496 3.4 762,021 3.0
Other Professional 15,709,854 3.3 897,542 3.5
Retail Trade 15,304,387 3.2 877,279 3.5
Information Services 13,485,944 2.8 637,787 2.5
Publishing Industries 12,780,221 2.7 560,880 2.2
Arts, Entertainment & Recreation 10,873,673 2.3 742,323 2.9
Real Estate & Rental & Leasing 10,441,206 2.2 481,484 1.9
Public Administration 10,196,985 2.1 353,072 1.4
Other Services (except Public Administration) 9,973,705 2.1 720,267 2.8
Advertising/Related Services 9,059,880 1.9 422,451 1.7
Scientific Research/Development 9,004,156 1.9 516,192 2.0
Management/Scientific 7,713,798 1.6 394,625 1.6
Management of Companies & Finance 6,846,791 1.4 351,868 1.4
Transportation 6,534,616 1.4 449,769 1.8
Data Processing Services 5,774,618 1.2 268,770 1.1
Architectural/Engineering 5,268,844 1.1 302,525 1.2
Construction 4,481,491 0.9 252,042 1.0
Educational Services 3,885,332 0.8 214,446 0.9
Utilities 3,621,901 0.8 177,871 0.7
Admin. & Support, Waste Mgt. & Remediation Svc. 3,556,598 0.8 239,164 0.9
Specialized Design Services 3,488,148 0.7 164,620 0.7
Other 8,726,678 1.8 465,285 1.8
- ------------------------------------------------------------------------------------------------------------------------------
Totals 476,627,235 100.0 25,375,945 100.0
==============================================================================================================================
(1) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
(2) Includes office, office/flex, industrial/warehouse and stand-alone retail
tenants only. Excludes leases for amenity, retail, parking and
month-to-month office tenants. Some tenants have multiple leases.
(3) The Company's tenants are classified according to the U.S. Government's new
North American Industrial Classification System (NAICS) which has replaced
the Standard Industrial Code (SIC) system.
42
MARKET DIVERSIFICATION
The following table lists the Company's 25 markets (MSAs), based on annualized
contractual base rent of the Consolidated Properties:
Annualized Percentage of
Base Rental Company Total
Revenue Annualized Base Property Size Percentage of
Market (MSA) ($) (1) (2) Rental Revenue (%) Rentable Area Rentable Area (%)
- -----------------------------------------------------------------------------------------------------------------------------------
Bergen-Passaic, NJ 82,717,384 17.4 4,530,091 17.0
New York, NY (Westchester-Rockland Counties) 80,086,544 16.8 4,696,178 17.6
Newark, NJ (Essex-Morris-Union Counties) 71,596,650 15.0 3,444,598 12.9
Jersey City, NJ 42,609,281 8.9 2,094,470 7.8
Philadelphia, PA-NJ 37,954,991 8.0 2,710,346 10.2
Washington, DC-MD-VA 19,253,047 4.0 616,549 2.3
Denver, CO 17,302,628 3.6 1,007,931 3.8
Dallas, TX 15,516,855 3.3 959,463 3.6
Middlesex-Somerset-Hunterdon, NJ 15,343,278 3.2 791,051 3.0
Trenton, NJ (Mercer County) 13,423,461 2.8 672,365 2.5
San Francisco, CA 12,594,371 2.6 450,891 1.7
San Antonio, TX 12,018,130 2.5 940,302 3.5
Stamford-Norwalk, CT 9,369,016 2.0 527,250 2.0
Houston, TX 8,888,789 1.9 700,008 2.6
Monmouth-Ocean, NJ 7,375,329 1.5 577,423 2.2
Nassau-Suffolk, NY 5,762,698 1.2 261,849 1.0
Phoenix-Mesa, AZ 5,535,201 1.2 416,967 1.6
Tampa-St. Petersburg-Clearwater, FL 3,869,760 0.8 297,429 1.1
Boulder-Longmont, CO 3,600,741 0.8 270,421 1.0
Bridgeport, CT 3,230,808 0.7 145,487 0.5
Colorado Springs, CO 2,832,002 0.6 209,987 0.8
Dutchess County, NY 2,201,156 0.5 118,727 0.4
Atlantic-Cape May, NJ 1,339,776 0.3 80,344 0.3
Des Moines, IA 1,163,019 0.2 72,265 0.3
Fort Worth-Arlington, TX 1,042,320 0.2 74,429 0.3
- ------------------------------------------------------------------------------------------------------------------------------
Totals 476,627,235 100.0 26,666,821 100.0
==============================================================================================================================
(1) Annualized base rental revenue is based on actual December 2000 billings
times 12. For leases whose rent commences after January 1, 2001, annualized
base rental revenue is based on the first full month's billing times 12. As
annualized base rental revenue is not derived from historical GAAP results,
historical results may differ from those set forth above.
(2) Includes office, office/flex, industrial/warehouse and stand-alone retail
tenants only. Excludes leases for amenity, retail, parking and
month-to-month office tenants. Some tenants have multiple leases.
43
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary routine
litigation incidental to its business, to which the Company is a party or to
which any of the Properties is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
44
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The shares of the Company's Common Stock are traded on the New York Stock
Exchange ("NYSE") and the Pacific Exchange under the symbol "CLI".
MARKET INFORMATION
The following table sets forth the quarterly high, low, and closing price per
share of Common Stock reported on the NYSE for the years ended December 31, 2000
and 1999, respectively:
For the Year Ended December 31, 2000:
HIGH LOW CLOSE
---- --- -----
First Quarter $26.6250 $22.7500 $25.5000
Second Quarter $28.4375 $24.4375 $25.6875
Third Quarter $28.6250 $25.0625 $28.1875
Fourth Quarter $28.8750 $25.7500 $28.5625
For the Year Ended December 31, 1999:
HIGH LOW CLOSE
---- --- -----
First Quarter $31.8750 $27.0000 $29.3750
Second Quarter $33.6250 $27.1875 $30.9375
Third Quarter $30.8125 $25.7500 $26.8215
Fourth Quarter $26.8125 $23.1250 $26.0625
On February 15, 2001, the closing Common Stock sales price on the NYSE was
$27.35 per share.
HOLDERS
On February 15, 2001, the Company had 426 common shareholders of record.
RECENT SALES OF UNREGISTERED SECURITIES
The Company did not issue any unregistered securities in the year ended December
31, 2000.
DIVIDENDS AND DISTRIBUTIONS
During the year ended December 31, 2000, the Company declared four quarterly
common stock dividends and common unit distributions in the amounts of $0.58,
$0.58, $0.61 and $0.61 per share and common unit from the first to the fourth
quarter, respectively.
During the year ended December 31, 1999, the Company declared four quarterly
common stock dividends and common unit distributions in the amounts of $0.55,
$0.55, $0.58 and $0.58 per share and common unit from the first to the fourth
quarter, respectively.
The declaration and payment of dividends and distributions will continue to be
determined by the Board of Directors in light of conditions then existing,
including the Company's earnings, financial condition, capital requirements,
applicable legal restrictions and other factors.
45
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial data on a consolidated basis
for the Company. The consolidated selected operating, balance sheet and cash
flow data of the Company as of December 31, 2000, 1999, 1998, 1997 and 1996, and
for the periods then ended have been derived from financial statements audited
by PricewaterhouseCoopers LLP, independent accountants.
OPERATING DATA Year Ended December 31,
IN THOUSANDS, EXCEPT PER SHARE DATA 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 576,153 $ 551,484 $ 493,699 $ 249,801 $ 95,472
Operating and other expenses $ 172,146 $ 168,651 $ 150,448 $ 75,353 $ 29,662
General and administrative $ 23,276 $ 25,480 $ 24,828 $ 15,659 $ 5,800
Depreciation and amortization $ 92,088 $ 87,209 $ 78,916 $ 36,825 $ 14,731
Interest expense $ 105,394 $ 102,960 $ 88,043 $ 39,078 $ 13,758
Non-recurring charges $ 37,139 $ 16,458 $ -- $ 46,519 --
Income before minority interests and
extraordinary item $ 231,463 $ 152,683 $ 151,464 $ 36,367 $ 37,179
Income before extraordinary item $ 185,338 $ 119,739 $ 118,951 $ 4,988 $ 32,419
Basic earnings per share - before extraordinary item $ 3.18 $ 2.05 $ 2.13 $ 0.13 $ 1.76
Diluted earnings per share - before extraordinary item $ 3.10 $ 2.04 $ 2.11 $ 0.12 $ 1.73
Dividends declared per common share $ 2.38 $ 2.26 $ 2.10 $ 1.90 $ 1.75
Basic weighted average shares outstanding 58,338 58,385 55,840 39,266 18,461
Diluted weighted average shares outstanding 73,070 67,133 63,893 44,156 21,436
BALANCE SHEET DATA December 31,
IN THOUSANDS 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------
Rental property, before accumulated depreciation
and amortization $ 3,704,354 $ 3,654,845 $ 3,467,799 $ 2,629,616 $ 853,352
Total assets $ 3,676,977 $ 3,629,601 $ 3,452,194 $ 2,593,444 $ 1,026,328
Total debt $ 1,628,512 $ 1,490,175 $ 1,420,931 $ 972,650 $ 268,010
Total liabilities $ 1,774,239 $ 1,648,844 $ 1,526,974 $ 1,056,759 $ 297,985
Minority interests $ 449,448 $ 538,875 $ 501,313 $ 379,245 $ 26,964
Stockholders' equity $ 1,453,290 $ 1,441,882 $ 1,423,907 $ 1,157,440 $ 701,379
OTHER DATA Year Ended December 31,
IN THOUSANDS 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------
Cash flows provided by operating activities $ 180,529 $ 243,638 $ 208,761 $ 98,142 $ 46,823
Cash flows provided by (used in) investing activities $ 6,189 $ (195,178) $ (749,067) $(939,501) $ (307,752)
Cash flows (used in) provided by financing activities $ (182,210) $ (45,598) $ 543,411 $ 639,256 $ 464,769
Funds from operations (1), before distributions to
preferred unitholders $ 262,071 $ 244,240 $ 216,949 $ 111,752 $ 45,220
Funds from operations (1), after distributions to
preferred unitholders $ 246,630 $ 228,764 $ 200,636 $ 110,864 $ 45,220
- ------------------------
(1) The Company considers funds from operations (after adjustment for
straight-lining of rents and non-recurring charges) one measure of REIT
performance. Funds from operations ("FFO") is defined as net income
(loss) before minority interest of unitholders (preferred and common)
computed in accordance with generally accepted accounting principles
("GAAP"), excluding gains (or losses) from debt restructuring, other
extraordinary items, and sales of depreciable rental property, plus
real estate-related depreciation and amortization. Funds from
operations should not be considered as an alternative for net income as
an indication of the Company's performance or to cash flows as a
measure of liquidity. Funds from operations presented herein is not
necessarily comparable to funds from operations presented by other real
estate companies due to the fact that not all real estate companies use
the same definition. However, the Company's funds from operations is
comparable to the funds from operations of real estate companies that
use the current definition of the National Association of Real Estate
Investment Trusts ("NAREIT"), after the adjustment for straight-lining
of rents and non-recurring charges. Refer to "Management's Discussion
and Analysis of Financial Condition and Results of Operations,"
contained elsewhere in this Report, for the calculation of FFO for the
periods presented.
46
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated
Financial Statements of Mack-Cali Realty Corporation and the notes thereto.
Certain defined terms used herein have the meaning ascribed to them in the
Consolidated Financial Statements.
The following comparisons for the year ended December 31, 2000 ("2000"), as
compared to the year ended December 31, 1999 ("1999"), and for 1999, as compared
to the year ended December 31, 1998 ("1998"), make reference to the following:
(i) the effect of the "Same-Store Properties," which represents all in-service
properties owned by the Company at December 31, 1998, excluding Dispositions as
defined below (for the 2000 versus 1999 comparison) and which represents all
in-service properties owned by the Company at December 31, 1997, excluding
Dispositions as defined below (for the 1999 versus 1998 comparison), (ii) the
effect of the "Acquired Properties," which represents all properties acquired or
placed in service by the Company from January 1, 1999 through December 31, 2000
(for the 2000 versus 1999 comparison) and which represents all properties
acquired or placed in service by the Company from January 1, 1998 through
December 31, 1999 (for the 1999 versus 1998 comparison) and (iii) the effect of
the "Dispositions", which represents results for each period for those rental
properties sold by the Company during the respective periods.
YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999
Year Ended
December 31,
Dollar Percent
(DOLLARS IN THOUSANDS) 2000 1999 Change Change
- ----------------------------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $491,193 $469,853 $21,340 4.5%
Escalations and recoveries from tenants 58,488 62,182 (3,694) (5.9)
Parking and other 15,325 15,915 (590) (3.7)
- ----------------------------------------------------------------------------------------------------------------------
Sub-total 565,006 547,950 17,056 3.1
Equity in earnings of unconsolidated joint ventures 8,055 2,593 5,462 210.6
Interest income 3,092 941 2,151 228.6
- ----------------------------------------------------------------------------------------------------------------------
Total revenues 576,153 551,484 24,669 4.5
- ----------------------------------------------------------------------------------------------------------------------
PROPERTY EXPENSES:
Real estate taxes 59,400 57,382 2,018 3.5
Utilities 42,035 41,580 455 1.1
Operating services 70,711 69,689 1,022 1.5
- ----------------------------------------------------------------------------------------------------------------------
Sub-total 172,146 168,651 3,495 2.1
General and administrative 23,276 25,480 (2,204) (8.6)
Depreciation and amortization 92,088 87,209 4,879 5.6
Interest expense 105,394 102,960 2,434 2.4
Non-recurring charges 37,139 16,458 20,681 125.7
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 430,043 400,758 29,285 7.3
- ----------------------------------------------------------------------------------------------------------------------
Income before gain on sales of rental property
and minority interests 146,110 150,726 (4,616) (3.1)
Gain on sales of rental property 85,353 1,957 83,396 4,261.4
- ----------------------------------------------------------------------------------------------------------------------
Income before minority interests 231,463 152,683 78,780 51.6
MINORITY INTERESTS:
Operating partnership 41,053 32,865 8,188 24.9
Partially-owned properties 5,072 79 4,993 6,320.3
- ----------------------------------------------------------------------------------------------------------------------
Net income $185,338 $119,739 $65,599 54.8%
======================================================================================================================
47
The following is a summary of the changes in revenue from rental operations and
property expenses divided into Same-Store Properties, Acquired Properties and
Dispositions (dollars in thousands):
TOTAL COMPANY SAME-STORE PROPERTIES ACQUIRED PROPERTIES DISPOSITIONS
------------- --------------------- ------------------- ------------
Dollar Percent Dollar Percent Dollar Percent Dollar Percent
Change Change Change Change Change Change Change Change
- --------------------------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $21,340 4.5% $16,615 3.5% $21,429 4.6% $(16,704) (3.6)%
Escalations and recoveries from
from tenants (3,694) (5.9) (577) (0.9) 1,602 2.6 (4,719) (7.6)
Parking and other (590) (3.7) (111) (0.7) 150 0.9 (629) (3.9)
- --------------------------------------------------------------------------------------------------------------------
Total $17,056 3.1% $15,927 2.9% $23,181 4.2% $(22,052) (4.0)%
====================================================================================================================
PROPERTY EXPENSES:
Real estate taxes $ 2,018 3.5% $ 1,267 2.2% $ 2,287 4.0% $ (1,536) (2.7)%
Utilities 455 1.1 752 1.8 1,501 3.6 (1,798) (4.3)
Operating services 1,022 1.5 664 1.0 3,359 4.8 (3,001) (4.3)
- --------------------------------------------------------------------------------------------------------------------
Total $ 3,495 2.1% $ 2,683 1.6% $ 7,147 4.2% $ (6,335) (3.7)%
====================================================================================================================
OTHER DATA:
Number of Consolidated Properties 255 237 18 7
Square feet (in thousands) 26,667 24,886 1,781 1,949
Base rents for the Same-Store Properties increased $16.6 million, or 3.5
percent, for 2000 as compared to 1999, due primarily to rental rate increases in
2000. Escalations and recoveries from tenants for the Same-Store Properties
decreased $0.6 million, or 0.9 percent, for 2000 over 1999, due to the recovery
of a decreased amount of total property expenses. Parking and other income for
the Same-Store Properties decreased $0.1 million, or 0.7 percent, due primarily
to fewer lease termination fees in 2000.
Real estate taxes on the Same-Store Properties increased $1.3 million, or 2.2
percent, for 2000 as compared to 1999, due primarily to property tax rate
increases in certain municipalities in 2000. Utilities for the Same-Store
Properties increased $0.8 million, or 1.8 percent, for 2000 as compared to 1999,
due primarily to increased rates. Operating services for the Same-Store
Properties increased $0.7 million, or 1.0 percent, due primarily to an increase
in maintenance costs in 2000.
Equity in earnings of unconsolidated joint ventures increased $5.5 million, or
210.6 percent, for 2000 as compared to 1999. This is due primarily to properties
developed by joint ventures being placed in service in 2000 and higher
occupancies (see Note 4 to the Financial Statements).
Interest income increased $2.2 million, or 228.6 percent, for 2000 as compared
to 1999. This increase was due primarily to the effect of net proceeds from
certain property sales being invested in cash and cash equivalents for the
period of time prior to which such proceeds were reinvested, as well as income
from mortgages receivable in 2000.
General and administrative decreased by $2.2 million, or 8.6 percent, for 2000
as compared to 1999. This decrease is due primarily to decreased payroll and
related costs in 2000.
Depreciation and amortization increased by $4.9 million, or 5.6 percent, for
2000 over 1999. Of this increase, $5.4 million, or 6.2 percent, is attributable
to the Same-Store Properties, and $3.8 million, or 4.4 percent, is due to the
Acquired Properties, partially offset by a decrease of $4.3 million, or 5.0
percent, due to the Dispositions.
Interest expense increased $2.4 million, or 2.4 percent, for 2000 as compared to
1999. This increase is due primarily to the replacement in March 1999 of
short-term credit facility borrowings with long-term fixed rate unsecured notes
and increase in LIBOR in 2000 over 1999.
48
Non-recurring charges of $37.1 million were incurred in 2000 as a result of
costs associated with the termination of the Prentiss merger agreement (see Note
3 to the Financial Statements) in September 2000 and costs associated with the
resignations of Brant Cali and John R. Cali (see Note 14 to the Financial
Statements) in June 2000. Non-recurring charges of $16.5 million were incurred
in 1999 as a result of the resignation of Thomas A. Rizk (see Note 14 to the
Financial Statements).
Income before gain on sales of rental property and minority interests decreased
to $146.1 million in 2000 from $150.7 million in 1999. The decrease of
approximately $4.6 million is due to the factors discussed above.
Net income increased by $65.6 million, from $119.7 million in 1999 to $185.3
million in 2000. This increase was a result of a gain on sales of rental
property of $85.4 million in 2000. This was partially offset by a decrease in
income before gain on sales of rental property and minority interests of $4.6
million in 2000 as compared to 1999, a gain on sales of rental property of $2.0
million in 1999, and an increase in minority interests of $13.2 million in 2000.
YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998
Year Ended
December 31,
Dollar Percent
(DOLLARS IN THOUSANDS) 1999 1998 Change Change
- ----------------------------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $469,853 $427,528 $42,325 9.9%
Escalations and recoveries from tenants 62,182 51,981 10,201 19.6
Parking and other 15,915 10,712 5,203 48.6
- ----------------------------------------------------------------------------------------------------------------------
Sub-total 547,950 490,221 57,729 11.8
Equity in earnings of unconsolidated joint ventures 2,593 1,055 1,538 145.8
Interest income 941 2,423 (1,482) (61.2)
- ----------------------------------------------------------------------------------------------------------------------
Total revenues 551,484 493,699 57,785 11.7
- ----------------------------------------------------------------------------------------------------------------------
PROPERTY EXPENSES:
Real estate taxes 57,382 48,297 9,085 18.8
Utilities 41,580 38,440 3,140 8.2
Operating services 69,689 63,711 5,978 9.4
- ----------------------------------------------------------------------------------------------------------------------
Sub-total 168,651 150,448 18,203 12.1
General and administrative 25,480 24,828 652 2.6
Depreciation and amortization 87,209 78,916 8,293 10.5
Interest expense 102,960 88,043 14,917 16.9
Non-recurring charges 16,458 -- 16,458 --
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 400,758 342,235 58,523 17.1
- ----------------------------------------------------------------------------------------------------------------------
Income before gain on sales of rental property,
Minority interests and extraordinary item 150,726 151,464 (738) (0.5)
Gain on sales of rental property 1,957 -- 1,957 --
- ----------------------------------------------------------------------------------------------------------------------
Income before minority interests and
Extraordinary item 152,683 151,464 1,219 0.8
MINORITY INTERESTS:
Operating partnership 32,865 32,513 352 1.1
Partially-owned properties 79 -- 79 --
- ----------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 119,739 118,951 788 0.7
Extraordinary item - loss on early retirement of debt
(net of minority interest's share of $297 in 1998) -- (2,373) 2,373 (100.0)
- ----------------------------------------------------------------------------------------------------------------------
Net income $119,739 $116,578 $ 3,161 2.7%
======================================================================================================================
49
The following is a summary of changes in revenue from rental operations and
property expenses divided into Same-Store Properties, Acquired Properties and
Dispositions (dollars in thousands):
TOTAL COMPANY SAME-STORE PROPERTIES ACQUIRED PROPERTIES DISPOSITIONS
------------- --------------------- ------------------- ------------
Dollar Percent Dollar Percent Dollar Percent Dollar Percent
Change Change Change Change Change Change Change Change
- --------------------------------------------------------------------------------------------------------------------
REVENUE FROM RENTAL OPERATIONS:
Base rents $42,325 9.9% $10,007 2.4% $32,519 7.6% $(201) (0.1)%
Escalations and recoveries from
from tenants 10,201 19.6 4,800 9.2 5,404 10.4 (3) 0.0
Parking and other 5,203 48.6 2,585 24.1 2,601 24.3 17 0.2
- --------------------------------------------------------------------------------------------------------------------
Total $57,729 11.8% $17,392 3.6% $40,524 8.3% $(187) (0.1)%
====================================================================================================================
PROPERTY EXPENSES:
Real estate taxes $ 9,085 18.8% $ 3,300 6.8% $ 5,817 12.1% $ (32) (0.1)%
Utilities 3,140 8.2 400 1.0 2,738 7.2 2 0.0
Operating services 5,978 9.4 (165) (0.3) 6,210 9.8 (67) (0.1)
- --------------------------------------------------------------------------------------------------------------------
Total $18,203 12.1% $ 3,535 2.4% $14,765 9.8% $ (97) (0.1)%
====================================================================================================================
OTHER DATA:
Number of Consolidated Properties 253 187 66 2
Square feet (in thousands) 27,383 21,775 5,608 190
Base rents for the Same-Store Properties increased $10.0 million, or 2.4
percent, for 1999 as compared to 1998, due primarily to rental rate increases in
1999. Escalations and recoveries from tenants for the Same-Store Properties
increased $4.8 million, or 9.2 percent, for 1999 over 1998, due to the recovery
of an increased amount of total property expenses, as well as additional
settle-up billings in 1999. Parking and other income for the Same-Store
Properties increased $2.6 million, or 24.1 percent, due primarily to increased
lease termination fees in 1999.
Real estate taxes on the Same-Store Properties increased $3.3 million, or 6.8
percent, for 1999 as compared to 1998, due primarily to property tax rate
increases in certain municipalities in 1999. Utilities for the Company increased
$3.1 million, or 8.2 percent, for 1999 as compared to 1998, due substantially to
the Acquired Properties. Operating services for the Same-Store Properties
decreased $0.2 million, or 0.3 percent, due primarily to a reduction in
maintenance costs incurred.
Equity in earnings of unconsolidated joint ventures increased $1.5 million in
1999 as compared to 1998. This is due primarily to additional joint venture
investments made by the Company (see Note 4 to the Financial Statements).
Interest income decreased $1.5 million, or 61.2 percent, for 1999 as compared to
1998. This decrease was due primarily to repayment by a borrower of a mortgage
note receivable in 1998.
General and administrative increased by $0.7 million, or 2.6 percent, for 1999
as compared to 1998. This increase is due primarily to increased payroll and
related costs in 1999.
Depreciation and amortization increased by $8.3 million, or 10.5 percent, for
1999 over 1998. Of this increase, $4.8 million, or 6.1 percent, is attributable
to the Acquired Properties and $3.5 million, or 4.4 percent, is due to the
Same-Store Properties.
Interest expense increased $14.9 million, or 16.9 percent, for 1999 as compared
to 1998. This increase is due primarily to the replacement in 1999 of short-term
credit facility borrowings with long-term fixed rate unsecured debt and net
additional drawings from the Company's revolving credit facilities generally as
a result of Company acquisitions in 1998. These increases were partially offset
by the reduction in spread over LIBOR due to the Unsecured Facility signed in
April 1998 and the achievement by the Company of investment grade credit ratings
in November 1998.
