1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
__________________
Commission File Number 1-13102
Date of Report (date of earliest event reported): FEBRUARY 12, 1997
FIRST INDUSTRIAL REALTY TRUST, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 36-3935116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 N. WACKER DRIVE, SUITE 150, CHICAGO, ILLINOIS 60606
(Address of principal executive offices)
(312) 704-9000
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 31, 1997, First Industrial Realty Trust, Inc. and its
subsidiaries (the "Company"), through First Industrial, L.P., of which the
Company is the sole general partner, acquired 10 bulk warehouse and 29 light
industrial properties (the "Properties") in Long Island, New York and northern
New Jersey totaling 2.7 million square feet of gross leasable area (the
"Lazarus Burman Acquisition"). The Properties were purchased for approximately
$138.8 million which was funded with $86.4 million in cash, assumption of $4.5
million in debt and the issuance of 1,595,282 limited partnership units in
First Industrial, L.P. ("Units") valued at $47.9 million. The properties were
acquired from Lazarus Burman Associates, Jan Burman Management Co., Jerry
Lazarus Management Co., Connie Lazarus Management Co., Red Ground Co., Junie
Investors Co., 109 Industrial Co., LLC, L.B. Management Co., JDHL Co., Susieco
Co., Laz-Bur Company, SJB Realty Company, C4-6-7 Company, C3-5 Company, 290
Industrial Co., LLC, 185 Price Parkway, LLC and 116 Le High Industrial Co.,
LLC. (together the "Lazarus Burman Group"). Prior to the acquisition, the
Lazarus Burman Group was not affiliated with the Company, any affiliate of the
Company or any director of officer of the Company. Following the acquisition,
Jan Burman was appointed Senior Regional Director. The Properties will
continue to be used for bulk warehouse and light industrial use under the
existing lease terms.
In connection with the Lazarus Burman Acquisition, the Company, through
First Industrial, L.P. assumed existing indebtedness under two mortgage loans
with Patomi Realty Co. and Smithkline Beecham Clinical Laboratories, Inc.
totaling $3.8 million and $.7 million, respectively, issued Units with an
aggregate value of $47.9 million and borrowed $86.4 million under the Company's
$200 million unsecured revolving credit facility with a group of banks for
which the First National Bank of Chicago is the agent (the "1996 Acquisition
Facility"). The $3.8 million mortgage loan bears interest at 10%. The $.7
million mortgage loan is interest free until February 1998 at which time the
mortgage loan bears interest at 8%. The $86.4 million borrowed under the
Company's 1996 Acquisition Facility currently bears interest at LIBOR plus
1.10%.
ITEM 5. OTHER EVENTS
Since the filing of the Company's Form 8-K/A No. 1 dated March 20,
1996, the Company acquired 65 industrial properties and four land parcels for
future development from unrelated parties during the period April 11, 1996
through January 9, 1997, the closing date of the last property acquired. The
combined purchase price for these properties and land parcels totaled
approximately $146.2 million, excluding development costs incurred subsequent
to the acquisition of the land parcels and closings costs incurred in
conjunction with the acquisition of the properties and the land parcels. The
65 properties and four land parcels acquired are described below and were
funded with working capital, proceeds from a public offering of 5,750,000
shares of Common stock, the issuance Units, and borrowings under the Company's
$150 million secured revolving credit facility (the "1994 Acquisition
Facility") or the 1996 Acquisition Facility which replaced the 1994 Acquisition
Facility on December 16, 1996. The Company has continued the pre-acquisition
uses of the properties. With respect to the properties currently under
development, the Company intends to operate the facilities as industrial rental
property.
- On June 19, 1996, the Company purchased a 327,997 square foot
bulk warehouse property located in Indianapolis, Indiana for
approximately $5.6 million. The property was purchased from the
Cummins Engine Company, Inc.
- On June 25, 1996, the Company purchased a 78,