Non-recurring charges of $16.5 million were incurred in 1999, as a result of the
resignation of Thomas A. Rizk (see Note 14 to the Financial Statements).
50
Income before gain on sales of rental property, minority interests and
extraordinary item decreased to $150.7 million in 1999 from $151.5 million in
1998. The decrease of approximately $0.8 million is due to the factors discussed
above.
Net income increased by $3.1 million, from $116.6 million in 1998 to $119.7
million in 1999. This increase was a result of an extraordinary item of $2.4
million (net of minority interest) due to early retirement of debt in 1998, and
a gain on sales of rental property of $1.9 million in 1999. These were partially
offset by a decrease in income before gain on sales of rental property, minority
interests and extraordinary item of $0.8 million in 2000 as compared to 1999 and
an increase in minority interests of $0.4 million.
LIQUIDITY AND CAPITAL RESOURCES
STATEMENT OF CASH FLOWS
During the year ended December 31, 2000, the Company generated $180.5 million in
cash flows from operating activities, and together with $723.0 million in
borrowings from the Company's senior unsecured notes and revolving credit
facilities, $292.9 million in proceeds from sales of rental property, $13.3
million in distributions received from unconsolidated joint ventures, $2.5
million in proceeds from stock options exercised and $0.5 million from
restricted cash, used an aggregate of approximately $1.2 billion to acquire
properties and land parcels and pay for other tenant and building improvements
totaling $268.2 million, repay outstanding borrowings on its revolving credit
facilities and other mortgage debt of $585.0 million, pay quarterly dividends
and distributions of $172.1 million, invest $17.6 million in unconsolidated
joint ventures, distribute $88.7 million to minority interest in partially-owned
properties, issue mortgage note receivables of $14.7 million, pay financing
costs of $6.4 million, repurchase 2,026,300 shares of its outstanding common
stock for $55.5 million and increase the Company's cash and cash equivalents by
$4.5 million.
CAPITALIZATION
The Company has a focused strategy geared to attractive opportunities in
high-barrier-to-entry markets, primarily predicated on the Company's strong
presence in the Northeast region and, to a lesser extent, certain markets in
California. The Company plans to sell substantially all of its properties
located in the Southwestern and Western regions, using such proceeds to
invest in property acquisitions and development projects in its core
Northeast markets, as well as to repay debt and fund stock repurchases.
During 2000, the Company sold three of its office properties located in the
Southwest and Western regions for aggregate net proceeds of approximately $57.8
million (see Note 3 - "2000 Transactions - Property Sales" to the financial
statements.) Currently, the Company is actively seeking to sell 10 office
properties located in San Antonio and Houston, Texas.
Consistent with its strategy, in the fourth quarter 2000, the Company started
construction of a 980,000 square-foot office property, to be known as Plaza 5,
at its Harborside Financial Center office complex in Jersey City, Hudson County,
New Jersey. The total cost of the project is currently projected to be
approximately $260 million and is anticipated to be completed in third quarter
2002. Additionally, in the fourth quarter 2000, the Company, through a joint
venture, started construction of a 575,000 square-foot office property, to be
known as Plaza 10, on land owned by the joint venture located adjacent to the
Company's Harborside complex. The total cost of this project is currently
projected to be approximately $140 million and is anticipated to be completed
in third quarter 2002. Plaza 10 is 100 percent pre-leased to Charles Schwab
for a 15-year term. The lease agreement obligates the Company, among other
things, to deliver space to the tenant by required timelines and offers
expansion options, at the tenant's election, to additional space in any
adjacent Harborside projects. Such options may obligate the Company to
construct an additional building at Harborside if vacant space is not
available in any of its existing Harborside properties. Should the Company be
unable to or choose not to provide such expansion space, the Company could be
liable to Schwab for its actual damages, in no event to exceed $15.0 million.
The Company expects to finance its funding requirements under both Plazas 5
and 10 projects through drawing on its revolving credit facilities,
construction financing, or through joint venture arrangements.
51
On August 6, 1998, the Board of Directors of the Company authorized a Repurchase
Program under which the Company was permitted to purchase up to $100.0 million
of the Company's outstanding common stock. Under the Repurchase Program, the
Company purchased for constructive retirement 1,869,200 shares of its
outstanding common stock for an aggregate cost of approximately $52.6 million
through September 12, 2000.
On September 13, 2000, the Board of Directors authorized an increase to the
Repurchase Program under which the Company is permitted to purchase up to an
additional $150.0 million of the Company's outstanding common stock above the
$52.6 million that had previously been purchased. From that date through
February 15, 2001, the Company purchased for constructive retirement 2,098,300
shares of its outstanding common stock for an aggregate cost of approximately
$57.5 million under the Repurchase Program. The Company has authorization to
repurchase up to an additional $92.5 million of its outstanding common stock
which it may repurchase from time to time in open market transactions at
prevailing prices or through privately negotiated transactions.
As of December 31, 2000, the Company's total indebtedness of $1.6 billion
(weighted average interest rate of 7.29 percent) was comprised of $381.0 million
of revolving credit facility borrowings and other variable rate mortgage debt
(weighted average rate of 7.53 percent) and fixed rate debt of $1.2 billion
(weighted average rate of 7.25 percent).
As of December 31, 2000, the Company had outstanding borrowings of $348.8
million under its revolving credit facilities (with aggregate borrowing capacity
of $900.0 million). The total outstanding borrowings were from the 2000
Unsecured Facility, with no outstanding borrowings under the Prudential
Facility. The interest rate on outstanding borrowings under the 2000 Unsecured
Facility is currently LIBOR plus 80 basis points. The Company may instead elect
an interest rate representing the higher of the lender's prime rate or the
Federal Funds rate plus 50 basis points. The 2000 Unsecured Facility also
requires a 20 basis point facility fee on the current borrowing capacity payable
quarterly in arrears. In the event of a change in the Company's unsecured debt
rating, the interest and facility fee rate will be changed on a sliding scale.
Subject to certain conditions, the Company has the ability to increase the
borrowing capacity of the 2000 Unsecured Facility up to $1.0 billion. The 2000
Unsecured Facility matures in June 2003, with an extension option of one year,
which would require a payment of 25 basis points of the then borrowing capacity
of the credit line upon exercise. The Company has been notified that the
Prudential Facility, which carries an interest rate of 110 basis points over
LIBOR and matures in June 2001, will not be renewed. The Company believes that
the 2000 Unsecured Facility is sufficient to meet its revolving credit facility
needs.
The terms of the 2000 Unsecured Facility include certain restrictions and
covenants which limit, among other things, the payment of dividends (as
discussed below), the incurrence of additional indebtedness, the incurrence of
liens and the disposition of assets, and which require compliance with financial
ratios relating to the maximum leverage ratio, the maximum amount of secured
indebtedness, the minimum amount of tangible net worth, the minimum amount of
debt service coverage, the minimum amount of fixed charge coverage, the maximum
amount of unsecured indebtedness, the minimum amount of unencumbered property
debt service coverage and certain investment limitations. The dividend
restriction referred to above provides that, except to enable the Company to
continue to qualify as a REIT under the Code, the Company will not during any
four consecutive fiscal quarters make distributions with respect to common stock
or other equity interests in an aggregate amount in excess of 90 percent of
funds from operations (as defined) for such period, subject to certain other
adjustments.
On December 21, 2000, the Operating Partnership issued $15.0 million of 7.835
percent senior unsecured notes due December 15, 2010 with interest payable
semi-annually in arrears. The total proceeds from the issuance (net of selling
commissions) of approximately $14.9 million were used primarily to pay down
outstanding borrowings under the Prudential Facility, as defined in Note 9 to
the Financial Statements.
In January 2001, the Operating Partnership issued $300.0 million face amount of
7.75 percent senior unsecured notes due February 15, 2011 with interest payable
semi-annually in arrears. The total proceeds from the issuance (net of selling
commissions and discount) of approximately $296.3 million were used to pay down
outstanding borrowings under the 2000 Unsecured Facility, as defined in Note 9
to the Financial Statements. The senior unsecured notes were issued at a
discount of approximately $1.7 million.
The terms of the Operating Partnership's unsecured corporate debt include
certain restrictions and covenants which require compliance with financial
ratios relating to the maximum amount of debt leverage, the maximum amount of
secured indebtedness, the minimum amount of debt service coverage and the
maximum amount of unsecured debt as a percent of unsecured assets.
52
The Company has three investment grade credit ratings. Standard & Poor's Rating
Services ("S&P") and Fitch, Inc. ("Fitch") have each assigned their BBB rating
to existing and prospective senior unsecured debt of the Operating Partnership.
S&P and Fitch have also assigned their BBB- rating to prospective preferred
stock offerings of the Company. Moody's Investors Service has assigned its Baa3
rating to the existing and prospective senior unsecured debt of the Operating
Partnership and its Ba1 rating to prospective preferred stock offerings of the
Company.
As of December 31, 2000, the Company had 229 unencumbered properties, totaling
20.4 million square feet, representing 76.5 percent of the Company's total
portfolio on a square footage basis.
The Company has an effective shelf registration statement with the SEC for an
aggregate amount of $2.0 billion in equity securities of the Company. The
Company and Operating Partnership also have an effective shelf registration
statement with the SEC for an aggregate of $2.0 billion in debt securities,
preferred stock and preferred stock represented by depositary shares, under
which the Operating Partnership has issued an aggregate of $1.1 billion of
unsecured corporate debt. The Company also has an effective registration
statement with the SEC for a dividend reinvestment and stock purchase plan,
which commenced in March 1999.
Historically, rental revenue has been the principal source of funds to pay
operating expenses, debt service and capital expenditures, excluding
non-recurring capital expenditures. Management believes that the Company will
have access to the capital resources necessary to expand and develop its
business. To the extent that the Company's cash flow from operating activities
is insufficient to finance its non-recurring capital expenditures such as
property acquisition and construction project costs and other capital
expenditures, the Company expects to finance such activities through borrowings
under its revolving credit facilities and other debt and equity financing.
The Company expects to meet its short-term liquidity requirements generally
through its working capital, net cash provided by operating activities and from
the 2000 Unsecured Facility. The Company is frequently examining potential
property acquisitions and construction projects and, at any given time, one or
more of such acquisitions or construction projects may be under consideration.
Accordingly, the ability to fund property acquisitions and construction projects
is a major part of the Company's financing requirements. The Company expects to
meet its financing requirements through funds generated from operating
activities, proceeds from property sales, long-term or short-term borrowings
(including draws on the Company's revolving credit facilities) and the issuance
of additional debt or equity securities.
Following the Operating Partnership's issuance of $300.0 million in senior
unsecured notes in January 2001, the Company's total debt had a weighted average
term to maturity of approximately 5.9 years. The Company does not intend to
reserve funds to retire the Company's unsecured corporate debt or its mortgages
and loans payable upon maturity. Instead, the Company will seek to refinance
such debt at maturity or retire such debt through the issuance of additional
equity or debt securities. The Company is reviewing various refinancing options,
including the issuance of additional unsecured debt, preferred stock, and/or
obtaining additional mortgage debt, some or all of which may be completed during
2001. The Company anticipates that its available cash and cash equivalents and
cash flows from operating activities, together with cash available from
borrowings and other sources, will be adequate to meet the Company's capital and
liquidity needs both in the short and long-term. However, if these sources of
funds are insufficient or unavailable, the Company's ability to make the
expected distributions discussed below may be adversely affected.
To maintain its qualification as a REIT, the Company must make annual
distributions to its stockholders of at least 90 percent (for taxable years
beginning after December 31, 2000) of its REIT taxable income, determined
without regard to the dividends paid deduction and by excluding net capital
gains. Moreover, the Company intends to continue to make regular quarterly
distributions to its stockholders which, based upon current policy, in the
aggregate would equal approximately $138.9 million on an annualized basis.
However, any such distribution, whether for federal income tax purposes or
otherwise, would only be paid out of available cash after meeting both operating
requirements and scheduled debt service on mortgages and loans payable.
53
FUNDS FROM OPERATIONS
The Company considers funds from operations ("FFO"), after adjustment for
straight-lining of rents and non-recurring charges, one measure of REIT
performance. Funds from operations is defined as net income (loss) before
minority interest of unitholders, computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains (or losses) from debt
restructuring, other extraordinary items, and sales of depreciable rental
property, plus real estate-related depreciation and amortization. Funds from
operations should not be considered as an alternative to net income as an
indication of the Company's performance or to cash flows as a measure of
liquidity. Funds from operations presented herein is not necessarily comparable
to funds from operations presented by other real estate companies due to the
fact that not all real estate companies use the same definition. However, the
Company's funds from operations is comparable to the funds from operations of
real estate companies that use the current definition of the National
Association of Real Estate Investment Trusts ("NAREIT"), after the adjustment
for straight-lining of rents and non-recurring charges.
Funds from operations for the years ended December 31, 2000, 1999 and 1998, as
calculated in accordance with NAREIT's definition as published in October 1999,
after adjustment for straight-lining of rents and non-recurring charges, are
summarized in the following table (IN THOUSANDS):
Year Ended December 31,
2000 1999 1998
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Income before gain on sales of rental property,
minority interests and extraordinary item $146,110 $ 150,726 $ 151,464
Add: Real estate-related depreciation and amortization (1) 94,250 89,731 79,169
Gain on sale of land 2,248 -- --
Non-recurring charges 37,139 16,458 --
Deduct: Rental income adjustment for straight-lining of rents (2) (12,604) (12,596) (13,684)
Minority interests: partially-owned properties (5,072) (79) --
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Funds from operations, after adjustment for straight-lining
of rents and non-recurring charges $262,071 $ 244,240 $ 216,949
Deduct: Distributions to preferred unitholders (15,441) (15,476) (16,313)
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Funds from operations, after adjustment for straight-lining
of rents and non-recurring charges, after distributions
to preferred unitholders $246,630 $ 228,764 $ 200,636
===================================================================== =============== ================ ===============
Cash flows provided by operating activities $ 180,529 $ 243,638 $ 208,761
Cash flows provided by (used in) investing activities $ 6,189 $(195,178) $(749,067)
Cash flows (used in) provided by financing activities $(182,210) $ (45,598) $ 543,411
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Basic weighted averages shares/units outstanding (3) 66,392 66,885 63,438
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Diluted weighted average shares/units outstanding (3) 73,070 73,769 70,867
- --------------------------------------------------------------------- --------------- ---------------- ---------------
(1) Includes the Company's share from unconsolidated joint ventures of $2,928,
$3,166 and $817 for the years ended December 31, 2000, 1999 and 1998.
(2) Includes the Company's share from unconsolidated joint ventures of $24,
$158 and $109 for the years ended December 31, 2000, 1999 and 1998.
(3) See calculations for the amounts presented in the following reconciliation.
54
The following schedule reconciles the Company's basic weighted average shares to
the basic and diluted weighted average shares/units presented above:
Year Ended December 31,
2000 1999 1998
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Basic weighted average shares: 58,338 58,385 55,840
Add: Weighted average common units 8,054 8,500 7,598
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Basic weighted average shares/units: 66,392 66,885 63,438
Add: Weighted average preferred units
(after conversion to common units) 6,485 6,636 6,974
Stock options 188 241 411
Restricted Stock Awards 5 7 --
Stock Warrants -- -- 44
- --------------------------------------------------------------------- --------------- ---------------- ---------------
Diluted weighted average shares/units: 73,070 73,769 70,867
===================================================================== =============== ================ ===============
INFLATION
The Company's leases with the majority of its tenants provide for recoveries and
escalation charges based upon the tenant's proportionate share of, and/or
increases in, real estate taxes and certain operating costs, which reduce the
Company's exposure to increases in operating costs resulting from inflation.
DISRUPTION IN OPERATIONS DUE TO YEAR 2000 PROBLEMS
The Year 2000 issue was the result of computer programs and embedded chips using
a two-digit format, as opposed to four digits, to indicate the year. Such
computer systems may have been unable to interpret dates beyond the year 1999,
which could have caused a system failure or other computer errors, leading to
disruptions in operations.
We developed a three-phase Year 2000 project (the "Project") to identify, remedy
and test our Year 2000 systems compliance, including, but not limited to,
central accounting and operating systems, tenant compliance and property
compliance. In addition, we prepared contingency plans in the event of Year 2000
failures associated with critical building support systems and our accounting
system.
Our Project was completed on schedule during the fourth quarter of 1999.
Approximately $1.0 million was incurred to modify, upgrade and/or replace
non-compliant systems.
We experienced no system failures or computer errors associated with Year 2000
compliance. We have concluded the Project and anticipate no further Year 2000
compliance issues or expenditures.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The Company considers portions of this information to be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements relate to, without limitation, the Company's future economic
performance, plans and objectives for future operations and projections of
revenue and other financial items. Forward-looking statements can be identified
by the use of words such as "may," "will," "should," "expect," "anticipate,"
"estimate" or "continue" or comparable terminology. Forward-looking statements
are inherently subject to risks and uncertainties, many of which the Company
cannot predict with accuracy and some of which the Company might not even
anticipate. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions, it can
give no assurance that its expectations will be achieved. Future events and
actual results, financial and otherwise, may differ materially from the results
discussed in the forward-looking statements. See "Risk Factors" for a discussion
of important factors with respect to such forward-looking statements, including
certain risks and uncertainties, that could cause actual results to differ
materially from those presented in the forward-looking statements.
55
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the exposure to loss resulting from changes in interest rates,
foreign currency exchange rates, commodity prices and equity prices. In
pursuing its business plan, the primary market risk to which the Company is
exposed is interest rate risk. Changes in the general level of interest rates
prevailing in the financial markets may affect the spread between the
Company's yield on invested assets and cost of funds and, in turn, our
ability to make distributions or payments to our investors.
Approximately $1.2 billion of the Company's long-term debt bears interest at
fixed rates and therefore the fair value of these instruments is affected by
changes in market interest rates. The following table presents principal
cash flows (in thousands) based upon maturity dates of the debt obligations and
the related weighted-average interest rates by expected maturity dates for the
fixed rate debt. The interest rate on the variable rate debt as of December 31,
2000 ranged from LIBOR plus 65 basis points to LIBOR plus 80 basis points.
DECEMBER 31, 2000
DEBT,
INCLUDING CURRENT PORTION 2001 2002 2003 2004 2005 THEREAFTER TOTAL FAIR VALUE
- ------------------------- ---- ---- ---- ---- ---- ---------- ----- ----------
Fixed Rate $7,451 $3,433 $195,674 $312,283 $254,762 $473,891 $1,247,494 $1,240,139
Average Interest Rate 7.43% 8.20% 7.30% 7.34% 7.13% 7.47% 7.34%
Variable Rate $348,840 $32,178 $ 381,018 $ 381,018
While the Company has not experienced any significant credit losses, in the
event of a significant rising interest rate environment and/or economic
downturn, defaults could increase and result in losses to the Company which
adversely affect its operating results and liquidity.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is submitted as a separate section of this Form 10-K.
See Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
56
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 is incorporated by reference from the
Company's definitive proxy statement for its annual meeting of shareholders to
be held on May 15, 2001.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference from the
Company's definitive proxy statement for its annual meeting of shareholders to
be held on May 15, 2001.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated by reference from the
Company's definitive proxy statement for its annual meeting of shareholders to
be held on May 15, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is incorporated by reference from the
Company's definitive proxy statement for its annual meeting of shareholders to
be held on May 15, 2001.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
REPORTS ON FORM 8-K
(a) 1. Financial Statements and Report of PricewaterhouseCoopers LLP,
Independent Accountants
Consolidated Balance Sheets as of December 31, 2000 and 1999
Consolidated Statements of Operations for the Years Ended December 31,
2000, 1999 and 1998
Consolidated Statements of Changes in Stockholders' Equity for the
Years Ended December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows for the Years Ended December 31,
2000, 1999 and 1998
Notes to Consolidated Financial Statements
(a) 2. FINANCIAL STATEMENT SCHEDULES
Schedule III - Real Estate Investments and Accumulated Depreciation as
of December 31, 2000
All other schedules are omitted because they are not required or the
required information is shown in the financial statements or notes
thereto.
57
(a) 3. EXHIBITS
The following exhibits are filed herewith or are incorporated by
reference to exhibits previously filed:
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
3.1 Restated Charter of Mack-Cali Realty Corporation dated June 2,
1999, together with Articles Supplementary thereto (filed as
Exhibit 3.1 to the Company's Form 8-K dated June 10, 1999 and
as Exhibit 4.2 to the Company's Form 8-K dated July 6, 1999
and each incorporated herein by reference).
3.2 Amended and Restated Bylaws of Mack-Cali Realty Corporation
dated June 10, 1999 (filed as Exhibit 3.2 to the Company's
Form 8-K dated June 10, 1999 and incorporated herein by
reference).
3.3 Second Amended and Restated Agreement of Limited Partnership
dated December 11, 1997, for Mack-Cali Realty, L.P. (filed as
Exhibit 10.110 to the Company's Form 8-K dated December 11,
1997 and incorporated herein by reference).
3.4 Amendment No. 1 to the Second Amended and Restated Agreement
of Limited Partnership of Mack-Cali Realty, L.P. (filed as
Exhibit 3.1 to the Company's Registration Statement on Form
S-3, Registration No. 333-57103, and incorporated herein by
reference).
3.5 Second Amendment to the Second Amended and Restated Agreement
of Limited Partnership of Mack-Cali Realty, L.P. (filed as
Exhibit 10.2 to the Company's Form 8-K dated July 6, 1999 and
incorporated herein by reference).
4.1 Amended and Restated Shareholder Rights Agreement, dated as of
March 7, 2000, between Mack-Cali Realty Corporation and
EquiServe Trust Company, N.A., as Rights Agent (filed as
Exhibit 4.1 to the Company's Form 8-K dated March 7, 2000 and
incorporated herein by reference).
4.2 Amendment No. 1 to the Amended and Restated Shareholder Rights
Agreement, dated as of June 27, 2000, by and among Mack-Cali
Realty Corporation and Equiserve Trust Company, N.A. (filed as
Exhibit 4.1 to the Company's Form 8-K dated June 27, 2000).
4.3 Indenture dated as of March 16, 1999, by and among Mack-Cali
Realty, L.P., as issuer, Mack-Cali Realty Corporation, as
guarantor, and Wilmington Trust Company, as trustee (filed as
Exhibit 4.1 to the Company's Form 8-K dated March 16, 1999 and
incorporated herein by reference).
4.4 Supplemental Indenture No. 1 dated as of March 16, 1999, by
and among Mack-Cali Realty, L.P., as issuer, and Wilmington
Trust Company, as trustee (filed as Exhibit 4.2 to the
Company's Form 8-K dated March 16, 1999 and incorporated
herein by reference).
58
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
4.5 Supplemental Indenture No. 2 dated as of August 2, 1999, by
and among Mack-Cali Realty, L.P., as issuer, and Wilmington
Trust Company, as trustee (filed as Exhibit 4.4 to the
Company's Form 10-Q dated June 30, 1999 and incorporated
herein by reference).
4.6 Supplemental Indenture No. 3 dated as of December 21, 2000, by
and among Mack-Cali Realty, L.P., as issuer, and Wilmington
Trust Company, as trustee (filed as Exhibit 4.2 to the
Company's Form 8-K dated December 21, 2000 and incorporated
herein by reference).
4.7 Supplemental Indenture No. 4 dated as of January 29, 2001, by
and among Mack-Cali Realty, L.P., as issuer, and Wilmington
Trust Company, as trustee (filed as Exhibit 4.2 to the
Company's Form 8-K dated January 29, 2001 and incorporated
herein by reference).
10.1 Amended and Restated Employment Agreement dated as of July 1,
1999 between Mitchell E. Hersh and Mack-Cali Realty
Corporation (filed as Exhibit 10.2 to the Company's Form 10-Q
dated June 30, 1999 and incorporated herein by reference).
10.2 Second Amended and Restated Employment Agreement dated as of
July 1, 1999 between Timothy M. Jones and Mack-Cali Realty
Corporation (filed as Exhibit 10.3 to the Company's Form 10-Q
dated June 30, 1999 and incorporated herein by reference).
10.3 Second Amended and Restated Employment Agreement dated as of
July 1, 1999 between Barry Lefkowitz and Mack-Cali Realty
Corporation (filed as Exhibit 10.6 to the Company's Form 10-Q
dated June 30, 1999 and incorporated herein by reference).
10.4 Second Amended and Restated Employment Agreement dated as of
July 1, 1999 between Roger W. Thomas and Mack-Cali Realty
Corporation (filed as Exhibit 10.7 to the Company's Form 10-Q
dated June 30, 1999 and incorporated herein by reference).
*10.5 Employment Agreement dated as of December 5, 2000 between
Michael Grossman and Mack-Cali Realty Corporation.
10.6 Restricted Share Award Agreement dated as of July 1, 1999
between Mitchell E. Hersh and Mack-Cali Realty Corporation
(filed as Exhibit 10.8 to the Company's Form 10-Q dated June
30, 1999 and incorporated herein by reference).
10.7 Restricted Share Award Agreement dated as of July 1, 1999
between Timothy M. Jones and Mack-Cali Realty Corporation
(filed as Exhibit 10.9 to the Company's Form 10-Q dated June
30, 1999 and incorporated herein by reference).
10.8 Restricted Share Award Agreement dated as of July 1, 1999
between Barry Lefkowitz and Mack-Cali Realty Corporation
(filed as Exhibit 10.12 to the Company's Form 10-Q dated June
30, 1999 and incorporated herein by reference).
10.9 Restricted Share Award Agreement dated as of July 1, 1999
between Roger W. Thomas and Mack-Cali Realty Corporation
(filed as Exhibit 10.13 to the Company's Form 10-Q dated June
30, 1999 and incorporated herein by reference).
59
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
*10.10 Amendment No. 3 to and Restatement of Revolving Credit
Agreement dated as of June 22, 2000, by and among Mack-Cali
Realty, L.P. and The Chase Manhattan Bank, Fleet National Bank
and Other Lenders Which May Become Parties Thereto with The
Chase Manhattan Bank, as administrative agent, Fleet National
Bank, as syndication agent, Bank of America, N.A., as
documentation agent, Chase Securities Inc. and FleetBoston
Robertson Stephens Inc., as arrangers, Bank One, N.A., First
Union National Bank and Commerzbank Aktiengesellschaft, as
senior managing agents, PNC Bank National Association, as
managing agent, and Societe Generale, Dresdner Bank AG, Wells
Fargo Bank, National Association, Bank Austria Creditanstalt
Corporate Finance, Inc., Bayerische Hypo-und Vereinsbank and
Summit Bank, as co-agents.
10.11 Contribution and Exchange Agreement among The MK Contributors,
The MK Entities, The Patriot Contributors, The Patriot
Entities, Patriot American Management and Leasing Corp., Cali
Realty, L.P. and Cali Realty Corporation, dated September 18,
1997 (filed as Exhibit 10.98 to the Company's Form 8-K dated
September 19, 1997 and incorporated herein by reference).
10.12 First Amendment to Contribution and Exchange Agreement, dated
as of December 11, 1997, by and among the Company and the Mack
Group (filed as Exhibit 10.99 to the Company's Form 8-K dated
December 11, 1997 and incorporated herein by reference).
10.13 Termination and Release Agreement, dated September 21, 2000,
by and among Mack-Cali Realty Corporation, Mack-Cali Realty,
L.P., Prentiss Properties Trust and Prentiss Properties
Acquisition Partners, L.P. (filed as Exhibit 10.1 to the
Company's Form 8-K dated September 21, 2000 and incorporated
herein by reference).
10.14 2000 Employee Stock Option Plan (filed as Exhibit B to the
Company's Proxy Statement for its Annual Meeting of
Stockholders held on September 11, 2000 and incorporated
herein by reference).
10.15 2000 Director Stock Option Plan (filed as Exhibit C to the
Company's Proxy Statement for its Annual Meeting of
Stockholders held on September 11, 2000 and incorporated
herein by reference).
*21 Subsidiaries of the Company.
*23 Consent of PricewaterhouseCoopers LLP, independent
accountants.
(b) Reports on Form 8-K
During the fourth quarter of 2000, the Company filed a report on Form
8-K dated November 7, 2000, furnishing under Item 9 certain
supplemental data regarding its operations.
- ----------------------
*filed herewith
60
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Mack-Cali Realty Corporation
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) on page 57 present fairly, in all material
respects, the financial position of Mack-Cali Realty Corporation and its
subsidiaries at December 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000 in conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the financial statement
schedule listed in the index appearing under Item 14(a)(2) on page 57 presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
New York, New York
February 20, 2001
61
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
================================================================================
December 31,
ASSETS 2000 1999
- -------------------------------------------------------------------------------------------------------------------
Rental property
Land and leasehold interests $ 561,210 $ 549,096
Buildings and improvements 3,026,561 3,014,532
Tenant improvements 110,123 85,057
Furniture, fixtures and equipment 6,460 6,160
- -------------------------------------------------------------------------------------------------------------------
3,704,354 3,654,845
Less - accumulated depreciation and amortization (309,951) (256,629)
- -------------------------------------------------------------------------------------------------------------------
Total rental property 3,394,403 3,398,216
Cash and cash equivalents 13,179 8,671
Investments in unconsolidated joint ventures 101,438 89,134
Unbilled rents receivable 50,499 53,253
Deferred charges and other assets, net 102,655 66,436
Restricted cash 6,557 7,081
Accounts receivable, net of allowance for doubtful accounts
of $552 and $672 8,246 6,810
- -------------------------------------------------------------------------------------------------------------------
Total assets $ 3,676,977 $ 3,629,601
===================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Senior unsecured notes $ 798,099 $ 782,785
Revolving credit facilities 348,840 177,000
Mortgages and loans payable 481,573 530,390
Dividends and distributions payable 43,496 42,499
Accounts payable and accrued expenses 53,608 63,394
Rents received in advance and security deposits 31,146 36,150
Accrued interest payable 17,477 16,626
- -------------------------------------------------------------------------------------------------------------------
Total liabilities 1,774,239 1,648,844
- -------------------------------------------------------------------------------------------------------------------
MINORITY INTERESTS:
Operating Partnership 447,523 455,275
Partially-owned properties 1,925 83,600
- -------------------------------------------------------------------------------------------------------------------
Total minority interests 449,448 538,875
- -------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock, 5,000,000 shares authorized, none issued -- --
Common stock, $0.01 par value, 190,000,000 shares authorized,
56,980,893 and 58,446,552 shares outstanding 570 584
Additional paid-in capital 1,513,037 1,549,888
Dividends in excess of net earnings (57,149) (103,902)
Unamortized stock compensation (3,168) (4,688)
- -------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,453,290 1,441,882
- -------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 3,676,977 $ 3,629,601
===================================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
62
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
================================================================================
Years Ended December 31,
REVENUES 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------
Base rents $ 491,193 $ 469,853 $ 427,528
Escalations and recoveries from tenants 58,488 62,182 51,981
Parking and other 15,325 15,915 10,712
Equity in earnings of unconsolidated joint ventures 8,055 2,593 1,055
Interest income 3,092 941 2,423
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues 576,153 551,484 493,699
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Real estate taxes 59,400 57,382 48,297
Utilities 42,035 41,580 38,440
Operating services 70,711 69,689 63,711
General and administrative 23,276 25,480 24,828
Depreciation and amortization 92,088 87,209 78,916
Interest expense 105,394 102,960 88,043
Non-recurring charges 37,139 16,458 --
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 430,043 400,758 342,235
- ------------------------------------------------------------------------------------------------------------------------------
Income before gain on sales of rental property,
minority interests and extraordinary item 146,110 150,726 151,464
Gain on sales of rental property 85,353 1,957 --
- ------------------------------------------------------------------------------------------------------------------------------
Income before minority interests and extraordinary item 231,463 152,683 151,464
MINORITY INTERESTS:
Operating partnership 41,053 32,865 32,513
Partially-owned properties 5,072 79 --
- ------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 185,338 119,739 118,951
Extraordinary item - loss on early retirement of debt
(net of minority interest's share of $297 in 1998) -- -- (2,373)
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 185,338 $ 119,739 $ 116,578
==============================================================================================================================
BASIC EARNINGS PER SHARE:
Income before extraordinary item $ 3.18 $ 2.05 $ 2.13
Extraordinary item - loss on early retirement of debt -- -- (0.04)
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 3.18 $ 2.05 $ 2.09
==============================================================================================================================
DILUTED EARNINGS PER SHARE:
Income before extraordinary item $ 3.10 $ 2.04 $ 2.11
Extraordinary item - loss on early retirement of debt -- -- (0.04)
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 3.10 $ 2.04 $ 2.07
==============================================================================================================================
Dividends declared per common share $ 2.38 $ 2.26 $ 2.10
- ------------------------------------------------------------------------------------------------------------------------------
Basic weighted average shares outstanding 58,338 58,385 55,840
- ------------------------------------------------------------------------------------------------------------------------------
Diluted weighted average shares outstanding 73,070 67,133 63,893
- ------------------------------------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
63
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (IN THOUSANDS)
================================================================================
Additional Dividends in Unamortized Total
Common Stock Paid-In Excess of Stock Stockholders'
Shares Par Value Capital Net Earnings Compensation Equity
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at January 1, 1998 49,856 $499 $ 1,244,883 $ (87,942) $ -- $1,157,440
Net income -- -- -- 116,578 -- 116,578
Dividends -- -- -- (119,950) -- (119,950)
Net proceeds from common
stock offerings 7,968 80 288,313 -- -- 288,393
Redemption of common units for
shares of common stock 29 -- 1,029 -- -- 1,029
Proceeds from stock options exercised 268 3 5,472 -- -- 5,475
Repurchase of common stock (855) (9) (25,049) -- -- (25,058)
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 57,266 573 1,514,648 (91,314) -- 1,423,907
Net income -- -- -- 119,739 -- 119,739
Dividends -- -- -- (132,327) -- (132,327)
Redemption of common units for
shares of common stock 1,935 19 56,046 -- -- 56,065
Proceeds from stock options exercised 48 -- 1,049 -- -- 1,049
Proceeds from dividend reinvestment
and stock purchase plan 1 -- 32 -- -- 32
Deferred compensation plan for directors -- -- 90 -- -- 90
Issuance of Restricted Stock Awards 212 2 5,513 -- (5,515) --
Amortization of stock compensation -- -- -- -- 827 827
Repurchase of common stock (1,015) (10) (27,490) -- -- (27,500)
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999 58,447 584 1,549,888 (103,902) (4,688) 1,441,882
Net income -- -- -- 185,338 -- 185,338
Dividends -- -- -- (138,585) -- (138,585)
Redemption of common units for
shares of common stock 448 5 14,234 -- -- 14,239
Proceeds from stock options exercised 117 1 2,499 -- -- 2,500
Deferred compensation plan for directors -- -- 111 -- -- 111
Amortization of stock compensation -- -- -- -- 1,672 1,672
Adjustment to fair value of restricted
stock -- -- 380 -- (283) 97
Cancellation of Restricted Stock Awards (5) -- (131) -- 131 --
Repurchase of common stock (2,026) (20) (55,494) -- -- (55,514)
Stock options charge -- -- 1,550 -- -- 1,550
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000 56,981 $570 $ 1,513,037 $ (57,149) $(3,168) $1,453,290
=================================================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
64
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
================================================================================
Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------------
Net income $ 185,338 $ 119,739 $ 116,578
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 92,088 87,209 78,916
Amortization of stock compensation 1,769 827 --
Amortization of deferred financing costs and debt discount 4,257 3,570 1,580
Stock options charge 1,550 -- --
Equity in earnings of unconsolidated joint ventures (8,055) (2,593) (1,055)
Gain on sales of rental property (85,353) (1,957) --
Minority interests 46,125 32,944 32,513
Extraordinary item - loss on early retirement of debt -- -- 2,373
Changes in operating assets and liabilities:
Increase in unbilled rents receivable (12,591) (12,412) (13,600)
Increase in deferred charges and other assets, net (31,332) (28,893) (17,811)
Increase in accounts receivable, net (1,436) (2,882) (192)
(Decrease) increase in accounts payable and accrued expenses (9,786) 27,536 2,117
(Decrease) increase in rents received in advance and security deposits (2,896) 6,170 8,585
Increase (decrease) in accrued interest payable 851 14,380 (1,243)
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 180,529 $ 243,638 $ 208,761
==========================================================================================================================
CASH FLOWS FROM INVESTING ACTIVITIES
- --------------------------------------------------------------------------------------------------------------------------
Additions to rental property $ (268,243) $ (191,507) $ (692,766)
Issuance of mortgage note receivable (14,733) -- (20,000)
Repayment of mortgage note receivable -- -- 20,000
Investments in unconsolidated joint ventures (17,587) (40,567) (58,844)
Distributions from unconsolidated joint ventures 13,338 20,551 1,725
Proceeds from sales of rental property 292,890 17,400 --
Decrease (increase) in restricted cash 524 (1,055) 818
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities $ 6,189 $ (195,178) $ (749,067)
==========================================================================================================================
CASH FLOWS FROM FINANCING ACTIVITIES
- --------------------------------------------------------------------------------------------------------------------------
Proceeds from senior unsecured notes $ 15,000 $ 782,535 $ --
Proceeds from revolving credit facilities 708,004 372,248 1,375,758
Proceeds from mortgages and loans payable -- 45,500 150,000
Repayments of revolving credit facilities (536,164) (866,848) (826,258)
Repayments of mortgages and loans payable (48,817) (264,431) (271,807)
Proceeds from minority interest of consolidated partially-owned properties -- 83,600 --
Distributions to minority interest in partially-owned properties (88,672) -- --
Repurchase of common stock (55,514) (27,500) (25,058)
Redemption of common units -- -- (3,163)
Payment of financing costs (6,394) (7,048) (10,110)
Net proceeds from common stock offerings -- -- 288,393
Proceeds from stock options exercised 2,500 1,049 5,475
Proceeds from dividend reinvestment and stock purchase plan -- 32 --
Payment of dividends and distributions (172,153) (164,735) (139,819)
- --------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities $ (182,210) $ (45,598) $ 543,411
==========================================================================================================================
Net increase in cash and cash equivalents $ 4,508 $ 2,862 $ 3,105
Cash and cash equivalents, beginning of period $ 8,671 $ 5,809 $ 2,704
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 13,179 $ 8,671 $ 5,809
==========================================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
65
MACK-CALI REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE/UNIT AMOUNTS)
================================================================================
1. ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION
Mack-Cali Realty Corporation, a Maryland corporation, and subsidiaries (the
"Company") is a fully-integrated, self-administered, self-managed real estate
investment trust ("REIT") providing leasing, management, acquisition,
development, construction and tenant-related services for its properties. As of
December 31, 2000, the Company owned or had interests in 267 properties plus
developable land (collectively, the "Properties"). The Properties aggregate
approximately 28.2 million square feet, and are comprised of 163 office
buildings and 91 office/flex buildings totaling approximately 27.8 million
square feet (which includes eight office buildings and four office/flex
buildings aggregating 1.5 million square feet, owned by unconsolidated joint
ventures in which the Company has investment interests), six
industrial/warehouse buildings totaling approximately 387,400 square feet, two
multi-family residential complexes consisting of 451 units, two stand-alone
retail properties and three land leases. The Properties are located in 11
states, primarily in the Northeast, plus the District of Columbia.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include all accounts of the
Company, its majority-owned and/or controlled subsidiaries, which consist
principally of Mack-Cali Realty, L.P. ("Operating Partnership"). See Investments
in Unconsolidated Joint Ventures in Note 2 for the Company's treatment of
unconsolidated joint venture interests. All significant intercompany accounts
and transactions have been eliminated.
The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
RENTAL
PROPERTY Rental properties are stated at cost less accumulated
depreciation and amortization. Costs directly related to the
acquisition and development of rental properties are
capitalized. Capitalized development costs include interest,
property taxes, insurance and other project costs incurred
during the period of development. Included in total rental
property is construction-in-progress of $162,497 and $99,987
as of December 31, 2000 and 1999, respectively. Ordinary
repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life
of the asset, are capitalized and depreciated over their
estimated useful lives. Fully-depreciated assets are removed
from the accounts.
Properties are depreciated using the straight-line method over
the estimated useful lives of the assets. The estimated useful
lives are as follows:
Leasehold interests Remaining lease term
-----------------------------------------------------------------------------------
Buildings and improvements 5 to 40 years
-----------------------------------------------------------------------------------
Tenant improvements The shorter of the term of
the related lease or useful life
-----------------------------------------------------------------------------------
Furniture, fixtures and equipment 5 to 10 years
-----------------------------------------------------------------------------------
66
On a periodic basis, management assesses whether there are any
indicators that the value of the real estate properties may be
impaired. A property's value is impaired only if management's
estimate of the aggregate future cash flows (undiscounted and
without interest charges) to be generated by the property are
less than the carrying value of the property. To the extent
impairment has occurred, the loss shall be measured as the
excess of the carrying amount of the property over the fair
value of the property. Management does not believe that the
value of any of its rental properties is impaired.
When assets are identified by management as held for sale, the
Company discontinues depreciating the assets and estimates the
sales price, net of selling costs, of such assets. If, in
management's opinion, the net sales price of the assets which
have been identified for sale is less than the net book value
of the assets, a valuation allowance is established. See Note
7.
INVESTMENTS IN
UNCONSOLIDATED
JOINT VENTURES The Company accounts for its investments in unconsolidated
joint ventures under the equity method of accounting as the
Company exercises significant influence, but does not control
these entities. These investments are recorded initially at
cost, as Investments in Unconsolidated Joint Ventures, and
subsequently adjusted for equity in earnings and cash
contributions and distributions. Any difference between the
carrying amount of these investments on the balance sheet of
the Company and the underlying equity in net assets is
amortized as an adjustment to equity in earnings of
unconsolidated joint ventures over 40 years. See Note 4.
CASH AND CASH
EQUIVALENTS All highly liquid investments with a maturity of three months
or less when purchased are considered to be cash equivalents.
DEFERRED
FINANCING COSTS Costs incurred in obtaining financing are capitalized and
amortized on a straight-line basis, which approximates the
effective interest method, over the term of the related
indebtedness. Amortization of such costs is included in
interest expense and was $3,943, $3,320 and $1,580 for the
years ended December 31, 2000, 1999 and 1998, respectively.
DEFERRED
LEASING COSTS Costs incurred in connection with leases are capitalized and
amortized on a straight-line basis over the terms of the
related leases and included in depreciation and amortization.
Unamortized deferred leasing costs are charged to amortization
expense upon early termination of the lease. Certain employees
of the Company provide leasing services to the Properties and
receive compensation based on space leased. The portion of
such compensation, which is capitalized and amortized,
approximated $3,704, $3,704 and $3,509 for the years ended
December 31, 2000, 1999 and 1998, respectively.
REVENUE
RECOGNITION Base rental revenue is recognized on a straight-line basis
over the terms of the respective leases. Unbilled rents
receivable represents the amount by which straight-line rental
revenue exceeds rents currently billed in accordance with the
lease agreements. Parking and other revenue includes income
from parking spaces leased to tenants, income from tenants for
additional services provided by the Company, income from
tenants for early lease terminations and income from managing
properties for third parties. Rental income on residential
property under operating leases having terms generally of one
year or less is recognized when earned.
Reimbursements are received from tenants for certain costs as
provided in the lease agreements. These costs generally
include real estate taxes, utilities, insurance, common area
maintenance and other recoverable costs. See Note 15.
67
INCOME AND
OTHER TAXES The Company has elected to be taxed as a REIT under Sections
856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code"). As a REIT, the Company generally will
not be subject to corporate federal income tax on net income
that it currently distributes to its shareholders, provided
that the Company, for its taxable years beginning prior to
January 1, 2001, satisfies certain organizational and
operational requirements including the requirement to
distribute at least 95 percent of its REIT taxable income to
its shareholders. For its taxable years beginning after
December 31, 2000, as a result of recent amendments to the
Code, the Company will be required to distribute at least 90
percent of its REIT taxable income to its shareholders.
Effective January 1, 2001, the Company may elect to treat one
or more of its existing or newly created corporate
subsidiaries as a taxable REIT subsidiary ("TRS"). In general,
a TRS of the Company may perform additional services for
tenants of the Company and generally may engage in any real
estate or non-real estate related business (except for the
operation or management of health care facilities or lodging
facilities or the providing to any person, under a franchise,
license or otherwise, rights to any brand name under which any
lodging facility or health care facility is operated). A TRS
is subject to corporate federal income tax. The Company has
elected to treat certain of its existing and newly created
corporate subsidiaries as a TRS. If the Company fails to
qualify as a REIT in any taxable year, the Company will be
subject to federal income tax (including any applicable
alternative minimum tax) on its taxable income at regular
corporate tax rates. The Company is subject to certain state
and local taxes.
INTEREST RATE
CONTRACTS Interest rate contracts are utilized by the Company to reduce
interest rate risks. The Company does not hold or issue
derivative financial instruments for trading purposes. The
differentials to be received or paid under contracts
designated as hedges are recognized over the life of the
contracts as adjustments to interest expense.
In certain situations, the Company uses forward treasury lock
agreements to mitigate the potential effects of changes in
interest rates for prospective transactions. Gains and losses
are deferred and amortized as adjustments to interest expense
over the remaining life of the associated debt to the extent
that such debt remains outstanding.
EARNINGS
PER SHARE In accordance with the Statement of Financial Accounting
Standards No. 128 ("FASB No. 128"), the Company presents both
basic and diluted earnings per share ("EPS"). Basic EPS
excludes dilution and is computed by dividing net income
available to common stockholders by the weighted average
number of shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or
converted into common stock, where such exercise or conversion
would result in a lower EPS amount.
DIVIDENDS AND
DISTRIBUTIONS
PAYABLE The dividends and distributions payable at December 31, 2000
represents dividends payable to shareholders of record as of
January 4, 2001 (56,982,893 shares), distributions payable to
minority interest common unitholders (7,963,725 common units)
on that same date and preferred distributions payable to
preferred unitholders (220,340 preferred units) for the fourth
quarter 2000. The fourth quarter 2000 dividends and common
unit distributions of $0.61 per share and per common unit, as
well as the fourth quarter preferred unit distribution of
$17.6046 per preferred unit, were approved by the Board of
Directors on December 20, 2000 and paid on January 22, 2001.
The dividends and distributions payable at December 31, 1999
represents dividends payable to shareholders of record as of
January 4, 2000 (58,450,552 shares), distributions payable to
minority interest common unitholders (8,153,710 common units)
on that same date and preferred distributions payable to
preferred unitholders (229,304 preferred units) for the fourth
quarter 1999. The fourth quarter 1999 dividends and common
unit distributions of $0.58 per share and
68
per common unit (pro-rated for units issued during the
quarter), as well as the fourth quarter preferred unit
distribution of $16.8750 per preferred unit, were approved by
the Board of Directors on December 17, 1999 and paid on
January 21, 2000.
UNDERWRITING
COMMISSIONS
AND COSTS Underwriting commissions and costs incurred in connection with
the Company's stock offerings are reflected as a reduction of
additional paid-in capital.
STOCK OPTIONS The Company accounts for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations ("APB No. 25"). Under
APB No. 25, compensation cost is measured as the excess, if
any, of the quoted market price of the Company's stock at the
date of grant over the exercise price of the option granted.
Compensation cost for stock options, if any, is recognized
ratably over the vesting period. The Company's policy is to
grant options with an exercise price equal to the quoted
closing market price of the Company's stock on the business
day preceding the grant date. Accordingly, no compensation
cost has been recognized under the Company's stock option
plans for the granting of stock options. The Company provides
additional pro forma disclosures as required under Statement
of Financial Accounting Standards No. 123, "Accounting for
Stock Based Compensation" ("FASB No. 123"). See Note 16.
EXTRAORDINARY
ITEM Extraordinary item represents the effect resulting from the
early settlement of certain debt obligations, including
related deferred financing costs, prepayment penalties, yield
maintenance payments and other related items.
NON-RECURRING
CHARGES The Company considers non-recurring charges as costs incurred
specific to significant non-recurring events that impact the
comparative measurement of the Company's performance.
RECLASSIFICATIONS Certain reclassifications have been made to prior period
amounts in order to conform with current period presentation.
3. ACQUISITIONS, PROPERTY SALES AND OTHER TRANSACTIONS
2000 TRANSACTIONS
OPERATING PROPERTY ACQUISITIONS
The Company acquired the following operating properties during the year ended
December 31, 2000:
- -----------------------------------------------------------------------------------------------------------------------
Acquisition # of Rentable Investment by
Date Property/Portfolio Name Location Bldgs. Square Feet Company (a)
- -----------------------------------------------------------------------------------------------------------------------
OFFICE
5/23/00 555 & 565 Taxter Road Elmsford, Westchester County, NY 2 341,108 $42,980
6/14/00 Four Gatehall Drive Parsippany, Morris County, NJ 1 248,480 42,381
- -----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTY ACQUISITIONS: 3 589,588 $85,361
- -----------------------------------------------------------------------------------------------------------------------
OFFICE/FLEX
3/24/00 Two Executive Drive (b) Moorestown, Burlington County, NJ 1 60,800 $ 4,007
7/14/00 915 North Lenola Road (b) Moorestown, Burlington County, NJ 1 52,488 2,542
- -----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTY ACQUISITION: 2 113,288 $ 6,549
- -----------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING PROPERTY ACQUISITIONS: 5 702,876 $91,910
=======================================================================================================================
(a) Transactions were funded primarily from net proceeds received in the sale
or sales of rental property.
(b) The properties were acquired through the exercise of a purchase option
obtained in the initial acquisition of the McGarvey portfolio in January
1998.
69
PROPERTIES PLACED IN SERVICE
The Company placed in service the following properties through the completion of
development during the year ended December 31, 2000:
- -----------------------------------------------------------------------------------------------------------------------
Date Placed # of Rentable Investment by
in Service Property Name Location Bldgs. Square Feet Company (a)
- -----------------------------------------------------------------------------------------------------------------------
OFFICE
9/01/00 Harborside Plaza 4-A (b) Jersey City, Hudson County, NJ 1 207,670 $61,459
9/15/00 Liberty Corner Corp. Center Bernards Township, Somerset County, NJ 1 132,010 17,430
- -----------------------------------------------------------------------------------------------------------------------
TOTAL PROPERTIES PLACED IN SERVICE: 2 339,680 $78,889
=======================================================================================================================
(a) Transactions were funded primarily through draws on the Company's revolving
credit facilities and amounts presented are as of December 31, 2000.
(b) Project includes seven-story, 1,100-car parking garage.
LAND ACQUISITIONS
On January 13, 2000, the Company acquired approximately 12.7 acres of
developable land located at the Company's Airport Business Center, Lester,
Delaware County, Pennsylvania. The land was acquired for approximately $2,069.
On August 24, 2000, the Company entered into a joint venture with SJP Properties
Company ("SJP Properties") to form MC-SJP Morris V Realty, LLC and MC-SJP Morris
VI Realty, LLC, which acquired approximately 47.5 acres of developable land
located in Parsippany, Morris County, New Jersey. The land was acquired for
approximately $16,193. The Company accounts for the joint venture on a
consolidated basis.
PROPERTY SALES
The Company sold the following properties during the year ended December 31,
2000:
- -------------------------------------------------------------------------------------------------------------------------------
SALE # OF RENTABLE NET SALES NET BOOK GAIN/
DATE PROPERTY NAME LOCATION BLDGS. SQUARE FEET PROCEEDS VALUE (LOSS)
- -------------------------------------------------------------------------------------------------------------------------------
LAND:
02/25/00 Horizon Center Land Hamilton Township, Mercer
County, NJ -- 39.1 acres $ 4,180 $ 1,932 $ 2,248
OFFICE:
04/17/00 95 Christopher Columbus Dr. Jersey City, Hudson County, NJ 1 621,900 148,222 80,583 67,639
04/20/00 6900 IH-40 West Amarillo, Potter County, TX 1 71,771 1,467 1,727 (260)
06/09/00 412 Mt. Kemble Avenue Morris Twp., Morris County, NJ 1 475,100 81,981 75,439 6,542
09/21/00 Cielo Center Austin, Travis County, TX 1 270,703 45,785 35,749 10,036
11/15/00 210 South 16th Street (a) Omaha, Douglas County, NE 1 319,535 11,976 12,828 (852)
- -------------------------------------------------------------------------------------------------------------------------------
TOTALS: 5 1,759,009 $293,611 $208,258 $85,353
===============================================================================================================================
(a) In connection with the sale of the Omaha, Nebraska property, the Company
provided to the purchaser an $8,750 mortgage loan bearing interest
payable monthly at an annual rate of 9.50 percent. The loan is secured by
the Omaha, Nebraska property and will mature on November 14, 2003.
OTHER EVENTS
On June 27, 2000, William L. Mack was appointed Chairman of the Board of
Directors and John J. Cali was named Chairman Emeritus of the Board of
Directors. Brant Cali resigned as Executive Vice President, Chief Operating
Officer and Assistant Secretary of the Company and as a member of the Board of
Directors, and John R. Cali resigned as Executive Vice President, Development of
the Company. John R. Cali was appointed to the Board of Directors of the Company
to take the seat previously held by Brant Cali. See Note 14.
On September 21, 2000, the Company and Prentiss Properties Trust, a Maryland
REIT ("Prentiss"), mutually agreed to terminate the agreement and plan of merger
("Merger Agreement") dated as of June 27, 2000, among the Company, the Operating
Partnership, Prentiss and Prentiss Properties Acquisition Partners, L.P., a
Delaware limited partnership of which Prentiss (through a wholly-owned direct
subsidiary) is the sole general partner ("Prentiss Partnership"). In connection
with such termination, the Company deposited $25,000 into escrow for the benefit
of Prentiss and Prentiss Partnership. This cost and approximately $2,911 of
other costs associated with the termination of the Merger Agreement are
included in non-recurring charges for the year ended December 31, 2000.
Simultaneous with the termination, the Company sold to Prentiss its 270,703
square-foot Cielo Center property located in Austin, Travis County, Texas.
See "2000 Transactions - Property Sales."
70
1999 TRANSACTIONS
OPERATING PROPERTY ACQUISITIONS
The Company acquired the following operating properties during the year ended
December 31, 1999:
- ----------------------------------------------------------------------------------------------------------------------
Acquisition # of Rentable Investment by
Date Property/Portfolio Name Location Bldgs. Square Feet Company (a)
- ----------------------------------------------------------------------------------------------------------------------
OFFICE
3/05/99 Pacifica Portfolio - Phase III (b) Colorado Springs, El Paso County, CO 2 94,737 $ 5,709
7/21/99 1201 Connecticut Avenue, NW Washington, D.C. 1 169,549 32,799
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTY ACQUISITIONS: 3 264,286 $38,508
- ----------------------------------------------------------------------------------------------------------------------
OFFICE/FLEX
12/21/99 McGarvey Portfolio - Phase III (c) Moorestown, Burlington County, NJ 3 138,600 $ 8,012
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTY ACQUISITION: 3 138,600 $ 8,012
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING PROPERTY ACQUISITIONS: 6 402,886 $46,520
======================================================================================================================
PROPERTIES PLACED IN SERVICE
The Company placed in service the following properties through the completion of
development or redevelopment during the year ended December 31, 1999:
- ----------------------------------------------------------------------------------------------------------------------
Date Placed # of Rentable Investment by
in Service Property Name Location Bldgs. Square Feet Company (a)
- ----------------------------------------------------------------------------------------------------------------------
OFFICE
8/09/99 2115 Linwood Avenue Fort Lee, Bergen County, NJ 1 68,000 $ 8,147
11/01/99 795 Folsom Street (d) San Francisco, San Francisco County, CA 1 183,445 37,337
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE PROPERTIES PLACED IN SERVICE: 2 251,445 $45,484
- ----------------------------------------------------------------------------------------------------------------------
OFFICE/FLEX
3/01/99 One Center Court Totowa, Passaic County, NJ 1 38,961 $ 2,140
9/17/99 12 Skyline Drive (e) Hawthorne, Westchester County, NY 1 46,850 5,023
12/10/99 600 West Avenue (e) Stamford, Fairfield County, CT 1 66,000 5,429
- ----------------------------------------------------------------------------------------------------------------------
TOTAL OFFICE/FLEX PROPERTIES PLACED IN SERVICE: 3 151,811 $12,592
- ----------------------------------------------------------------------------------------------------------------------
LAND LEASE
2/01/99 Horizon Center Business Park (f) Hamilton Township, Mercer County, NJ N/A 27.7 acres $ 1,007
- ----------------------------------------------------------------------------------------------------------------------
TOTAL LAND LEASE TRANSACTIONS: 27.7 acres $ 1,007
- ----------------------------------------------------------------------------------------------------------------------
TOTAL PROPERTIES PLACED IN SERVICE: 5 403,256 $59,083
======================================================================================================================
(a) Transactions were funded primarily through draws on the Company's revolving
credit facilities.
(b) William L. Mack, Chairman of the Board of Directors of the Company and an
equity holder in the Operating Partnership, was an indirect owner of an
interest in certain of the buildings contained in the Pacifica portfolio.
(c) The properties were acquired through the exercise of a purchase option
obtained in the initial acquisition of the McGarvey portfolio in January
1998.
(d) On June 1, 1999, the building was acquired for redevelopment for
approximately $34,282.
(e) The Company purchased the land on which this property was constructed, from
an entity whose principals include Timothy M. Jones, Martin S. Berger and
Robert F. Weinberg, each of whom are affiliated with the Company as the
President of the Company, a current member of the Board of Directors and a
former member of the Board of Directors of the Company, respectively.
(f) On February 1, 1999, the Company entered into a ground lease agreement to
lease 27.7 acres of developable land located at the Company's Horizon
Center Business Park, located in Hamilton Township, Mercer County, New
Jersey on which Home Depot constructed a 134,000 square-foot retail store.
71
LAND ACQUISITIONS
On February 26, 1999, the Company acquired approximately 2.3 acres of vacant
land adjacent to one of the Company's operating properties located in San
Antonio, Bexar County, Texas for approximately $1,524, which was made available
from the Company's cash reserves.
On March 2, 1999, the Company entered into a joint venture agreement with SJP
Vaughn Drive, L.L.C. Under the agreement, the Company has agreed to contribute
its vacant land at Three Vaughn Drive, Princeton, Mercer County, New Jersey,
subject to satisfaction of certain conditions, for an equity interest in the
venture.
On March 15, 1999, the Company entered into a joint venture with SJP 106 Allen
Road, L.L.C. to form MC-SJP Pinson Development, LLC, which acquired vacant land
located in Bernards Township, Somerset County, New Jersey. The joint venture
subsequently completed construction and placed in service a 132,010 square-foot
office building on this site (see "2000 Transactions - Properties Placed in
Service"). The Company accounts for the joint venture on a consolidated basis.
On August 31, 1999, the Company acquired, from an entity whose principals
include Brant Cali, a former executive officer of the Company and a former
member of the Board of Directors of the Company, and certain immediate family
members of John J. Cali, Chairman Emeritus of the Board of Directors of the
Company, approximately 28.1 acres of developable land adjacent to two of the
Company's operating properties located in Roseland, Essex County, New Jersey for
approximately $6,097. The acquisition was funded with cash and the issuance of
121,624 common units to the seller. The Company has commenced construction of a
220,000 square-foot office building on the acquired land.
In August 1999, the Company entered into an agreement with SJP Properties which
provides a cooperative effort in seeking approvals to develop up to
approximately 1.8 million square feet of office development on certain vacant
land owned or controlled, respectively, by the Company and SJP Properties, in
Hanover and Parsippany, Morris County, New Jersey. The agreement provides that
the parties shall share equally in the costs associated with seeking such
requisite approvals. Subsequent to obtaining the requisite approvals, upon
mutual consent, the Company and SJP Properties may enter into one or more joint
ventures to construct on the vacant land, or seek to dispose of their respective
vacant land parcels subject to the agreement.
PROPERTY SALES
The Company sold the following properties during the year ended December 31,
1999:
- ------------ --------------------------- ---------------------------- -------- ------------ ---------- ---------- ---------
SALE # OF RENTABLE NET SALES NET BOOK GAIN/
DATE PROPERTY NAME LOCATION BLDGS. SQUARE FEET PROCEEDS VALUE (LOSS)
- ------------ --------------------------- ---------------------------- -------- ------------ ---------- ---------- ---------
OFFICE:
11/15/99 400 Alexander Road Princeton, Mercer County, NJ 1 70,550 $8,628 $6,573 $2,055
12/15/99 Beardsley Corporate Center Phoenix, Maricopa County, AZ 1 119,301 8,772 8,870 (98)
- ------------ --------------------------- ---------------------------- -------- ------------ ---------- ---------- ---------
TOTALS: 2 189,851 $17,400 $15,443 $1,957
===================================================================== ======== ============ ========== ========== =========
4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
PRU-BETA 3 (NINE CAMPUS DRIVE)
On March 27, 1998, the Company acquired a 50 percent interest in an existing
joint venture with The Prudential Insurance Company of America ("Prudential"),
known as Pru-Beta 3, which owns and operates Nine Campus Drive, a 156,495
square-foot office building, located in the Mack-Cali Business Campus (formerly
Prudential Business Campus) office complex in Parsippany, Morris County, New
Jersey. The Company performs management and leasing services for the property
owned by the joint venture and recognized $140, $149 and $114 in fees for such
services in the years ended December 31, 2000, 1999 and 1998, respectively.
72
HPMC
On April 23, 1998, the Company entered into a joint venture agreement with HCG
Development, L.L.C. and Summit Partners I, L.L.C. to form HPMC Development
Partners, L.P. and, on July 21, 1998, entered into a second joint venture, HPMC
Development Partners II, L.P. (formerly known as HPMC Lava Ridge Partners,
L.P.), with these same parties. HPMC Development Partners, L.P.'s efforts have
focused on two development projects, commonly referred to as Continental Grand
II and Summit Ridge. HPMC Development Partners II, L.P.'s efforts have focused
on three development projects, commonly referred to as Lava Ridge, Peninsula
Gateway and Stadium Gateway. Among other things, the partnership agreements
provide for a preferred return on the Company's invested capital in each
venture, in addition to 50 percent of such venture's profit above the preferred
returns, as defined in each agreement.
CONTINENTAL GRAND II
Continental Grand II is a 239,085 square-foot office building located in El
Segundo, Los Angeles County, California, which was constructed and placed in
service by the venture.
SUMMIT RIDGE
Summit Ridge is an office complex of three one-story buildings aggregating
133,841 square feet located in San Diego, San Diego County, California, which
was constructed and placed in service by the venture. In January 2001, the
venture sold the office complex for approximately $17,450.
LAVA RIDGE
Lava Ridge is an office complex of three two-story buildings aggregating
183,200 square feet located in Roseville, Placer County, California, which
was constructed and placed in service by the venture.
PENINSULA GATEWAY
Peninsula Gateway is a parcel of land purchased from the city of Daly City,
located in San Mateo County, California, upon which the venture has commenced
construction of an office building and theater and retail complex aggregating
471,379 square feet.
STADIUM GATEWAY
Stadium Gateway is a 1.5 acre site located in Anaheim, Orange County,
California, acquired by the venture upon which it has commenced construction
of a six-story 261,554 square-foot office building.
G&G MARTCO (CONVENTION PLAZA)
On April 30, 1998, the Company acquired a 49.9 percent interest in an existing
joint venture, known as G&G Martco, which owns Convention Plaza, a 305,618
square-foot office building, located in San Francisco, San Francisco County,
California. A portion of its initial investment was financed through the
issuance of common units, as well as funds drawn from the Company's credit
facilities. Subsequently, on June 4, 1999, the Company acquired an additional
0.1 percent interest in G&G Martco through the issuance of common units (see
Note 11). The Company performs management and leasing services for the property
owned by the joint venture and recognized $231, $225 and $20 in fees for such
services in the years ended December 31, 2000, 1999 and 1998, respectively.
AMERICAN FINANCIAL EXCHANGE L.L.C.
On May 20, 1998, the Company entered into a joint venture agreement with
Columbia Development Company, L.L.C. to form American Financial Exchange L.L.C.
The venture was initially formed to acquire land for future development, located
on the Hudson River waterfront in Jersey City, Hudson County, New Jersey,
adjacent to the Company's Harborside Financial Center office complex. The
Company holds a 50 percent interest in the joint venture. Among other things,
the partnership agreement provides for a preferred return on the Company's
invested capital in the venture, in addition to the Company's proportionate
share of the venture's profit, as defined in the agreement. The joint venture
acquired land on which it constructed a parking facility, which is currently
leased to a parking operator under a 10-year agreement. Such parking facility
serves a ferry service between the Company's Harborside property and Manhattan.
In the fourth quarter 2000, the Company started construction of a 575,000
square-foot office building and terminated the parking agreement on certain of
the land owned by the venture. The total costs of the project are currently
projected to be approximately $140,000. The project, which is currently 100
percent pre-leased, is anticipated to be completed in third quarter 2002.
73
RAMLAND REALTY ASSOCIATES L.L.C. (ONE RAMLAND ROAD)
On August 20, 1998, the Company entered into a joint venture agreement with S.B.
New York Realty Corp. to form Ramland Realty Associates L.L.C. The venture was
formed to own, manage and operate One Ramland Road, a 232,000 square-foot
office/flex building plus adjacent developable land, located in Orangeburg,
Rockland County, New York. In August 1999, the joint venture completed
redevelopment of the property and placed the office/flex building in service.
The Company holds a 50 percent interest in the joint venture. The Company
performs management, leasing and other services for the property owned by the
joint venture and recognized $198, $628 and $0 in fees for such services in the
years ended December 31, 2000, 1999 and 1998, respectively.
ASHFORD LOOP ASSOCIATES L.P. (1001 SOUTH DAIRY ASHFORD/2100 WEST LOOP SOUTH)
On September 18, 1998, the Company entered into a joint venture agreement with
Prudential to form Ashford Loop Associates L.P. The venture was formed to own,
manage and operate 1001 South Dairy Ashford, a 130,000 square-foot office
building acquired on September 18, 1998 and 2100 West Loop South, a 168,000
square-foot office building acquired on November 25, 1998, both located in
Houston, Harris County, Texas. The Company holds a 20 percent interest in the
joint venture. The joint venture may be required to pay additional consideration
due to earn-out provisions in the acquisition contracts. Subsequently, through
December 31, 2000, the venture paid $19,714 ($3,943 representing the Company's
share) in accordance with earn-out provisions in the acquisition contracts. The
Company performs management and leasing services for the properties owned by the
joint venture and recognized $172, $117 and $30 in fees for such services in the
years ended December 31, 2000, 1999 and 1998, respectively.
ARCAP INVESTORS, L.L.C.
On March 18, 1999, the Company invested in ARCap Investors, L.L.C., a joint
venture with several participants, which was formed to invest in sub-investment
grade tranches of commercial mortgage-backed securities ("CMBS"). The Company
has invested $20,000 in the venture. William L. Mack, Chairman of the Board of
Directors of the Company and an equity holder in the Operating Partnership, is a
principal of the managing member of the venture. At December 31, 2000, the
venture held approximately $575,621 face value of CMBS bonds at an aggregate
cost of $280,982.
SOUTH PIER AT HARBORSIDE HOTEL DEVELOPMENT
On November 17, 1999, the Company entered into an agreement with Hyatt
Corporation to develop a 350-room hotel on the Company's South Pier at
Harborside Financial Center, Jersey City, Hudson County, New Jersey. In July
2000, the joint venture began development of the hotel project.
NORTH PIER AT HARBORSIDE RESIDENTIAL DEVELOPMENT
On August 5, 1999, the Company entered into an agreement which, upon
satisfaction of certain conditions, provides for the contribution of its North
Pier at Harborside Financial Center, Jersey City, Hudson County, New Jersey to a
joint venture with Lincoln Property Company Southwest, Inc., in exchange for
cash and an equity interest in the venture. The venture intends to develop
residential housing on the property.
74
SUMMARIES OF UNCONSOLIDATED JOINT VENTURES
The following is a summary of the financial position of the unconsolidated joint
ventures in which the Company had investment interests as of December 31, 2000
and 1999:
December 31, 2000
----------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Rental property, net $20,810 $ 78,119 $ 10,589 $13,309 $38,497 $37,777 $ -- $199,101
Other assets 2,690 27,082 2,418 11,851 9,729 900 310,342 365,012
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $23,500 $105,201 $ 13,007 $25,160 $48,226 $38,677 $310,342 $564,113
==============================================================================================================================
LIABILITIES AND PARTNERS'/
MEMBERS' CAPITAL:
Mortgages and loans payable $ -- $ 63,486 $ 50,000 $ -- $33,966 $ -- $129,562 $277,014
Other liabilities 160 5,035 1,392 9,400 1,785 1,027 3,750 22,549
Partners'/members' capital 23,340 36,680 (38,385) 15,760 12,475 37,650 177,030 264,550
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
partners'/members' capital $23,500 $ 105,201 $ 13,007 $25,160 $48,226 $38,677 $310,342 $564,113
==============================================================================================================================
Company's net investment
in unconsolidated
joint ventures $16,110 $ 35,079 $ 3,973 $15,809 $ 2,782 $ 7,874 $ 19,811 $ 101,438
- ------------------------------------------------------------------------------------------------------------------------------
December 31, 1999
----------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Rental property, net $21,817 $72,148 $ 11,552 $10,695 $19,549 $31,476 $ -- $167,237
Other assets 3,319 6,427 2,571 773 5,069 768 239,441 258,368
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $25,136 $78,575 $ 14,123 $11,468 $24,618 $32,244 $239,441 $425,605
==============================================================================================================================
LIABILITIES AND PARTNERS'/
MEMBERS' CAPITAL:
Mortgages and loans payable $ -- $41,274 $ 43,081 $ -- $17,300 $ -- $108,407 $210,062
Other liabilities 186 7,254 1,383 2 1,263 3,536 36,109 49,733
Partners'/members' capital 24,950 30,047 (30,341) 11,466 6,055 28,708 94,925 165,810
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
partners'/members' capital $25,136 $78,575 $ 14,123 $11,468 $24,618 $32,244 $239,441 $425,605
==============================================================================================================================
Company's net investment
in unconsolidated
joint ventures $17,072 $23,337 $ 8,352 $11,571 $ 2,697 $ 6,073 $ 20,032 $ 89,134
- ------------------------------------------------------------------------------------------------------------------------------
75
The following is a summary of the results of operations of the unconsolidated
joint ventures for the period in which the Company had investment interests
during the years ended December 31, 2000, 1999 and 1998:
Year Ended December 31, 2000
----------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 5,028 $ 9,254 $10,695 $1,009 $ 3,917 $ 5,917 $19,931 $ 55,751
Operating and other expenses (1,619) (2,628) (3,312) (155) (1,030) (2,773) (3,060) (14,577)
Depreciation and amortization (1,226) (5,908) (1,531) (62) (975) (839) -- (10,541)
Interest expense -- (4,535) (4,084) -- (1,547) -- (5,045) (15,211)
- ------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 2,183 $ (3,817) $ 1,768 $ 792 $ 365 $ 2,305 $11,826 $ 15,422
==============================================================================================================================
Company's equity in earnings
of unconsolidated
joint ventures $ 935 $ 3,248 $ 483 $ 735 $ 180 $ 474 $ 2,000 $ 8,055
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999
----------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 4,938 $ 459 $ 9,011 $ 917 $1,426 $ 4,162 $ 10,093 $ 31,006
Operating and other expenses (1,505) (104) (3,238) (287) (352) (2,327) (3,774) (11,587)
Depreciation and amortization (1,234) (100) (1,422) (96) (439) (551) -- (3,842)
Interest expense -- (119) (3,116) -- (45) -- (2,185) (5,465)
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 2,199 $ 136 $ 1,235 $ 534 $ 590 $ 1,284 $ 4,134 $ 10,112
==============================================================================================================================
Company's equity in earnings
(loss) of unconsolidated
joint ventures $ 827 -- $ (366) $ 541 $ 298 $ 233 $ 1,060 $ 2,593
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998
----------------------------------------------------------------------------------------------
American
G&G Financial Ramland Ashford Combined
Pru-Beta 3 HPMC Martco Exchange Realty Loop ARCap Total
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 3,544 -- $ 7,320 $490 -- $ 603 -- $ 11,957
Operating and other expenses (1,124) -- (2,955) (35) -- (287) -- (4,401)
Depreciation and amortization (1,000) -- (759) (50) -- (76) -- (1,885)
Interest expense -- -- (3,495) -- -- -- -- (3,495)
- ------------------------------------------------------------------------------------------------------------------------------
Net income $ 1,420 -- $ 111 $405 -- $ 240 -- $ 2,176
==============================================================================================================================
Company's equity in earnings
(loss) of unconsolidated
joint ventures $ 723 -- $ (182) $455 -- $ 59 -- $ 1,055
- ------------------------------------------------------------------------------------------------------------------------------
5. DEFERRED CHARGES AND OTHER ASSETS
December 31,
2000 1999
- --------------------------------------------------------------------------------------------------------------
Deferred leasing costs $ 80,667 $62,076
Deferred financing costs 23,085 16,690
- --------------------------------------------------------------------------------------------------------------
103,752 78,766
Accumulated amortization (26,303) (20,197)
- --------------------------------------------------------------------------------------------------------------
Deferred charges, net 77,449 58,569
Prepaid expenses and other assets 25,206 7,867
- --------------------------------------------------------------------------------------------------------------
Total deferred charges and other assets, net $ 102,655 $66,436
==============================================================================================================
76
6. RESTRICTED CASH
Restricted cash includes security deposits for the Company's residential
properties and certain commercial properties, and escrow and reserve funds for
debt service, real estate taxes, property insurance, capital improvements,
tenant improvements, and leasing costs established pursuant to certain mortgage
financing arrangements, and is comprised of the following:
December 31,
2000 1999
- --------------------------------------------------------------------------------------------------------------
Security deposits $ 6,477 $ 6,021
Escrow and other reserve funds 80 1,060
- --------------------------------------------------------------------------------------------------------------
Total restricted cash $ 6,557 $ 7,081
==============================================================================================================
7. RENTAL PROPERTY HELD FOR SALE
As of December 31, 2000, included in total rental property are 10 office
properties that the Company has identified as held for sale. These properties
have an aggregate carrying value of $107,458 and $107,264 as of December 31,
2000 and 1999, respectively, and are located in San Antonio, Bexar County,
Texas or Houston, Harris County, Texas.
As of December 31, 1999, included in total rental property were three office
properties that the Company had identified as held for sale. The three office
properties have an aggregate carrying value of $77,783 as of December 31, 1999
and are located in Omaha, Douglas County, Nebraska; Jersey City, Hudson County,
New Jersey or Amarillo, Potter County, Texas. The office properties located in
Jersey City, Hudson County, New Jersey and Amarillo, Potter County, Texas were
sold in April 2000 in two separate transactions and the property located in
Omaha, Douglas County, Nebraska was sold in November 2000. See Note 3.
The following is a summary of the condensed results of operations of the rental
properties held for sale at December 31, 2000 for the years ended December 31,
2000, 1999 and 1998:
Years Ended December 31,
2000 1999 1998
- -------------------------------------------------------------------------------------------------------------
Total revenues $ 26,069 $ 24,181 $ 23,856
Operating and other expenses (13,227) (12,589) (11,391)
Depreciation and amortization (2,380) (2,732) (2,397)
- -------------------------------------------------------------------------------------------------------------
Net income $ 10,462 $ 8,860 $ 10,068
=============================================================================================================
There can be no assurance if and when sales of the Company's rental properties
held for sale will occur.
8. SENIOR UNSECURED NOTES
On March 16, 1999, the Operating Partnership issued $600,000 face amount of
senior unsecured notes with interest payable semi-annually in arrears. The total
proceeds from the issuance (net of selling commissions and discount) of
approximately $593,500 were used to pay down outstanding borrowings under the
Unsecured Facility, as defined in Note 9, and to pay off certain mortgage loans.
The senior unsecured notes were issued at a discount of approximately $2,748,
which is being amortized over the terms of the respective tranches as an
adjustment to interest expense.
On August 2, 1999, the Operating Partnership issued $185,283 of senior unsecured
notes with interest payable monthly in arrears. The proceeds from the issuance
were used to retire an equivalent amount of a non-recourse mortgage loan.
77
On December 21, 2000, the Operating Partnership issued $15,000 of senior
unsecured notes with interest payable semi-annually in arrears. The total
proceeds from the issuance (net of selling commissions) of approximately $14,907
were used primarily to pay down outstanding borrowings under the Prudential
Facility, as defined in Note 9.
The Operating Partnership's total senior unsecured notes (collectively, "Senior
Unsecured Notes") are redeemable at any time at the option of the Company,
subject to certain conditions including yield maintenance.
A summary of the terms of the Senior Unsecured Notes outstanding as of December
31, 2000 and 1999 is as follows:
December 31, Effective
2000 1999 Rate (1)
- -----------------------------------------------------------------------------------------------------------------
7.180% Senior Unsecured Notes, due December 31, 2003 $185,283 $185,283 7.23%
7.000% Senior Unsecured Notes, due March 15, 2004 299,744 299,665 7.27%
7.250% Senior Unsecured Notes, due March 15, 2009 298,072 297,837 7.49%
7.835% Senior Unsecured Notes, due December 15, 2010 15,000 -- 7.92%
- -----------------------------------------------------------------------------------------------------------------
Total Senior Unsecured Notes $798,099 $782,785 7.35%
=================================================================================================================
(1) Includes the cost of terminated treasury lock agreements (if any), offering
and other transaction costs and the discount on the notes, as applicable.
In January 2001, the Operating Partnership issued $300,000 face amount of 7.75
percent senior unsecured notes due February 15, 2011 with interest payable
semi-annually in arrears. The total proceeds from the issuance (net of selling
commissions and discount) of approximately $296,300 were used to pay down
outstanding borrowings under the 2000 Unsecured Facility, as defined in Note 9.
The senior unsecured notes were issued at a discount of approximately $1,731,
which will be amortized over the term as an adjustment to interest expense.
The terms of the Senior Unsecured Notes include certain restrictions and
covenants which require compliance with financial ratios relating to the maximum
amount of debt leverage, the maximum amount of secured indebtedness, the minimum
amount of debt service coverage and the maximum amount of unsecured debt as a
percent of unsecured assets.
9. REVOLVING CREDIT FACILITIES
2000 UNSECURED FACILITY
On June 22, 2000, the Company obtained an unsecured revolving credit facility
("2000 Unsecured Facility") with a current borrowing capacity of $800,000 from a
group of 24 lenders. The interest rate on outstanding borrowings under the
credit line is currently the London Inter-Bank Offered Rate ("LIBOR") (6.56
percent at December 31, 2000) plus 80 basis points. The Company may instead
elect an interest rate representing the higher of the lender's prime rate or the
Federal Funds rate plus 50 basis points. The 2000 Unsecured Facility also
requires a 20 basis point facility fee on the current borrowing capacity payable
quarterly in arrears. In the event of a change in the Company's unsecured debt
rating, the interest rate and facility fee will be changed on a sliding scale.
Subject to certain conditions, the Company has the ability to increase the
borrowing capacity of the credit line up to $1,000,000. The 2000 Unsecured
Facility matures in June 2003, with an extension option of one year, which would
require a payment of 25 basis points of the then borrowing capacity of the
credit line upon exercise.
The terms of the 2000 Unsecured Facility include certain restrictions and
covenants which limit, among other things the payment of dividends (as discussed
below), the incurrence of additional indebtedness, the incurrence of liens and
the disposition of assets, and which require compliance with financial ratios
relating to the maximum leverage ratio, the maximum amount of secured
indebtedness, the minimum amount of tangible net worth, the minimum amount of
debt service coverage, the minimum amount of fixed charge coverage, the maximum
amount of unsecured indebtedness, the minimum amount of unencumbered property
debt service coverage and certain investment limitations. The dividend
restriction referred to above provides that, except to enable the Company to
continue to qualify as a REIT under the Code, the Company will not during any
four consecutive fiscal quarters make distributions with respect to common stock
or other equity interests in an aggregate amount in excess of 90 percent of
funds from operations (as defined) for such period, subject to certain other
adjustments.
78
The lending group for the 2000 Unsecured Facility consists of: Chase Manhattan
Bank, as administrative agent; Fleet National Bank, as syndication agent; Bank
of America, N.A., as documentation agent; Bank One, NA, Commerzbank
Aktiengesellschaft and First Union National Bank, as senior managing agents; PNC
Bank, N.A., as managing agent; Bank Austria Creditanstalt Corporate Finance,
Inc., Bayerische Hypo-und Vereinsbank AG, Dresdner Bank AG, Societe Generale,
Summit Bank and Wells Fargo Bank, N.A., as co-agents; and Bayerische Landesbank
Girozentrale; Citizens Bank of Massachusetts; European American Bank; Chevy
Chase Bank; Citicorp Real Estate, Inc.; DG Bank Deutsche Genossenschaftsbank,
AG; Erste Bank; KBC Bank N.V.; SunTrust Bank; Bank Leumi USA and Israel Discount
Bank of New York.
In conjunction with obtaining the 2000 Unsecured Facility, the Company drew
funds on the new facility to repay in full and terminate the Unsecured Facility,
as defined below.
UNSECURED FACILITY
The Company had an unsecured revolving credit facility ("Unsecured Facility")
with a borrowing capacity of $1,000,000 from a group of 28 lenders. The interest
rate was based on the Company's achievement of investment grade unsecured debt
ratings and, at the Company's election, bore interest at either 90 basis points
over LIBOR or the higher of the lender's prime rate or the Federal Funds rate
plus 50 basis points. In conjunction with obtaining the 2000 Unsecured Facility,
the Company repaid in full and terminated the Unsecured Facility on June 22,
2000.
ORIGINAL UNSECURED FACILITY
The Original Unsecured Facility ("Original Unsecured Facility") was repaid in
full and retired in connection with the Company obtaining the Unsecured Facility
in April 1998. On account of prepayment fees, loan origination fees, legal fees,
and other costs incurred in the retirement of the Original Unsecured Facility,
an extraordinary loss of $2,203, net of minority interest's share of the loss
($275), was recorded for the year ended December 31, 1998.
PRUDENTIAL FACILITY
The Company has a revolving credit facility ("Prudential Facility") with
Prudential Securities Corp. ("PSC") in the amount of $100,000, which currently
bears interest at 110 basis points over one-month LIBOR, with a maturity date of
June 29, 2001. The Prudential Facility is a recourse liability of the Operating
Partnership and is secured by the Company's equity interest in Harborside Plazas
2 and 3. The Prudential Facility limits the ability of the Operating Partnership
to make any distributions during any fiscal quarter in an amount in excess of
100 percent of the Operating Partnership's available funds from operations (as
defined) for the immediately preceding fiscal quarter (except to the extent such
excess distributions or dividends are attributable to gains from the sale of the
Operating Partnership's assets or are required for the Company to maintain its
status as a REIT under the Code); provided, however, that the Operating
Partnership may make distributions and pay dividends in excess of 100 percent of
available funds from operations (as defined) for the preceding fiscal quarter
for not more than three consecutive quarters. In addition to the foregoing, the
Prudential Facility limits the liens placed upon the subject property and
certain collateral, the use of proceeds from the Prudential Facility, and the
maintenance of ownership of the subject property and assets derived from said
ownership. The Company has been notified that the Prudential Facility will not
be renewed.
SUMMARY
As of December 31, 2000 and 1999, the Company had outstanding borrowings of
$348,840 and $177,000, respectively, under its revolving credit facilities (with
aggregate borrowing capacity of $900,000 and $1,100,000, respectively). The
total outstanding borrowings were from the 2000 Unsecured Facility at December
31, 2000 and from the Unsecured Facility at December 31, 1999, with no
outstanding borrowings under the Prudential Facility.
79
10. MORTGAGES AND LOANS PAYABLE
The Company has mortgages and loans payable which are comprised of various
loans collateralized by certain of the Company's rental properties. Payments
on mortgages and loans payable are generally due in monthly installments of
principal and interest, or interest only.
A summary of the Company's mortgages and loans payable as of December 31, 2000
and 1999 is as follows:
EFFECTIVE PRINCIPAL BALANCE AT
INTEREST DECEMBER 31,
PROPERTY NAME LENDER RATE 2000 1999 MATURITY
- ------------------------------------------------------------------------------------------------------------------------
201 Commerce Drive Sun Life Assurance Co. 6.240% $ -- $ 1,059 09/01/00
3 & 5 Terri Lane First Union National Bank 6.220% -- 4,434 10/31/00
101 & 225 Executive Drive Sun Life Assurance Co. 6.270% 2,198 2,375 06/01/01
Mack-Cali Morris Plains Corestates Bank 7.510% 2,169 2,235 12/31/01
Mack-Cali Willowbrook CIGNA 8.670% 9,460 10,250 10/01/03
400 Chestnut Ridge Prudential Insurance Co. 9.440% 13,588 14,446 07/01/04
Mack-Cali Centre VI Principal Life Insurance Co. 6.865% 35,000 35,000 04/01/05
Various (a) Prudential Insurance Co. 7.100% 150,000 150,000 05/15/05
Mack-Cali Bridgewater I New York Life Ins. Co. 7.000% 23,000 23,000 09/10/05
Mack-Cali Woodbridge II New York Life Ins. Co. 7.500% 17,500 17,500 09/10/05
Mack-Cali Short Hills Prudential Insurance Co. 7.740% 25,911 26,604 10/01/05
500 West Putnam Avenue New York Life Ins. Co. 6.520% 10,069 10,784 10/10/05
Harborside - Plaza 1 U.S. West Pension Trust 5.610% 54,370 51,015 01/01/06
Harborside - Plazas 2 and 3 Northwestern/Principal 7.320% 95,630 98,985 01/01/06
Mack-Cali Airport Allstate Life Insurance Co. 7.050% 10,500 10,500 04/01/07
Kemble Plaza II Mitsubishi Tr & Bk Co. LIBOR+0.65% -- 40,025 01/31/08
Kemble Plaza I Mitsubishi Tr & Bk Co. LIBOR+0.65% 32,178 32,178 01/31/09
- ------------------------------------------------------------------------------------------------------------------------
Total Property Mortgages $481,573 $530,390
========================================================================================================================
(a) The Company has the option to convert the mortgage loan, which is secured by
11 properties, to unsecured debt.
INTEREST RATE CONTRACTS
On November 20, 1997, the Company entered into a forward treasury rate lock
agreement with a commercial bank. The agreement locked an interest rate of 5.88
percent per annum for the interpolated seven-year U.S. Treasury Note effective
March 1, 1998, on a notional amount of $150,000. The agreement was used to fix
the interest rate on the $150,000 Prudential Mortgage Loan. On March 2, 1998,
the Company paid $2,035 in settlement of the agreement, which is being amortized
to interest expense over the term of the $150,000 Prudential Mortgage Loan.
80
On October 1, 1998, the Company entered into a forward treasury rate lock
agreement with a commercial bank. The agreement locked an interest rate of 4.089
percent per annum for the three-year U.S. Treasury Note effective November 4,
1999, on a notional amount of $50,000. The agreement was used to fix the Index
Rate on $50,000 of the Harborside-Plaza 1 mortgage, for which the interest rate
was re-set to the three-year U.S. Treasury Note (5.82 percent) plus 110 basis
points for the three years beginning November 4, 1999 (see "Property Mortgages:
Harborside-Plaza 1"). The Company received $2,208 in settlement of the
agreement, which is being amortized to interest expense over the three
year-period.
SCHEDULED PRINCIPAL PAYMENTS
Scheduled principal payments and related weighted average annual interest rates
for the Company's Senior Unsecured Notes, revolving credit facilities and
mortgages and loans payable as of December 31, 2000 are as follows:
WEIGHTED AVG.
SCHEDULED PRINCIPAL INTEREST RATE OF
YEAR AMORTIZATION MATURITIES TOTAL FUTURE REPAYMENTS (a)
- -------------------------------------------------------------------------------------------------------------------
2001 $ 3,239 $ 4,211 $ 7,450 7.43%
2002 3,433 -- 3,433 8.20%
2003 3,581 540,934 544,515 7.44%
2004 2,420 309,863 312,283 7.34%
2005 1,584 253,178 254,762 7.13%
Thereafter (473) 506,542 506,069 7.38%
- -------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average $ 13,784 $ 1,614,728 $ 1,628,512 7.29%
===================================================================================================================
(a) Assumes weighted average LIBOR at December 31, 2000 of 6.73 percent in
calculating revolving credit facility and other variable rate debt interest
rates.
CASH PAID FOR INTEREST AND INTEREST CAPITALIZED
Cash paid for interest for the years ended December 31, 2000, 1999 and 1998 was
$112,157, $91,883 and $92,441, respectively. Interest capitalized by the Company
for the years ended December 31, 2000, 1999 and 1998 was $11,524, $6,840 and
$3,547, respectively.
SUMMARY OF INDEBTEDNESS
As of December 31, 2000, the Company's total indebtedness of $1,628,512
(weighted average interest rate of 7.29 percent) was comprised of $381,018 of
revolving credit facility borrowings and other variable rate mortgage debt
(weighted average rate of 7.53 percent) and fixed rate debt of $1,247,494
(weighted average rate of 7.25 percent).
As of December 31, 1999, the Company's total indebtedness of $1,490,175
(weighted average interest rate of 7.27 percent) was comprised of $249,204 of
revolving credit facility borrowings and other variable rate mortgage debt
(weighted average rate of 7.42 percent) and fixed rate debt of $1,240,971
(weighted average rate of 7.24 percent).
11. MINORITY INTERESTS
Minority interests in the accompanying consolidated financial statements relate
to (i) preferred units in the Operating Partnership ("Preferred Units"), common
units in the Operating Partnership and warrants to purchase common units ("Unit
Warrants"), held by parties other than the Company, and (ii) interests in
consolidated partially-owned properties for the portion of such properties not
owned by the Company.
81
OPERATING PARTNERSHIP
PREFERRED UNITS
At January 1, 1999, the Company had 27,132 Series A Preferred Units and 223,124
Series B Preferred Units outstanding.
The Preferred Units have a stated value of $1,000 per unit and are preferred as
to assets over any class of common units or other class of preferred units of
the Company, based on circumstances per the applicable unit certificates. The
quarterly distribution on each Preferred Unit is an amount equal to the greater
of (i) $16.875 (representing 6.75 percent of the Preferred Unit stated value of
an annualized basis) or (ii) the quarterly distribution attributable to a
Preferred Unit determined as if such unit had been converted into common units,
subject to adjustment for customary anti-dilution rights. Each of the Preferred
Units may be converted at any time into common units at a conversion price of
$34.65 per unit. Common units received pursuant to such conversion may be
redeemed for an equal number of shares of common stock.
During the year ended December 31, 1999, 20,952 Series A Preferred Units were
converted into 604,675 common units. During the year ended December 31, 2000,
6,180 Series A Preferred Units and 2,784 Series B Preferred Units were converted
into 258,702 common units.
As of December 31, 2000, there were 220,340 Series B Preferred Units outstanding
(convertible into 6,359,019 common units). There were no Series A Preferred
Units outstanding as of December 31, 2000.
COMMON UNITS
At January 1, 1999, the Company had 9,086,585 common units outstanding.
Certain individuals and entities own common units in the Operating Partnership.
A common unit and a share of common stock of the Company have substantially the
same economic characteristics in as much as they effectively share equally in
the net income or loss of the Operating Partnership. Common units are redeemable
by the common unitholders at their option, subject to certain restrictions, on
the basis of one common unit for either one share of common stock or cash equal
to the fair market value of a share at the time of the redemption. The Company
has the option to deliver shares of common stock in exchange for all or any
portion of the cash requested. When a unitholder redeems a common unit, minority
interest in the Operating Partnership is reduced and the Company's investment in
the Operating Partnership is increased.
During the year ended December 31, 1999, the Company issued an aggregate of
122,062 common units in connection with two separate transactions, valued at
approximately $3,362. During the year ended December 31, 1999, the Company
issued 604,675 common units in connection with the conversion of 20,952
Preferred Units. During the year ended December 31, 1999, an aggregate of
1,934,657 common units were redeemed for an equivalent number of shares of
common stock in the Company. During the year ended December 31, 1999, the
Company also issued 275,046 common units, valued at approximately $8,141, in
connection with the achievement of certain performance goals at the Mack
Properties, as defined below, in redemption of an equivalent number of
contingent common units.
During the year ended December 31, 2000, the Company issued 258,702 common units
in connection with the conversion of 8,964 Preferred Units, and an aggregate of
448,688 common units were redeemed for an equivalent number of shares of common
stock in the Company.
As of December 31, 2000, there were 7,963,725 common units outstanding.
82
CONTINGENT COMMON AND PREFERRED UNITS
In connection with the Mack transaction in December 1997, 2,006,432 contingent
common units, 11,895 Series A contingent Preferred Units and 7,799 Series B
contingent Preferred Units were issued as contingent non-participating units
("Contingent Units"). Redemption of such Contingent Units occurred upon the
achievement of certain performance goals relating to certain of the Mack
properties ("Mack Properties"), specifically the achievement of certain leasing
activity. When Contingent Units were redeemed for common and Preferred Units, an
adjustment to the purchase price of certain of the Mack Properties was recorded,
based on the value of the units issued.
On account of certain of the performance goals at the Mack Properties having
been achieved during the year ended December 31, 1999, the Company redeemed
275,046 contingent common units and issued an equivalent number of common units,
as indicated above. There were no Contingent Units outstanding as of December
31, 1999.
UNIT WARRANTS
The Company has 2,000,000 Unit Warrants outstanding which enable the holders to
purchase an equal number of common units at $37.80 per unit. The Unit Warrants
are all currently exercisable and expire on December 11, 2002.
MINORITY INTEREST OWNERSHIP
As of December 31, 2000 and 1999, the minority interest common unitholders owned
12.3 percent (20.1 percent, including the effect of the conversion of Preferred
Units into common units) and 12.2 percent (20.2 percent including the effect of
the conversion of Preferred Units into common units) of the Operating
Partnership, respectively (excluding any effect for the exercise of Unit
Warrants).
PARTIALLY-OWNED PROPERTIES
On December 28, 1999, the Company sold an interest in six office properties
located in Parsippany, Morris County, New Jersey for $83,600. Amongst other
things, the operating agreements provided for a preferred return to the joint
venture members. On June 29, 2000 the Company acquired a 100 percent interest in
these properties and the Company paid an additional $836 to the minority
interest member in excess of its investment.
On August 24, 2000, MC-SJP Morris V Realty, LLC and MC-SJP Morris VI Realty, LLC
acquired land in which SJP Properties has a minority interest amounting to
$1,925.
The Company controlled these operations and has consolidated the financial
position and results of operations of partially-owned properties in the
financial statements of the Company. The equity interests of the other members
are reflected as minority interests: partially-owned properties in the
consolidated financial statements of the Company.
12. EMPLOYEE BENEFIT PLAN
All employees of the Company who meet certain minimum age and period of service
requirements are eligible to participate in a 401(k) defined contribution plan
(the "401(k) Plan"). The 401(k) Plan allows eligible employees to defer up to 15
percent of their annual compensation, subject to certain limitations imposed by
federal law. The amounts contributed by employees are immediately vested and
non-forfeitable. The Company, at management's discretion, may match employee
contributions and/or make discretionary contributions. Management has approved,
for the year ended December 31, 2001, a Company matching contribution to be paid
under the 401(k) Plan equal to 50 percent of the first 3.5 percent of annual
salary, as defined in the 401(k) Plan, contributed to the plan in 2001. Total
expense recognized by the Company for the years ended December 31, 2000, 1999
and 1998 was $0, $400 and $0, respectively.
13. DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of estimated fair value was determined by management
using available market information and appropriate valuation methodologies.
However, considerable judgement is necessary to interpret market data and
develop estimated fair value. Accordingly, the estimates presented herein are
not necessarily indicative of the amounts the Company could realize on
disposition of the financial instruments at December 31, 2000 and 1999. The use
of different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
83
Cash equivalents, receivables, accounts payable, and accrued expenses and other
liabilities are carried at amounts which reasonably approximate their fair
values as of December 31, 2000 and 1999.
The estimated fair value (excluding prepayment penalties) of the Senior
Unsecured Notes and mortgages and loans payable as of December 31, 2000
approximated the carrying values of $798,099 and $481,573, respectively, and
as of December 31, 1999 was approximately $741,824 and $511,281,
respectively, based upon then current interest rates for debt with similar
terms and remaining maturities. Revolving credit facility borrowings as of
December 31, 2000 and 1999 approximated the carrying values of $348,840 and
$177,000, respectively.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of December 31, 2000 and 1999. Although
management is not aware of any factors that would significantly affect the fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since December 31, 2000 and current estimates of
fair value may differ significantly from the amounts presented herein.
14. COMMITMENTS AND CONTINGENCIES
TAX ABATEMENT AGREEMENTS
HARBORSIDE FINANCIAL CENTER
Pursuant to an agreement with the City of Jersey City, New Jersey, the
Company is required to make payments in lieu of property taxes ("PILOT") on
its Harborside Plaza 2 and 3 properties. The agreement, which commenced in
1990, is for a term of 15 years. Such PILOT is equal to two percent of Total
Project Costs, as defined, in year one and increases by $75 per annum through
year 15. Total Project Costs, as defined, are $145,644. The PILOT totaled
$2,677, $2,620 and $2,570 for the years ended December 31, 2000, 1999 and
1998, respectively.
The Company has entered into a similar agreement with the City of Jersey
City, New Jersey on its Harborside Plaza 4-A property. Pursuant to the
agreement, such PILOT is equal to two percent of Total Project Costs, as
defined, which was estimated to be $45,497. The PILOT, based upon the
estimated Total Project Costs, was $25 for the in-service period of the
property during the year ended December 31, 2000.
GROUND LEASE AGREEMENTS
Future minimum rental payments under the terms of all non-cancelable ground
leases under which the Company is the lessee, as of December 31, 2000, are as
follows:
YEAR AMOUNT
- -------------------------------------------------------------------------------
2001 $ 531
2002 531
2003 531
2004 534
2005 534
Thereafter 21,997
- -------------------------------------------------------------------------------
Total $24,658
===============================================================================
Ground lease expense incurred during the years ended December 31, 2000, 1999 and
1998 amounted to $570, $561 and $419, respectively.
84
OTHER
On April 19, 1999, the Company announced the following changes in the membership
of its Board of Directors and the identities, titles and responsibilities of its
executive officers: (i) Thomas A. Rizk resigned from the Board of Directors, the
Executive Committee of the Board of Directors, his position as Chief Executive
Officer and as an employee of the Company; (ii) Mitchell E. Hersh was appointed
Chief Executive Officer of the Company simultaneous with his resignation from
his positions as President and Chief Operating Officer of the Company; (iii)
Timothy M. Jones was appointed President of the Company simultaneous with his
resignation from his positions as Executive Vice President and Chief Investment
Officer of the Company; and (iv) Brant Cali was appointed to the Board of
Directors of the Company to fill the remainder of Thomas A. Rizk's term as a
Class III Director and was appointed Chief Operating Officer of the Company,
also remaining as an Executive Vice President and Assistant Secretary of the
Company.
Pursuant to the terms of Mr. Rizk's employment agreement entered into with the
Company in December 1997 and an agreement entered into simultaneous with his
resigning from the Company, Mr. Rizk received payments of approximately $14,490
in April 1999 and $500 in April 2000 and will receive $500 annually over the
next two years. All costs associated with Mr. Rizk's resignation are included in
non-recurring charges for the year ended December 31, 1999.
On June 27, 2000, both Brant Cali and John R. Cali resigned their positions as
officers of the Company and Brant Cali resigned as a director of the Company.
John R. Cali was appointed to the Board of Directors of the Company to take the
seat previously held by Brant Cali. As required by Brant Cali and John R. Cali's
employment agreements with the Company: (i) the Company paid $2,820 and $2,806
(less applicable withholding) to Brant Cali and John R. Cali, respectively; (ii)
all options to acquire shares of the Company's common stock and Restricted Stock
Awards (as hereinafter defined) held by Brant Cali and John R. Cali became fully
vested on the effective date of their resignations from the Company. All costs
associated with Brant Cali and John R. Cali's resignations, which totaled
approximately $9,228, are included in non-recurring charges for the year ended
December 31, 2000.
The Company is a defendant in certain litigation arising in the normal course of
business activities. Management does not believe that the resolution of these
matters will have a materially adverse effect upon the Company.
15. TENANT LEASES
The Properties are leased to tenants under operating leases with various
expiration dates through 2016. Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the tenant's
proportionate share of and/or increases in real estate taxes and certain
operating costs, as defined, and the pass through of charges for electrical
usage.
Future minimum rentals to be received under non-cancelable operating leases at
December 31, 2000, are as follows:
YEAR AMOUNT
- -------------------------------------------------------------------------------
2001 $ 475,043
2002 440,153
2003 379,721
2004 326,091
2005 276,779
Thereafter 997,529
- -------------------------------------------------------------------------------
Total $2,895,316
===============================================================================
85
16. STOCKHOLDERS' EQUITY
To maintain its qualification as a REIT, not more than 50 percent in value of
the outstanding shares of the Company may be owned, directly or indirectly, by
five or fewer individuals at any time during the last half of any taxable year
of the Company, other than its initial taxable year (defined to include certain
entities), applying certain constructive ownership rules. To help ensure that
the Company will not fail this test, the Company's Articles of Incorporation
provide for, among other things, certain restrictions on the transfer of the
common stock to prevent further concentration of stock ownership. Moreover, to
evidence compliance with these requirements, the Company must maintain records
that disclose the actual ownership of its outstanding common stock and will
demand written statements each year from the holders of record of designated
percentages of its common stock requesting the disclosure of the beneficial
owners of such common stock.
COMMON STOCK REPURCHASES
On August 6, 1998, the Board of Directors of the Company authorized a share
repurchase program ("Repurchase Program") under which the Company was permitted
to purchase up to $100,000 of the Company's outstanding common stock. Purchases
could be made from time to time in open market transactions at prevailing prices
or through privately negotiated transactions. Under the Repurchase Program, the
Company purchased for constructive retirement 1,869,200 shares of its
outstanding common stock for an aggregate cost of approximately $52,562 from
August 1998 through December 1999.
On September 13, 2000, the Board of Directors authorized an increase to the
Repurchase Program under which the Company is permitted to purchase up to an
additional $150,000 of the Company's outstanding common stock above the $52,562
that had previously been purchased. The Company purchased for constructive
retirement 2,026,300 shares of its outstanding common stock for an aggregate
cost of approximately $55,514 from September 13, 2000 through December 31, 2000.
Subsequent to year end through February 15, 2001, the Company purchased for
constructive retirement 72,000 shares of its outstanding common stock for an
aggregate cost of approximately $1,982 under the Repurchase Program.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company filed a registration statement with the SEC for the Company's
dividend reinvestment and stock purchase plan ("Plan") which was declared
effective in February 1999. The Plan commenced on March 1, 1999.
During the year ended December 31, 1999, 1,082 shares were issued and proceeds
of approximately $32 were received from stock purchases and/or dividend
reinvestments under the Plan. The Company did not issue any shares under the
Plan during the year ended December 31, 2000.
SHAREHOLDER RIGHTS PLAN
On June 10, 1999, the Board of Directors of the Company authorized a dividend
distribution of one preferred share purchase right ("Right") for each
outstanding share of common stock which were distributed to all holders of
record of the common stock on July 6, 1999. Each Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of Series A
junior participating preferred stock, par value $0.01 per share ("Preferred
Shares"), at a price of $100.00 per one one-thousandth of a Preferred Share
("Purchase Price"), subject to adjustment as provided in the rights agreement.
The Rights expire on July 6, 2009, unless the expiration date is extended or the
Right is redeemed or exchanged earlier by the Company.
86
The Rights are attached to each share of common stock. The Rights are generally
exercisable only if a person or group becomes the beneficial owner of 15 percent
or more of the outstanding common stock or announces a tender offer for 15
percent or more of the outstanding common stock ("Acquiring Person"). In the
event that a person or group becomes an Acquiring Person, each holder of a Right
will have the right to receive, upon exercise, common stock having a market
value equal to two times the Purchase Price of the Right.
On June 27, 2000, the Company amended its shareholder rights plan to prevent the
triggering of such plan as a result of the Merger Agreement.
STOCK OPTION PLANS
In September 2000, the Company established the 2000 Employee Stock Option Plan
("2000 Employee Plan") and the 2000 Director Stock Option Plan ("2000 Director
Plan") under which a total of 2,700,000 shares (subject to adjustment) of the
Company's common stock have been reserved for issuance (2,500,000 shares under
the 2000 Employee Plan and 200,000 shares under the 2000 Director Plan). In
1994, and as subsequently amended, the Company established the Mack-Cali
Employee Stock Option Plan ("Employee Plan") and the Mack-Cali Director Stock
Option Plan ("Director Plan") under which a total of 5,380,188 shares (subject
to adjustment) of the Company's common stock have been reserved for issuance
(4,980,188 shares under the Employee Plan and 400,000 shares under the Director
Plan). Stock options granted under the Employee Plan in 1994 and 1995 have
become exercisable over a three-year period and those options granted under both
the 2000 Employee Plan and Employee Plan in 1996, 1997, 1998, 1999 and 2000
become exercisable over a five-year period. All stock options granted under both
the 2000 Director Plan and Director Plan become exercisable in one year. All
options were granted at the fair market value at the dates of grant and have
terms of ten years. As of December 31, 2000 and 1999, the stock options
outstanding had a weighted average remaining contractual life of approximately
7.5 and 7.4 years, respectively.
Information regarding the Company's stock option plans is summarized below:
Weighted
Shares Average
Under Exercise
Options Price
- -------------------------------------------------------------------------------------------------------------------
Outstanding at January 1, 1998 3,287,290 $31.47
Granted 1,048,620 $35.90
Exercised (267,660) $20.47
Lapsed or canceled (128,268) $36.61
- -------------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1998 3,939,982 $33.22
Granted 426,400 $25.23
Exercised (47,583) $22.31
Lapsed or canceled (591,648) $36.92
- -------------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1999 3,727,151 $31.86
Granted 1,523,900 $26.75
Exercised (117,053) $21.45
Lapsed or canceled (500,679) $34.64
- -------------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 2000 4,633,319 $30.14
===================================================================================================================
Options exercisable at December 31, 1999 1,724,920 $29.78
Options exercisable at December 31, 2000 2,049,041 $31.02
- -------------------------------------------------------------------------------------------------------------------
Available for grant at December 31, 1999 662,878
Available for grant at December 31, 2000 2,344,757
- -------------------------------------------------------------------------------------------------------------------
87
The weighted average fair value of options granted during 2000, 1999 and 1998
were $3.40, $2.74 and $5.59 per option, respectively. The fair value of each
significant option grant is estimated on the date of grant using the
Black-Scholes model. The following weighted average assumptions are included in
the Company's fair value calculations of stock options:
2000 1999 1998
- -------------------------------------------------------------------------------------------------------------------
Expected life (in years) 6 6 6
Risk-free interest rate 5.67% 6.12% 5.41%
Volatility 22.66% 24.72% 23.37%
Dividend yield 8.82% 9.15% 5.78%
- -------------------------------------------------------------------------------------------------------------------
FASB NO. 123
Under the above models, the value of stock options granted during 2000, 1999 and
1998 totaled approximately $5,181, $1,167 and $5,281, respectively, which would
be amortized ratably on a pro forma basis over the appropriate vesting period.
Had the Company determined compensation cost for these granted securities in
accordance with FASB No. 123, the Company's pro forma net income, basic earnings
per share and diluted earnings per share would have been $179,131, $3.07 and
$3.01 in 2000, $113,854, $1.95 and $1.94 in 1999 and $110,061, $1.97 and $1.96
in 1998, respectively.
STOCK WARRANTS
The Company has 360,000 warrants outstanding which enable the holders to
purchase an equal number of shares of its common stock ("Stock Warrants") at $33
per share (the market price at date of grant). Such warrants are all currently
exercisable and expire on January 31, 2007.
The Company also has 389,976 Stock Warrants outstanding which enable the holders
to purchase an equal number of its shares of common stock at $38.75 per share
(the market price at date of grant). Such warrants vest equally over a five-year
period through December 31, 2001 and expire on December 12, 2007.
As of December 31, 2000 and 1999, there were a total of 749,976 and 914,976
Stock Warrants outstanding, respectively. As of December 31, 2000 and 1999,
there were 613,985 and 585,989 Stock Warrants exercisable, respectively. For the
years ended December 31, 2000 and 1999, 165,000 and no Stock Warrants were
canceled, respectively. No Stock Warrants have been exercised through December
31, 2000.
STOCK COMPENSATION
In July 1999, the Company entered into amended and restated employment contracts
with six of its then key executive officers which provided for, among other
things, compensation in the form of stock awards and associated tax obligation
payments. In addition, in December 1999, the Company granted stock awards to
certain other officers of the Company. In connection with the stock awards
(collectively, "Restricted Stock Awards"), the executive officers and certain
other officers are to receive up to a total of 211,593 shares of the Company's
common stock vesting over a five-year period contingent upon the Company meeting
certain performance and/or stock price appreciation objectives. The Restricted
Stock Awards provided to the executive officers and certain other officers were
granted under the Employee Plan. Effective January 1, 2000, 31,737 shares of the
Company's common stock were issued to the executive officers and certain other
officers upon meeting the required objectives. In connection with the
resignation of each of Brant Cali and John R. Cali from the Company, all of
their respective remaining restricted stock, an aggregate of 38,649 shares, were
issued to Brant Cali and John R. Cali upon the accelerated vesting of their
remaining Restricted Stock Awards. For the years ended December 31, 2000 and
1999, 5,100 and no unvested Restricted Stock Awards were canceled, respectively.
DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS
The Deferred Compensation Plan for Directors ("Deferred Compensation Plan"),
which commenced January 1, 1999, allows non-employee directors of the Company to
elect to defer up to 100 percent of their annual retainer fee into deferred
stock units. The deferred stock units are convertible into an equal number of
shares of common stock upon the directors' termination of service from the Board
of Directors or a change in control of the Company, as defined in the plan.
Deferred stock units are credited to each director quarterly using the closing
price of the Company's common stock on the applicable dividend record date for
the respective quarter. Each participating director's account is also credited
for an equivalent amount of deferred stock units based on the dividend rate for
each quarter.
88
During the years ended December 31, 2000 and 1999, 4,227 and 3,319 deferred
stock units were earned, respectively.
EARNINGS PER SHARE
FASB No. 128 requires a dual presentation of basic and diluted EPS on the face
of the income statement for all companies with complex capital structures even
where the effect of such dilution is not material. Basic EPS excludes dilution
and is computed by dividing net income available to common stockholders by the
weighted average number of shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
The following information presents the Company's results for the years ended
December 31, 2000, 1999 and 1998 in accordance with FASB No. 128:
For the Year Ended December 31,
2000 1999 1998
----------------------------------------------------------------------------------
Basic EPS Diluted EPS Basic EPS Diluted EPS Basic EPS Diluted EPS
- ---------------------------------------------------------------------------------------------------------------------
Net income $185,338 $185,338 $119,739 $119,739 $116,578 $116,578
Add: Net income attributable
to Operating Partnership -
common units -- 25,612 -- 17,389 -- 15,903
Net income attributable
to Operating Partnership -
preferred units -- 15,441 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------
Adjusted net income $185,338 $226,391 $119,739 $137,128 $116,578 $132,481
=====================================================================================================================
Weighted average shares 58,338 73,070 58,385 67,133 55,840 63,893
- ---------------------------------------------------------------------------------------------------------------------
Per Share $ 3.18 $ 3.10 $ 2.05 $ 2.04 $ 2.09 $ 2.07
=====================================================================================================================
The following schedule reconciles the shares used in the basic EPS calculation
to the shares used in the diluted EPS calculation:
Year Ended December 31,
2000 1999 1998
- -------------------------------------------------------------------------------------------------------------
Basic EPS Shares: 58,338 58,385 55,840
Add: Operating Partnership - common units 8,054 8,500 7,598
Operating Partnership - preferred units
(after conversion to common units) 6,485 -- --
Stock options 188 241 411
Restricted Stock Awards 5 7 --
Stock Warrants -- -- 44
- -------------------------------------------------------------------------------------------------------------
Diluted EPS Shares: 73,070 67,133 63,893
=============================================================================================================
Contingent Units outstanding in 1998 were not included in the 1998 computation
of diluted EPS as such units were anti-dilutive during the period. Preferred
Units outstanding in 1999 and 1998 were not included in the 1999 and 1998
computations of diluted EPS as such units were anti-dilutive during the periods.
Through December 31, 2000, under the Repurchase Program, the Company purchased
for constructive retirement, a total of 3,895,500 shares of its outstanding
common stock for an aggregate cost of approximately $108,076.
89
17. SEGMENT REPORTING
The Company operates in one business segment - real estate. The Company provides
leasing, management, acquisition, development, construction and tenant-related
services for its portfolio. The Company does not have any foreign operations.
The accounting policies of the segments are the same as those described in Note
2, excluding straight-line rent adjustments, depreciation and amortization and
non-recurring charges.
The Company evaluates performance based upon net operating income from the
combined properties in the segment.
Selected results of operations for the years ended December 31, 2000, 1999 and
1998 and selected asset information as of December 31, 2000 and 1999 regarding
the Company's operating segment are as follows:
Total Corporate & Total
Segment Other (e) Company
- -------------------------------------------------------------------------------------------------------------------
TOTAL CONTRACT REVENUES (a):
2000 $ 557,926 $ 5,623 $ 563,549 (f)
1999 534,985 3,903 538,888 (g)
1998 475,096 4,919 480,015 (h)
TOTAL OPERATING AND INTEREST EXPENSES (b):
2000 $ 174,116 $ 126,700 $ 300,816 (i)
1999 168,166 128,925 297,091 (j)
1998 149,791 113,528 263,319 (k)
NET OPERATING INCOME (c):
2000 $ 383,810 $ (121,077) $ 262,733 (f) (i)
1999 366,819 (125,022) 241,797 (g) (j)
1998 325,305 (108,609) 216,696 (h) (k)
TOTAL ASSETS:
2000 $3,623,107 $ 53,870 $3,676,977
1999 3,580,782 48,819 3,629,601
TOTAL LONG-LIVED ASSETS (d):
2000 $3,522,766 $ 23,574 $3,546,340
1999 3,515,669 24,934 3,540,603
===================================================================================================================
(a) Total contract revenues represent all revenues during the period (including
the Company's share of net income from unconsolidated joint ventures),
excluding adjustments for straight-lining of rents and the Company's share
of straight-line rent adjustments from unconsolidated joint ventures. All
interest income is excluded from segment amounts and is classified in
Corporate and Other for all periods.
(b) Total operating and interest expenses represent the sum of real estate
taxes, utilities, operating services, general and administrative and
interest expense. All interest expense (including for property-level
mortgages) is excluded from segment amounts and classified in Corporate and
Other for all periods.
(c) Net operating income represents total contract revenues [as defined in Note
(a)] less total operating and interest expenses [as defined in Note (b)]
for the period.
(d) Long-lived assets are comprised of total rental property, unbilled rents
receivable and investments in unconsolidated joint ventures.
(e) Corporate & Other represents all corporate-level items (including interest
and other investment income, interest expense and non-property general and
administrative expense) as well as intercompany eliminations necessary to
reconcile to consolidated Company totals.
(g) Excludes $12,580 of adjustments for straight-lining of rents and $24 for
the Company's share of straight-line rent adjustments from unconsolidated
joint ventures.
(g) Excludes $12,438 of adjustments for straight-lining of rents and $158 for
the Company's share of straight-line rent adjustments from unconsolidated
joint ventures.
(h) Excludes $13,575 of adjustments for straight-lining of rents and $109 for
the Company's share of straight-line rent adjustments from unconsolidated
joint ventures.
(i) Excludes $92,088 of depreciation and amortization and non-recurring charges
of $37,139.
(j) Excludes $87,209 of depreciation and amortization and non-recurring charges
of $16,458.
(k) Excludes $78,916 of depreciation and amortization.
90
18. RELATED PARTY TRANSACTIONS
The son of a current director of the Company, who was also a former officer of
the Company, serves as an officer of a company which provides cleaning and other
related services to certain of the Company's properties. The Company has
incurred costs from this company of approximately $3,164, $2,524 and $2,296 for
the years ended December 31, 2000, 1999 and 1998, respectively. As of December
31, 2000 and 1999, respectively, the Company had accounts payable of
approximately $108 and $307 to this company.
The Company provides management, leasing and construction services to properties
owned by third parties in which certain officers and directors of the Company
hold an ownership interest. The Company recognized approximately $1,921, $1,960
and $2,476 in revenues from these properties for the years ended December 31,
2000, 1999 and 1998, respectively. As of December 31, 2000 and 1999,
respectively, the Company had total receivables from these properties of
approximately $1,000 and $96.
The Company purchased land parcels in three separate transactions from
affiliates of the Company. The Company also acquired a portfolio of properties
from an affiliate of the Company. See Note 3.
19. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities ("FASB No.
133"). FASB No. 133 is effective for all fiscal quarters of all fiscal years
beginning after June 15, 1999. In June 1999, the FASB delayed the implementation
date of FASB No. 133 by one year (January 1, 2001 for the Company). FASB No. 133
requires that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. Management of the Company has determined that, due to its
limited use of derivative instruments, the adoption of FASB No. 133 will not
have a significant effect on the Company's financial position at January 1,
2001, nor is it expected to materially impact future results of operations.
91
20. CONDENSED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following summarizes the condensed quarterly financial information for the
Company:
QUARTER ENDED 2000: December 31 September 30 June 30 March 31
- -------------------------------------------------------------------------------------------------------------------
Total revenues $ 143,903 $ 143,382 $ 145,889 $142,979
Operating and other expenses 43,561 44,191 41,569 42,825
General and administrative 6,543 5,461 5,159 6,113
Depreciation and amortization 23,641 23,320 22,945 22,182
Interest expense 26,271 25,862 26,835 26,426
Non-recurring charges -- 27,911 9,228 --
- -------------------------------------------------------------------------------------------------------------------
Income before gain on sales of
rental property, minority interests and
extraordinary item 43,887 16,637 40,153 45,433
(Loss) gain on sales of rental property (852) 10,036 73,921 2,248
- -------------------------------------------------------------------------------------------------------------------
Income before minority interests and
extraordinary item 43,035 26,673 114,074 47,681
Minority interests 8,632 6,661 19,766 11,066
- -------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 34,403 20,012 94,308 36,615
Extraordinary item-loss on early
retirement of debt -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net income $ 34,403 $ 20,012 $ 94,308 $ 36,615
===================================================================================================================
BASIC EARNINGS PER SHARE:
Income before extraordinary item $ 0.60 $ 0.34 $ 1.61 $ 0.63
Extraordinary item - loss on early
retirement of debt -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net income $ 0.60 $ 0.34 $ 1.61 $ 0.63
===================================================================================================================
DILUTED EARNINGS PER SHARE:
Income before extraordinary item $ 0.59 $ 0.34 $ 1.52 $ 0.62
Extraordinary item - loss on early
retirement of debt -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net income $ 0.59 $ 0.34 $ 1.52 $ 0.62
===================================================================================================================
Dividends declared per common share $ 0.61 $ 0.61 $ 0.58 $ 0.58
- -------------------------------------------------------------------------------------------------------------------
92
QUARTER ENDED 1999: December 31 September 30 June 30 March 31
- -------------------------------------------------------------------------------------------------------------------
Total revenues $ 140,600 $ 139,020 $ 136,975 $134,889
Operating and other expenses 43,716 42,947 41,466 40,522
General and administrative 6,258 5,691 5,568 7,963
Depreciation and amortization 19,808 22,967 22,465 21,969
Interest expense 27,167 26,474 25,697 23,622
Non-recurring charges -- -- 16,458 --
- -------------------------------------------------------------------------------------------------------------------
Income before gain on sale of
rental property, minority interests and
extraordinary item 43,651 40,941 25,321 40,813
Gain on sale of rental property 1,957 -- -- --
- -------------------------------------------------------------------------------------------------------------------
Income before minority interests and
extraordinary item 45,608 40,941 25,321 40,813
Minority interests 9,139 8,421 6,635 8,749
- -------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 36,469 32,520 18,686 32,064
Extraordinary item - loss on early
retirement of debt -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net income $ 36,469 $ 32,520 $ 18,686 $ 32,064
===================================================================================================================
BASIC EARNINGS PER SHARE:
Income before extraordinary item $ 0.63 $ 0.55 $ 0.32 $ 0.55
Extraordinary item - loss on early
retirement of debt -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net income $ 0.63 $ 0.55 $ 0.32 $ 0.55
===================================================================================================================
DILUTED EARNINGS PER SHARE:
Income before extraordinary item $ 0.62 $ 0.55 $ 0.32 $ 0.55
Extraordinary item - loss on early
retirement of debt -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net income $ 0.62 $ 0.55 $ 0.32 $ 0.55
===================================================================================================================
Dividends declared per common share $ 0.58 $ 0.58 $ 0.55 $ 0.55
- -------------------------------------------------------------------------------------------------------------------
93
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED --------------------------
PROPERTY YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND ACCUMULATED
LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL DEPRECIATION
- ------------ ----- -------- ------------ ---- ------------ -------------- ---- ------------ ----- ------------
ATLANTIC COUNTY,
NEW JERSEY
EGG HARBOR
100 Decadon
Drive (O)......... 1987 1995 -- $300 $3,282 $160 $300 $3,442 $3,742 $437
200 Decadon
Drive (O)......... 1991 1995 -- 369 3,241 169 369 3,410 3,779 480
BERGEN COUNTY,
NEW JERSEY
FAIR LAWN
17-17 Rte 208
North (O)......... 1987 1995 -- 3,067 19,415 941 3,067 20,356 23,423 2,980
FORT LEE
One Bridge
Plaza (O)......... 1981 1996 -- 2,439 24,462 1,560 2,439 26,022 28,461 2,862
2115 Linwood
Avenue (O)........ 1981 1998 -- 474 4,419 4,454 474 8,873 9,347 326
LITTLE FERRY
200 Riser
Road (O).......... 1974 1997 10,500 3,888 15,551 246 3,888 15,797 19,685 1,197
MONTVALE
95 Chestnut
Ridge Road (O).... 1975 1997 2,135 1,227 4,907 523 1,227 5,430 6,657 376
135 Chestnut
Ridge Road (O).... 1981 1997 -- 2,587 10,350 1,740 2,588 12,089 14,677 829
PARAMUS
15 East Midland
Avenue (O)........ 1988 1997 24,790 10,375 41,497 70 10,374 41,568 51,942 3,161
461 From
Road (O).......... 1988 1997 35,000 13,194 52,778 121 13,194 52,899 66,093 4,021
650 From Road
(O)............... 1978 1997 23,316 10,487 41,949 593 10,487 42,542 53,029 3,216
140 Ridgewood
Avenue (O)........ 1981 1997 15,392 7,932 31,463 578 7,932 32,041 39,973 2,122
61 South Paramus
Avenue (O)........ 1985 1997 15,776 9,005 36,018 4,234 9,005 40,252 49,257 3,153
ROCHELLE PARK
120 Passaic
Street (O)........ 1972 1997 -- 1,354 5,415 99 1,357 5,511 6,868 413
365 West Passaic
Street (O)........ 1976 1997 7,468 4,148 16,592 1,615 4,148 18,207 22,355 1,430
SADDLE RIVER
1 Lake
Street (O)........ 1994 1997 35,789 13,952 55,812 7 13,953 55,818 69,771 4,248
UPPER SADDLE RIVER
10 Mountainview
Road (O).......... 1986 1998 -- 4,240 20,485 375 4,240 20,860 25,100 1,823
WOODCLIFF LAKE
400 Chestnut
Ridge Road (O).... 1982 1997 13,588 4,201 16,802 9 4,200 16,812 21,012 1,276
470 Chestnut
Ridge Road (O).... 1987 1997 4,087 2,346 9,385 2 2,346 9,387 11,733 714
530 Chestnut
Ridge Road (O).... 1986 1997 4,032 1,860 7,441 3 1,860 7,444 9,304 566
300 Tice
Boulevard (O)..... 1991 1996 -- 5,424 29,688 575 5,424 30,263 35,687 3,130
50 Tice Boulevard
(O)............... 1984 1994 -- 4,500 -- 26,644 4,500 26,644 31,144 12,226
BURLINGTON COUNTY,
NEW JERSEY
BURLINGTON
3 Terri Lane (F).. 1991 1998 -- 652 3,433 906 658 4,333 4,991 374
5 Terri Lane (F).. 1992 1998 -- 564 3,792 1,662 569 5,449 6,018 451
DELRAN
Tenby Chase
Apartments (M).... 1970 1994 -- 396 -- 5,584 396 5,584 5,980 3,600
MOORESTOWN
2 Commerce
Drive (F)......... 1986 1999 -- 723 2,893 59 723 2,952 3,675 73
101 Commerce
Drive (F)......... 1988 1998 -- 422 3,528 253 426 3,777 4,203 385
102 Commerce
Drive (F)......... 1987 1999 -- 389 1,554 34 389 1,588 1,977 39
201 Commerce
Drive (F)......... 1986 1998 -- 254 1,694 90 257 1,781 2,038 159
202 Commerce
Drive (F)......... 1988 1999 -- 490 1,963 21 490 1,984 2,474 49
1 Executive
Drive (F)......... 1989 1998 -- 226 1,453 205 228 1,656 1,884 162
2 Executive
Drive (F)......... 1988 2000 -- 801 3,206 73 801 3,279 4,080 61
101 Executive
Drive (F)......... 1990 1998 807 241 2,262 208 244 2,467 2,711 214
102 Executive
Drive (F)......... 1990 1998 -- 353 3,607 252 357 3,855 4,212 351
225 Executive
Drive (F)......... 1990 1998 1,391 323 2,477 100 326 2,574 2,900 248
97 Foster
Road (F).......... 1982 1998 -- 208 1,382 54 211 1,433 1,644 118
1507 Lancer
Drive (F)......... 1995 1998 -- 119 1,106 44 120 1,149 1,269 94
1510 Lancer
Drive (F)......... 1998 1998 -- 732 2,928 41 735 2,966 3,701 185
94
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED --------------------------
PROPERTY YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND ACCUMULATED
LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL DEPRECIATION
- ------------ ----- -------- ------------ ---- ------------ -------------- ---- ------------ ----- ------------
840 North
Lenola Road (F)... 1995 1998 -- 329 2,366 50 333 2,412 2,745 215
844 North
Lenola Road (F)... 1995 1998 -- 239 1,714 38 241 1,750 1,991 156
915 North
Lenola Road (F)... 1998 2000 -- 508 2,034 2 508 2,036 2,544 25
1256 North
Church (F)........ 1984 1998 -- 354 3,098 250 357 3,345 3,702 324
224 Strawbridge
Drive (O)......... 1984 1997 -- 766 4,335 3,134 767 7,468 8,235 819
228 Strawbridge
Drive (O)......... 1984 1997 -- 766 4,334 2,907 767 7,240 8,007 986
30 Twosome
Drive (F)......... 1997 1998 -- 234 1,954 48 236 2,000 2,236 189
40 Twosome
Drive (F)......... 1996 1998 -- 297 2,393 102 301 2,491 2,792 211
50 Twosome
Drive (F)......... 1997 1998 -- 301 2,330 44 304 2,371 2,675 218
WEST DEPTFORD
1451 Metropolitan
Drive (F)......... 1996 1998 -- 203 1,189 23 206 1,209 1,415 112
ESSEX COUNTY,
NEW JERSEY
MILLBURN
150 J.F. Kennedy
Parkway (O)....... 1980 1997 25,911 12,606 50,425 1,478 12,606 51,903 64,509 3,851
ROSELAND
101 Eisenhower
Parkway (O)....... 1980 1994 -- 228 -- 14,695 228 14,695 14,923 8,430
103 Eisenhower
Parkway (O)....... 1985 1994 -- -- -- 13,254 2,300 10,954 13,254 4,408
HUDSON COUNTY,
NEW JERSEY
JERSEY CITY
Harborside
Financial Center
Plaza 1 (O)....... 1983 1996 54,370 3,923 51,013 -- 3,923 51,013 54,936 5,314
Harborside
Financial Center
Plaza 2 (O)....... 1990 1996 47,815 17,655 101,546 2,769 15,238 106,732 121,970 10,911
Harborside
Financial Center
Plaza 3 (O)....... 1990 1996 47,815 17,655 101,878 2,046 15,189 106,390 121,579 10,867
Harborside
Financial Center
Plaza 4A (O)...... 2000 2000 -- 1,244 56,144 -- 1,244 56,144 57,388 354
MERCER COUNTY,
NEW JERSEY
HAMILTON TOWNSHIP
100 Horizon
Drive (F)......... 1989 1995 -- 205 1,676 54 205 1,730 1,935 217
200 Horizon
Drive (F)......... 1991 1995 -- 205 3,027 145 205 3,172 3,377 391
300 Horizon
Drive (F)......... 1989 1995 -- 379 4,355 272 379 4,627 5,006 576
500 Horizon
Drive (F)......... 1990 1995 -- 379 3,395 135 379 3,530 3,909 516
Zero Horizon
Drive (L)......... n/a 1999 -- 498 -- 1,787 498 1,787 2,285 --
PRINCETON
103 Carnegie
Center (O)........ 1984 1996 -- 2,566 7,868 687 2,566 8,555 11,121 1,212
100 Overlook
Center (O)........ 1988 1997 -- 2,378 21,754 388 2,378 22,142 24,520 1,740
5 Vaughn
Drive (O)......... 1987 1995 -- 657 9,800 449 657 10,249 10,906 1,511
MIDDLESEX COUNTY,
NEW JERSEY
EAST BRUNSWICK
377 Summerhill
Road (O).......... 1977 1997 -- 649 2,594 252 649 2,846 3,495 213
PLAINSBORO
500 College
Road East (O)..... 1984 1998 -- 614 20,626 293 614 20,919 21,533 1,456
SOUTH BRUNSWICK
3 Independence
Way (O)........... 1983 1997 -- 1,997 11,391 222 1,997 11,613 13,610 995
WOODBRIDGE
581 Main
Street (O)........ 1991 1997 17,500 3,237 12,949 19,613 8,115 27,684 35,799 1,757
MONMOUTH COUNTY,
NEW JERSEY
NEPTUNE
3600 Route 66
(O)............... 1989 1995 -- 1,098 18,146 41 1,098 18,187 19,285 2,356
WALL TOWNSHIP
1305 Campus
Parkway (O)....... 1988 1995 -- 335 2,560 80 335 2,640 2,975 386
1325 Campus
Parkway (F)....... 1988 1995 -- 270 2,928 381 270 3,309 3,579 404
1340 Campus
Parkway (F)....... 1992 1995 -- 489 4,621 379 489 5,000 5,489 751
1345 Campus
Parkway (F)....... 1995 1997 -- 1,023 5,703 56 1,024 5,758 6,782 565
1350 Campus
Parkway (O)....... 1990 1995 -- 454 7,134 641 454 7,775 8,229 1,124
1433 Highway
34 (F)............ 1985 1995 -- 889 4,321 697 889 5,018 5,907 783
95
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED ---------------------------
YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND ACCUMULATED
PROPERTY LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL DEPRECIATION
- --------------------- ----- -------- ------------ ---- ------------ -------------- ---- ------------ ----- ------------
1320 Wyckoff Avenue (F)....... 1986 1995 -- 255 1,285 1 255 1,286 1,541 166
1324 Wyckoff Avenue (F)....... 1987 1995 -- 230 1,439 196 230 1,635 1,865 267
MORRIS COUNTY, NEW JERSEY
FLORHAM PARK
325 Columbia Parkway (O)...... 1987 1994 -- 1,564 -- 15,995 1,564 15,995 17,559 6,692
MORRIS PLAINS
250 Johnson Road (O).......... 1977 1997 2,169 2,004 8,016 313 2,004 8,329 10,333 621
201 Littleton Road (O)........ 1979 1997 -- 2,407 9,627 170 2,407 9,797 12,204 739
MORRIS TOWNSHIP
340 Mt. Kemble Avenue (O)..... 1985 1997 32,178 13,624 54,496 40 13,624 54,536 68,160 4,150
PARSIPPANY
7 Campus Drive (O)............ 1982 1998 -- 1,932 27,788 107 1,932 27,895 29,827 2,011
8 Campus Drive (O)............ 1987 1998 -- 1,865 35,456 845 1,865 36,301 38,166 2,724
2 Dryden Way (O).............. 1990 1998 -- 778 420 13 778 433 1,211 40
4 Gatehall Drive (O).......... 1988 2000 -- 8,452 33,929 63 8,452 33,992 42,444 495
2 Hilton Court (O)............ 1991 1998 -- 1,971 32,007 138 1,971 32,145 34,116 2,356
600 Parsippany Road (O)....... 1978 1994 -- 1,257 5,594 1,053 1,257 6,647 7,904 1,095
1 Sylvan Way (O).............. 1989 1998 -- 1,689 24,699 2,224 1,689 26,923 28,612 2,299
5 Sylvan Way (O).............. 1989 1998 -- 1,160 25,214 647 1,160 25,861 27,021 1,836
7 Sylvan Way (O).............. 1987 1998 -- 2,084 26,083 35 2,084 26,118 28,202 1,922
PASSAIC COUNTY, NEW JERSEY
CLIFTON
777 Passaic Avenue (O)........ 1983 1994 -- -- -- 7,291 1,100 6,191 7,291 2,836
TOTOWA
1 Center Court (F)............ 1999 1999 -- 270 1,824 90 270 1,914 2,184 104
2 Center Court (F)............ 1998 1998 -- 191 -- 2,563 191 2,563 2,754 304
11 Commerce Way (F)........... 1989 1995 -- 586 2,986 230 586 3,216 3,802 434
20 Commerce Way (F)........... 1992 1995 -- 516 3,108 52 516 3,160 3,676 404
29 Commerce Way (F)........... 1990 1995 -- 586 3,092 230 586 3,322 3,908 544
40 Commerce Way (F)........... 1987 1995 -- 516 3,260 375 516 3,635 4,151 669
45 Commerce Way (F)........... 1992 1995 -- 536 3,379 142 536 3,521 4,057 542
60 Commerce Way (F)........... 1988 1995 -- 526 3,257 281 526 3,538 4,064 597
80 Commerce Way (F)........... 1996 1996 -- 227 -- 1,638 227 1,638 1,865 437
100 Commerce Way (F).......... 1996 1996 -- 226 -- 1,638 226 1,638 1,864 437
120 Commerce Way (F).......... 1994 1995 -- 228 -- 1,201 228 1,200 1,428 161
140 Commerce Way (F).......... 1994 1995 -- 229 -- 1,199 229 1,200 1,429 160
999 Riverview Drive (O)....... 1988 1995 -- 476 6,024 590 476 6,614 7,090 894
WAYNE
201 Willowbrook Boulevard (O). 1970 1997 9,460 3,103 12,410 2,954 3,103 15,364 18,467 969
SOMERSET COUNTY, NEW JERSEY
BASKING RIDGE
106 Allen Road (O)............ 2000 2000 -- 3,853 14,465 -- 3,853 14,465 18,318 136
222 Mt. Airy Road (O)......... 1986 1996 -- 775 3,636 31 775 3,667 4,442 403
233 Mt. Airy Road (O)......... 1987 1996 -- 1,034 5,033 16 1,034 5,049 6,083 557
BRIDGEWATER
721 Route 202/206 (O)......... 1989 1997 23,000 6,730 26,919 488 6,730 27,407 34,137 2,056
96
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED ---------------------------
YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND ACCUMULATED
PROPERTY LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL DEPRECIATION
- --------------------- ----- -------- ------------ ---- ------------ -------------- ---- ------------ ----- ------------
UNION COUNTY, NEW JERSEY
CLARK
100 Walnut Avenue (O)....... 1985 1994 -- -- -- 17,795 1,822 15,973 17,795 7,681
CRANFORD
6 Commerce Drive (O)........ 1973 1994 -- 250 -- 2,884 250 2,884 3,134 1,709
11 Commerce Drive (O)....... 1981 1994 -- 470 -- 6,618 470 6,618 7,088 3,417
12 Commerce Drive (O)....... 1967 1997 -- 887 3,549 422 887 3,971 4,858 275
20 Commerce Drive (O)....... 1990 1994 -- 2,346 -- 22,648 2,346 22,648 24,994 7,237
65 Jackson Drive (O)........ 1984 1994 -- 541 -- 7,124 541 7,124 7,665 3,780
NEW PROVIDENCE
890 Mountain Road (O)....... 1977 1997 -- 2,796 11,185 4,257 3,765 14,473 18,238 1,084
DUTCHESS COUNTY, NEW YORK
FISHKILL
300 South Lake Drive (O).... 1987 1997 -- 2,258 9,031 143 2,258 9,174 11,432 717
NASSAU COUNTY, NEW YORK
NORTH HEMPSTEAD
600 Community Drive (O)..... 1983 1997 -- 11,018 44,070 246 11,018 44,316 55,334 3,398
111 East Shore Road (O)..... 1980 1997 -- 2,093 8,370 363 2,093 8,733 10,826 654
ROCKLAND COUNTY, NEW YORK
SUFFERN
400 Rella Boulevard (O)..... 1988 1995 -- 1,090 13,412 1,391 1,090 14,803 15,893 2,267
WESTCHESTER COUNTY,
NEW YORK ELMSFORD
11 Clearbrook Road (F)...... 1974 1997 -- 149 2,159 23 149 2,182 2,331 215
75 Clearbrook Road (F)...... 1990 1997 -- 2,314 4,716 -- 2,314 4,716 7,030 462
100 Clearbrook Road (O)..... 1975 1997 -- 220 5,366 145 220 5,511 5,731 647
150 Clearbrook Road (F)..... 1975 1997 -- 497 7,030 88 497 7,118 7,615 720
175 Clearbrook Road (F)..... 1973 1997 -- 655 7,473 297 655 7,770 8,425 805
200 Clearbrook Road (F)..... 1974 1997 -- 579 6,620 520 579 7,140 7,719 724
250 Clearbrook Road (F)..... 1973 1997 -- 867 8,647 525 867 9,172 10,039 896
50 Executive Boulevard (F).. 1969 1997 -- 237 2,617 56 237 2,673 2,910 256
77 Executive Boulevard (F).. 1977 1997 -- 34 1,104 33 34 1,137 1,171 111
85 Executive Boulevard (F).. 1968 1997 -- 155 2,507 36 155 2,543 2,698 252
101 Executive Boulevard (O). 1971 1997 -- 267 5,838 278 267 6,116 6,383 609
300 Executive Boulevard (F). 1970 1997 -- 460 3,609 -- 460 3,609 4,069 353
350 Executive Boulevard (F). 1970 1997 -- 100 1,793 1 100 1,794 1,894 176
399 Executive Boulevard (F). 1962 1997 -- 531 7,191 111 531 7,302 7,833 746
400 Executive Boulevard (F). 1970 1997 -- 2,202 1,846 289 2,202 2,135 4,337 266
500 Executive Boulevard (F). 1970 1997 -- 258 4,183 550 258 4,733 4,991 444
525 Executive Boulevard (F). 1972 1997 -- 345 5,499 126 345 5,625 5,970 556
700 Executive Boulevard (L). n/a 1997 -- 970 -- -- 970 -- 970 --
555 Taxter Road (O)......... 1986 2000 -- 4,285 17,205 280 4,285 17,485 21,770 250
565 Taxter Road (O)......... 1988 2000 -- 4,285 17,205 319 4,285 17,524 21,809 252
570 Taxter Road (O)......... 1972 1997 -- 438 6,078 468 438 6,546 6,984 654
1 Warehouse Lane (I)........ 1957 1997 -- 3 268 202 2 471 473 36
2 Warehouse Lane (I)........ 1957 1997 -- 4 672 47 4 719 723 74
3 Warehouse Lane (I)........ 1957 1997 -- 21 1,948 388 21 2,336 2,357 219
4 Warehouse Lane (I)........ 1957 1997 -- 84 13,393 216 85 13,608 13,693 1,356
5 Warehouse Lane (I)........ 1957 1997 -- 19 4,804 213 19 5,017 5,036 514
6 Warehouse Lane (I)........ 1982 1997 -- 10 4,419 38 10 4,457 4,467 434
1 Westchester Plaza (F)..... 1967 1997 -- 199 2,023 52 199 2,075 2,274 211
2 Westchester Plaza (F)..... 1968 1997 -- 234 2,726 77 234 2,803 3,037 269
3 Westchester Plaza (F)..... 1969 1997 -- 655 7,936 71 655 8,007 8,662 785
4 Westchester Plaza (F)..... 1969 1997 -- 320 3,729 83 320 3,812 4,132 401
97
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED ---------------------------
YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND
PROPERTY LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL
- --------------------- ----- -------- ------------ ---- ------------ -------------- ---- ------------ -----
5 Westchester Plaza (F)....... 1969 1997 -- 118 1,949 -- 118 1,949 2,067
6 Westchester Plaza (F)....... 1968 1997 -- 164 1,998 133 164 2,131 2,295
7 Westchester Plaza (F)....... 1972 1997 -- 286 4,321 24 286 4,345 4,631
8 Westchester Plaza (F)....... 1971 1997 -- 447 5,262 610 447 5,872 6,319
HAWTHORNE
30 Saw Mill River Road (O).... 1982 1997 -- 2,355 34,254 4,326 2,355 38,580 40,935
200 Saw Mill River Road (F)... 1965 1997 -- 353 3,353 156 353 3,509 3,862
1 Skyline Drive (O)........... 1980 1997 -- 66 1,711 100 66 1,811 1,877
2 Skyline Drive (O)........... 1987 1997 -- 109 3,128 283 109 3,411 3,520
4 Skyline Drive (F)........... 1987 1997 -- 363 7,513 450 363 7,963 8,326
7 Skyline Drive (O)........... 1987 1998 -- 330 13,013 101 330 13,114 13,444
8 Skyline Drive (F)........... 1985 1997 -- 212 4,410 814 212 5,224 5,436
10 Skyline Drive (F).......... 1985 1997 -- 134 2,799 96 134 2,895 3,029
11 Skyline Drive (F).......... 1989 1997 -- -- 4,788 340 -- 5,128 5,128
12 Skyline Drive (F).......... 1999 1999 -- 1,562 3,254 1,741 1,562 4,995 6,557
15 Skyline Drive (F).......... 1989 1997 -- -- 7,449 637 -- 8,086 8,086
17 Skyline Drive (O).......... 1989 1997 -- -- 7,269 128 -- 7,397 7,397
TARRYTOWN
200 White Plains Road (O)..... 1982 1997 -- 378 8,367 690 378 9,057 9,435
220 White Plains Road (O)..... 1984 1997 -- 367 8,112 498 367 8,610 8,977
230 White Plains Road (R)..... 1984 1997 -- 124 1,845 -- 124 1,845 1,969
WHITE PLAINS
1 Barker Avenue (O)........... 1975 1997 -- 208 9,629 500 207 10,130 10,337
3 Barker Avenue (O)........... 1983 1997 -- 122 7,864 566 122 8,430 8,552
50 Main Street (O)............ 1985 1997 -- 564 48,105 3,154 564 51,259 51,823
11 Martine Avenue (O)......... 1987 1997 -- 127 26,833 3,368 127 30,201 30,328
25 Martine Avenue (M)......... 1987 1997 -- 120 11,366 317 120 11,683 11,803
1 Water Street (O)............ 1979 1997 -- 211 5,382 270 211 5,652 5,863
YONKERS
100 Corporate Boulevard (F)... 1987 1997 -- 602 9,910 443 602 10,353 10,955
200 Corporate Boulevard
South (F)................... 1990 1997 -- 502 7,575 191 502 7,766 8,268
1 Enterprise Boulevard (L).... n/a 1997 -- 1,379 -- -- 1,379 -- 1,379
1 Executive Boulevard (O)..... 1982 1997 -- 1,104 11,904 679 1,105 12,582 13,687
2 Executive Plaza (R)......... 1986 1997 -- 89 2,439 -- 89 2,439 2,528
3 Executive Plaza (O)......... 1987 1997 -- 385 6,256 320 385 6,576 6,961
4 Executive Plaza (F)......... 1986 1997 -- 584 6,134 334 584 6,468 7,052
6 Executive Plaza (F)......... 1987 1997 -- 546 7,246 45 546 7,291 7,837
1 Odell Plaza (F)............. 1980 1997 -- 1,206 6,815 370 1,206 7,185 8,391
5 Odell Plaza (F)............. 1983 1997 -- 331 2,988 34 331 3,022 3,353
7 Odell Plaza (F)............. 1984 1997 -- 419 4,418 106 419 4,524 4,943
CHESTER COUNTY, PENNSYLVANIA
BERWYN
1000 Westlakes Drive (O)...... 1989 1997 -- 619 9,016 113 619 9,129 9,748
1055 Westlakes Drive (O)...... 1990 1997 -- 1,951 19,046 211 1,951 19,257 21,208
1205 Westlakes Drive (O)...... 1988 1997 -- 1,323 20,098 465 1,323 20,563 21,886
1235 Westlakes Drive (O)...... 1986 1997 -- 1,417 21,215 589 1,418 21,803 23,221
DELAWARE COUNTY, PENNSYLVANIA
LESTER
100 Stevens Drive (O)......... 1986 1996 -- 1,349 10,018 2,544 1,349 12,562 13,911
200 Stevens Drive (O)......... 1987 1996 -- 1,644 20,186 4,260 1,644 24,446 26,090
300 Stevens Drive (O)......... 1992 1996 -- 491 9,490 748 491 10,238 10,729
MEDIA
1400 Providence Rd -
Center I (O)................ 1986 1996 -- 1,042 9,054 832 1,042 9,886 10,928
1400 Providence Rd. -
Center II(O)................ 1990 1996 -- 1,543 16,464 1,029 1,544 17,492 19,036
ACCUMULATED
PROPERTY LOCATION (2) DEPRECIATION
- --------------------- ------------
5 Westchester Plaza (F)....... 191
6 Westchester Plaza (F)....... 225
7 Westchester Plaza (F)....... 434
8 Westchester Plaza (F)....... 729
HAWTHORNE
30 Saw Mill River Road (O).... 5,214
200 Saw Mill River Road (F)... 362
1 Skyline Drive (O)........... 172
2 Skyline Drive (O)........... 367
4 Skyline Drive (F)........... 1,015
7 Skyline Drive (O)........... 761
8 Skyline Drive (F)........... 600
10 Skyline Drive (F).......... 308
11 Skyline Drive (F).......... 526
12 Skyline Drive (F).......... 238
15 Skyline Drive (F).......... 951
17 Skyline Drive (O).......... 720
TARRYTOWN
200 White Plains Road (O)..... 1,108
220 White Plains Road (O)..... 878
230 White Plains Road (R)..... 181
WHITE PLAINS
1 Barker Avenue (O)........... 1,012
3 Barker Avenue (O)........... 871
50 Main Street (O)............ 5,437
11 Martine Avenue (O)......... 3,045
25 Martine Avenue (M)......... 1,136
1 Water Street (O)............ 565
YONKERS
100 Corporate Boulevard (F)... 1,027
200 Corporate Boulevard
South (F)................... 701
1 Enterprise Boulevard (L).... --
1 Executive Boulevard (O)..... 1,382
2 Executive Plaza (R)......... 239
3 Executive Plaza (O)......... 649
4 Executive Plaza (F)......... 706
6 Executive Plaza (F)......... 719
1 Odell Plaza (F)............. 713
5 Odell Plaza (F)............. 294
7 Odell Plaza (F)............. 488
CHESTER COUNTY, PENNSYLVANIA
BERWYN
1000 Westlakes Drive (O)...... 887
1055 Westlakes Drive (O)...... 1,867
1205 Westlakes Drive (O)...... 2,068
1235 Westlakes Drive (O)...... 2,138
DELAWARE COUNTY, PENNSYLVANIA
LESTER
100 Stevens Drive (O)......... 1,116
200 Stevens Drive (O)......... 2,168
300 Stevens Drive (O)......... 970
MEDIA
1400 Providence Rd -
Center I (O)................ 1,202
1400 Providence Rd. -
Center II(O)................ 2,272
98
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED ---------------------------
YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND
PROPERTY LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL
- --------------------- ----- -------- ------------ ---- ------------ -------------- ---- ------------ -----
MONTGOMERY COUNTY, PENNSYLVANIA
LOWER PROVIDENCE
1000 Madison Avenue (O)....... 1990 1997 -- 1,713 12,559 172 1,714 12,730 14,444
PLYMOUTH MEETING
1150 Plymouth Meeting Mall (O) 1970 1997 -- 125 499 20,757 125 21,256 21,381
Five Sentry Parkway East (O).. 1984 1996 -- 642 7,992 475 642 8,467 9,109
Five Sentry Parkway West (O).. 1984 1996 -- 268 3,334 53 268 3,387 3,655
FAIRFIELD COUNTY, CONNECTICUT
GREENWICH
500 West Putnam Avenue (O).... 1973 1998 10,069 3,300 16,734 936 3,300 17,670 20,970
NORWALK
40 Richards Avenue (O)........ 1985 1998 -- 1,087 18,399 1,538 1,087 19,937 21,024
SHELTON
1000 Bridgeport Avenue (O).... 1986 1997 -- 773 14,934 337 744 15,300 16,044
STAMFORD
419 West Avenue (F)........... 1986 1997 -- 4,538 9,246 49 4,538 9,295 13,833
500 West Avenue (F)........... 1988 1997 -- 415 1,679 180 415 1,859 2,274
550 West Avenue (F)........... 1990 1997 -- 1,975 3,856 322 1,975 4,178 6,153
600 West Avenue (F)........... 1999 1999 -- 2,305 2,863 795 2,305 3,658 5,963
650 West Avenue (F)........... 1998 1998 -- 1,328 -- 3,891 1,328 3,891 5,219
WASHINGTON, D.C.
1201 Connecticut Avenue, NW (O) 1940 1999 -- 14,228 18,571 773 14,228 19,344 33,572
1400 L Street, NW (O)......... 1987 1998 -- 13,054 27,423 724 13,054 28,147 41,201
1709 New York Avenue, NW (O).. 1972 1998 -- 19,898 29,686 2,829 19,898 32,515 52,413
PRINCE GEORGE'S COUNTY, MARYLAND
LANHAM
4200 Parliament Place (O)..... 1989 1998 -- 2,114 13,546 467 1,393 14,734 16,127
BEXAR COUNTY, TEXAS
SAN ANTONIO
200 Concord Plaza Drive (O)... 1986 1997 -- 2,387 31,825 844 2,393 32,663 35,056
84 N.E. Loop 410 (O).......... 1971 1997 -- 2,295 10,382 505 2,295 10,887 13,182
1777 N.E. Loop 410 (O)........ 1986 1997 -- 3,119 12,477 1,101 3,119 13,578 16,697
111 Soledad (O)............... 1918 1997 -- 2,004 8,017 593 2,004 8,610 10,614
COLLIN COUNTY, TEXAS
PLANO
555 Republic Place (O)........ 1986 1997 -- 942 3,767 197 942 3,964 4,906
DALLAS COUNTY, TEXAS
DALLAS
3030 LBJ Freeway (O).......... 1984 1997 -- 6,098 24,366 1,353 6,098 25,719 31,817
3100 Monticello (O)........... 1984 1997 -- 1,940 7,762 4,816 2,511 12,007 14,518
8214 Westchester (O).......... 1983 1997 -- 1,705 6,819 350 1,705 7,169 8,874
IRVING
2300 Valley View (O).......... 1985 1997 -- 1,913 7,651 745 1,913 8,396 10,309
RICHARDSON
1122 Alma Road (O)............ 1977 1997 -- 754 3,015 169 754 3,184 3,938
HARRIS COUNTY, TEXAS
HOUSTON
10497 Town & Country Way (O).. 1981 1997 -- 1,619 6,476 918 1,619 7,394 9,013
ACCUMULATED
PROPERTY LOCATION (2) DEPRECIATION
- --------------------- ------------
MONTGOMERY COUNTY, PENNSYLVANIA
LOWER PROVIDENCE
1000 Madison Avenue (O)....... 1,065
PLYMOUTH MEETING
1150 Plymouth Meeting Mall (O) 1,471
Five Sentry Parkway East (O).. 873
Five Sentry Parkway West (O).. 354
FAIRFIELD COUNTY, CONNECTICUT
GREENWICH
500 West Putnam Avenue (O).... 1,403
NORWALK
40 Richards Avenue (O)........ 1,204
SHELTON
1000 Bridgeport Avenue (O).... 1,379
STAMFORD
419 West Avenue (F)........... 921
500 West Avenue (F)........... 196
550 West Avenue (F)........... 542
600 West Avenue (F)........... 92
650 West Avenue (F)........... 393
WASHINGTON, D.C.
1201 Connecticut Avenue, NW (O) 658
1400 L Street, NW (O)......... 1,878
1709 New York Avenue, NW (O).. 2,067
PRINCE GEORGE'S COUNTY, MARYLAND
LANHAM
4200 Parliament Place (O)..... 913
BEXAR COUNTY, TEXAS
SAN ANTONIO
200 Concord Plaza Drive (O)... 2,284
84 N.E. Loop 410 (O).......... 750
1777 N.E. Loop 410 (O)........ 1,030
111 Soledad (O)............... 633
COLLIN COUNTY, TEXAS
PLANO
555 Republic Place (O)........ 339
DALLAS COUNTY, TEXAS
DALLAS
3030 LBJ Freeway (O).......... 2,228
3100 Monticello (O)........... 899
8214 Westchester (O).......... 558
IRVING
2300 Valley View (O).......... 694
RICHARDSON
1122 Alma Road (O)............ 242
HARRIS COUNTY, TEXAS
HOUSTON
10497 Town & Country Way (O).. 549
99
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED ---------------------------
YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND
PROPERTY LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL
- --------------------- ----- -------- ------------ ---- ------------ -------------- ---- ------------ -----
14511 Falling Creek (O)....... 1982 1997 -- 434 1,738 341 434 2,079 2,513
5225 Katy Freeway (O)......... 1983 1997 -- 1,403 5,610 831 1,403 6,441 7,844
5300 Memorial (O)............. 1982 1997 -- 1,283 7,269 279 1,710 7,121 8,831
1717 St. James Place (O)...... 1975 1997 -- 909 3,636 346 909 3,982 4,891
1770 St. James Place (O)...... 1973 1997 -- 730 2,920 412 730 3,332 4,062
TARRANT COUNTY, TEXAS
EULESS
150 West Park Way (O)......... 1984 1997 -- 852 3,410 139 852 3,549 4,401
MARICOPA COUNTY, ARIZONA
GLENDALE
5551 West Talavi Boulevard (O) 1991 1997 6,717 2,732 10,927 5,744 3,593 15,810 19,403
PHOENIX
19640 North 31st Street (O)... 1990 1997 7,112 3,437 13,747 4 3,437 13,751 17,188
SCOTTSDALE
9060 E. Via Linda Boulevard (O) 1984 1997 -- 3,720 14,879 -- 3,720 14,879 18,599
ARAPAHOE COUNTY, COLORADO
AURORA
750 South Richfield Street (O) 1997 1998 -- 2,680 23,125 27 2,682 23,150 25,832
DENVER
400 South Colorado Boulevard (O) 1983 1998 -- 1,461 10,620 480 1,461 11,100 12,561
ENGLEWOOD
9359 East Nichols Avenue (O).. 1997 1998 -- 1,155 8,171 (444) 1,155 7,727 8,882
5350 South Roslyn Street (O).. 1982 1998 -- 862 6,831 193 862 7,024 7,886
BOULDER COUNTY, COLORADO
BROOMFIELD
105 South Technology Court (O) 1997 1998 653 4,936 14 653 4,950 5,603
303 South Technology Court-A (O) 1997 1998 -- 623 3,892 5 623 3,896 4,520
303 South Technology Court-B (O) 1997 1998 -- 623 3,892 4 623 3,897 4,519
LOUISVILLE
1172 Century Drive (O)........ 1996 1998 -- 707 4,647 101 707 4,748 5,455
248 Centennial Parkway (O).... 1996 1998 -- 708 4,647 102 708 4,749 5,457
285 Century Place (O)......... 1997 1998 -- 889 10,133 23 891 10,154 11,045
DENVER COUNTY, COLORADO
DENVER
3600 South Yosemite (O)....... 1974 1998 -- 556 12,980 28 556 13,008 13,564
DOUGLAS COUNTY, COLORADO
ENGLEWOOD
67 Inverness Drive East (O)... 1996 1998 -- 1,034 5,516 18 1,035 5,533 6,568
384 Inverness Drive South (O). 1985 1998 -- 703 5,653 162 703 5,815 6,518
400 Inverness Drive (O)....... 1997 1998 -- 1,584 19,878 (896) 1,584 18,982 20,566
5975 South Quebec Street (O).. 1996 1998 -- 855 11,551 146 857 11,695 12,552
PARKER
9777 Pyramid Court (O)........ 1995 1998 -- 1,304 13,189 26 1,306 13,213 14,519
ACCUMULATED
PROPERTY LOCATION (2) DEPRECIATION
- --------------------- ------------
14511 Falling Creek (O)....... 153
5225 Katy Freeway (O)......... 524
5300 Memorial (O)............. 494
1717 St. James Place (O)...... 319
1770 St. James Place (O)...... 276
TARRANT COUNTY, TEXAS
EULESS
150 West Park Way (O)......... 299
MARICOPA COUNTY, ARIZONA
GLENDALE
5551 West Talavi Boulevard (O) 1,127
PHOENIX
19640 North 31st Street (O)... 1,047
SCOTTSDALE
9060 E. Via Linda Boulevard (O) 1,132
ARAPAHOE COUNTY, COLORADO
AURORA
750 South Richfield Street (O) 1,601
DENVER
400 South Colorado Boulevard (O) 764
ENGLEWOOD
9359 East Nichols Avenue (O).. 551
5350 South Roslyn Street (O).. 532
BOULDER COUNTY, COLORADO
BROOMFIELD
105 South Technology Court (O) 349
303 South Technology Court-A (O) 293
303 South Technology Court-B (O) 293
LOUISVILLE
1172 Century Drive (O)........ 356
248 Centennial Parkway (O).... 355
285 Century Place (O)......... 684
DENVER COUNTY, COLORADO
DENVER
3600 South Yosemite (O)....... 876
DOUGLAS COUNTY, COLORADO
ENGLEWOOD
67 Inverness Drive East (O)... 415
384 Inverness Drive South (O). 428
400 Inverness Drive (O)....... 1,323
5975 South Quebec Street (O).. 856
PARKER
9777 Pyramid Court (O)........ 980
100
MACK-CALI REALTY CORPORATION
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
SCHEDULE III
GROSS AMOUNT AT WHICH
CARRIED AT CLOSE OF
INITIAL COSTS COSTS PERIOD (1)
------------------ CAPITALIZED ---------------------------
YEAR RELATED BUILDING AND SUBSEQUENT BUILDING AND
PROPERTY LOCATION (2) BUILT ACQUIRED ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL
- --------------------- ----- -------- ------------ ---- ------------ -------------- ---- ------------ -----
EL PASO COUNTY, COLORADO
COLORADO SPRINGS
8415 Explorer (O)............. 1998 1999 -- 347 2,507 3,015 348 5,521 5,869
1975 Research Parkway (O)..... 1997 1998 -- 1,397 13,221 2,887 1,611 15,894 17,505
2375 Telstar Drive (O)........ 1998 1999 -- 348 2,507 3,014 348 5,521 5,869
JEFFERSON COUNTY, COLORADO
LAKEWOOD
141 Union Boulevard (O)....... 1985 1998 -- 774 6,891 558 775 7,448 8,223
SAN FRANCISCO COUNTY, CALIFORNIA
SAN FRANCISCO
795 Folsom Street (O)......... 1977 1999 -- 9,348 24,934 5,692 9,348 30,626 39,974
760 Market Street (O)......... 1908 1997 -- 5,588 22,352 38,717 13,499 53,158 66,657
HILLSBOROUGH COUNTY, FLORIDA
TAMPA
501 Kennedy Boulevard (O)..... 1982 1997 -- 3,959 15,837 1,516 3,959 17,353 21,312
POLK COUNTY, IOWA
WEST DES MOINES
2600 Westown Parkway (O)...... 1988 1997 -- 1,708 6,833 236 1,708 7,069 8,777
PROJECTS UNDER DEVELOPMENT.... -- 73,637 -- 83,475 73,637 83,475 157,112
FURNITURE, FIXTURES & EQUIPMENT -- -- -- 6,460 -- 6,460 6,460
- --------------------------------------------------------------------------------------------------------------------------------
TOTALS $478,187 $545,706 $2,692,501 $466,147 $561,210 $3,143,144 $3,704,354
================================================================================================================================
ACCUMULATED
PROPERTY LOCATION (2) DEPRECIATION
- --------------------- ------------
EL PASO COUNTY, COLORADO
COLORADO SPRINGS
8415 Explorer (O)............. 194
1975 Research Parkway (O)..... 1,047
2375 Telstar Drive (O)........ 194
JEFFERSON COUNTY, COLORADO
LAKEWOOD
141 Union Boulevard (O)....... 590
SAN FRANCISCO COUNTY, CALIFORNIA
SAN FRANCISCO
795 Folsom Street (O)......... 1,528
760 Market Street (O)......... 3,654
HILLSBOROUGH COUNTY, FLORIDA
TAMPA
501 Kennedy Boulevard (O)..... 1,312
POLK COUNTY, IOWA
WEST DES MOINES
2600 Westown Parkway (O)...... 604
PROJECTS UNDER DEVELOPMENT.... --
FURNITURE, FIXTURES & EQUIPMENT 2,673
- -----------------------------------------------
TOTALS $309,951
===============================================
(1) The aggregate cost for federal income tax purposes at December 31, 2000 was
approximately $2.78 billion.
(2) LEGEND OF PROPERTY CODES:
------------------------
(O)=Office Property (M)=Multi-family Residential Property
(F)=Office/Flex Property (R)=Stand-alone Retail Property
(I)=Industrial/Warehouse Property (L)=Land Lease
101
MACK-CALI REALTY CORPORATION
NOTE TO SCHEDULE III
Changes in rental properties and accumulated depreciation for the periods
ended December 31, 2000, 1999 and 1998 are as follows:
2000 1999 1998
---- ---- ----
RENTAL PROPERTIES
Balance at beginning of year $3,654,845 $3,467,799 $2,629,616
Additions 268,900 204,565 838,183
Retirements/Disposals (219,391) (17,519) --
---------- ---------- ----------
Balance at end of year $3,704,354 $3,654,845 $3,467,799
========== ========== ==========
ACCUMULATED DEPRECIATION
Balance at beginning of year $ 256,629 $ 177,934 $ 103,133
Depreciation expense 82,574 81,730 74,801
Retirements/Disposals (29,252) (3,035) --
---------- ---------- ----------
Balance at end of year $ 309,951 $ 256,629 $ 177,934
========== ========== ==========
102
MACK-CALI REALTY CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mack-Cali Realty Corporation
----------------------------
(Registrant)
Date: February 22, 2001 By: /s/ BARRY LEFKOWITZ
-------------------------
Barry Lefkowitz
Executive Vice President &
Chief Financial 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:
NAME TITLE DATE
---- ----- ----
/s/ WILLIAM L. MACK Chairman of the Board February 22, 2001
- ----------------------------------
William L. Mack
/s/ MITCHELL E. HERSH Chief Executive Officer February 22, 2001
- ---------------------------------- and Director
Mitchell E. Hersh
/s/ BARRY LEFKOWITZ Executive Vice President and February 22, 2001
- ---------------------------------- Chief Financial Officer
Barry Lefkowitz
/s/ JOHN J. CALI Director February 22, 2001
- ----------------------------------
John J. Cali
/s/ MARTIN S. BERGER Director February 22, 2001
- ----------------------------------
Martin S. Berger
/s/ BRENDAN T. BYRNE Director February 22, 2001
- ----------------------------------
Brendan T. Byrne
/s/ JOHN R. CALI Director February 22, 2001
- ----------------------------------
John R. Cali
/s/ NATHAN GANTCHER Director February 22, 2001
- ----------------------------------
Nathan Gantcher
103
NAME TITLE DATE
---- ----- ----
/s/ MARTIN D. GRUSS Director February 22, 2001
- ----------------------------------
Martin D. Gruss
/s/ EARLE I. MACK Director February 22, 2001
- ----------------------------------
Earle I. Mack
/s/ ALAN G. PHILIBOSIAN Director February 22, 2001
- ----------------------------------
Alan G. Philibosian
/s/ IRVIN D. REID Director February 22, 2001
- ----------------------------------
Irvin D. Reid
/s/ VINCENT TESE Director February 22, 2001
- ----------------------------------
Vincent Tese
/s/ ROY J. ZUCKERBERG Director February 22, 2001
- ----------------------------------
Roy J. Zuckerberg
104
MACK-CALI REALTY CORPORATION
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ -------------
3.1 Restated Charter of Mack-Cali Realty Corporation dated June 2, 1999,
together with Articles Supplementary thereto (filed as Exhibit 3.1
to the Company's Form 8-K dated June 10, 1999 and as Exhibit 4.2 to
the Company's Form 8-K dated July 6, 1999 and each incorporated
herein by reference).
3.2 Amended and Restated Bylaws of Mack-Cali Realty Corporation dated
June 10, 1999 (filed as Exhibit 3.2 to the Company's Form 8-K dated
June 10, 1999 and incorporated herein by reference).
3.3 Second Amended and Restated Agreement of Limited Partnership dated
December 11, 1997, for Mack-Cali Realty, L.P. (filed as Exhibit
10.110 to the Company's Form 8-K dated December 11, 1997 and
incorporated herein by reference).
3.4 Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of Mack-Cali Realty, L.P. (filed as Exhibit 3.1
to the Company's Registration Statement on Form S-3, Registration
No. 333-57103, and incorporated herein by reference).
3.5 Second Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Mack-Cali Realty, L.P. (filed as Exhibit 10.2
to the Company's Form 8-K dated July 6, 1999 and incorporated herein
by reference).
4.1 Amended and Restated Shareholder Rights Agreement, dated as of March
7, 2000, between Mack-Cali Realty Corporation and EquiServe Trust
Company, N.A., as Rights Agent (filed as Exhibit 4.1 to the
Company's Form 8-K dated March 7, 2000 and incorporated herein by
reference).
4.2 Amendment No. 1 to the Amended and Restated Shareholder Rights
Agreement, dated as of June 27, 2000, by and among Mack-Cali Realty
Corporation and Equiserve Trust Company, N.A. (filed as Exhibit 4.1
to the Company's Form 8-K dated June 27, 2000).
4.3 Indenture dated as of March 16, 1999, by and among Mack-Cali Realty,
L.P., as issuer, Mack-Cali Realty Corporation, as guarantor, and
Wilmington Trust Company, as trustee (filed as Exhibit 4.1 to the
Company's Form 8-K dated March 16, 1999 and incorporated herein by
reference).
4.4 Supplemental Indenture No. 1 dated as of March 16, 1999, by and
among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
Company, as trustee (filed as Exhibit 4.2 to the Company's Form 8-K
dated March 16, 1999 and incorporated herein by reference).
105
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ -------------
4.5 Supplemental Indenture No. 2 dated as of August 2, 1999, by and
among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
Company, as trustee (filed as Exhibit 4.4 to the Company's Form 10-Q
dated June 30, 1999 and incorporated herein by reference).
4.6 Supplemental Indenture No. 3 dated as of December 21, 2000, by and
among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
Company, as trustee (filed as Exhibit 4.2 to the Company's Form 8-K
dated December 21, 2000 and incorporated herein by reference).
4.7 Supplemental Indenture No. 4 dated as of January 29, 2001, by and
among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust
Company, as trustee (filed as Exhibit 4.2 to the Company's Form 8-K
dated January 29, 2001 and incorporated herein by reference).
10.1 Amended and Restated Employment Agreement dated as of July 1, 1999
between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as
Exhibit 10.2 to the Company's Form 10-Q dated June 30, 1999 and
incorporated herein by reference).
10.2 Second Amended and Restated Employment Agreement dated as of July 1,
1999 between Timothy M. Jones and Mack-Cali Realty Corporation
(filed as Exhibit 10.3 to the Company's Form 10-Q dated June 30,
1999 and incorporated herein by reference).
10.3 Second Amended and Restated Employment Agreement dated as of July 1,
1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed
as Exhibit 10.6 to the Company's Form 10-Q dated June 30, 1999 and
incorporated herein by reference).
10.4 Second Amended and Restated Employment Agreement dated as of July 1,
1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed
as Exhibit 10.7 to the Company's Form 10-Q dated June 30, 1999 and
incorporated herein by reference).
*10.5 Employment Agreement dated as of December 5, 2000 between Michael
Grossman and Mack-Cali Realty Corporation.
10.6 Restricted Share Award Agreement dated as of July 1, 1999 between
Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit
10.8 to the Company's Form 10-Q dated June 30, 1999 and incorporated
herein by reference).
10.7 Restricted Share Award Agreement dated as of July 1, 1999 between
Timothy M. Jones and Mack-Cali Realty Corporation (filed as Exhibit
10.9 to the Company's Form 10-Q dated June 30, 1999 and incorporated
herein by reference).
10.8 Restricted Share Award Agreement dated as of July 1, 1999 between
Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit
10.12 to the Company's Form 10-Q dated June 30, 1999 and
incorporated herein by reference).
10.9 Restricted Share Award Agreement dated as of July 1, 1999 between
Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit
10.13 to the Company's Form 10-Q dated June 30, 1999 and
incorporated herein by reference).
106
EXHIBIT
NUMBER EXHIBIT TITLE
- ------ -------------
*10.10 Amendment No. 3 to and Restatement of Revolving Credit Agreement
dated as of June 22, 2000, by and among Mack-Cali Realty, L.P. and
The Chase Manhattan Bank, Fleet National Bank and Other Lenders
Which May Become Parties Thereto with The Chase Manhattan Bank, as
administrative agent, Fleet National Bank, as syndication agent,
Bank of America, N.A., as documentation agent, Chase Securities Inc.
and FleetBoston Robertson Stephens Inc., as arrangers, Bank One,
N.A., First Union National Bank and Commerzbank Aktiengesellschaft,
as senior managing agents, PNC Bank National Association, as
managing agent, and Societe Generale, Dresdner Bank AG, Wells Fargo
Bank, National Association, Bank Austria Creditanstalt Corporate
Finance, Inc., Bayerische Hypo-und Vereinsbank and Summit Bank, as
co-agents.
10.11 Contribution and Exchange Agreement among The MK Contributors, The
MK Entities, The Patriot Contributors, The Patriot Entities, Patriot
American Management and Leasing Corp., Cali Realty, L.P. and Cali
Realty Corporation, dated September 18, 1997 (filed as Exhibit 10.98
to the Company's Form 8-K dated September 19, 1997 and incorporated
herein by reference).
10.12 First Amendment to Contribution and Exchange Agreement, dated as of
December 11, 1997, by and among the Company and the Mack Group
(filed as Exhibit 10.99 to the Company's Form 8-K dated December 11,
1997 and incorporated herein by reference).
10.13 Termination and Release Agreement, dated September 21, 2000, by and
among Mack-Cali Realty Corporation, Mack-Cali Realty, L.P., Prentiss
Properties Trust and Prentiss Properties Acquisition Partners, L.P.
(filed as Exhibit 10.1 to the Company's Form 8-K dated September 21,
2000 and incorporated herein by reference).
10.14 2000 Employee Stock Option Plan (filed as Exhibit B to the Company's
Proxy Statement for its Annual Meeting of Stockholders held on
September 11, 2000 and incorporated herein by reference).
10.15 2000 Director Stock Option Plan (filed as Exhibit C to the Company's
Proxy Statement for its Annual Meeting of Stockholders held on
September 11, 2000 and incorporated herein by reference).
*21 Subsidiaries of the Company.
*23 Consent of PricewaterhouseCoopers LLP, independent accountants.
- ----------------------
*filed herewith
107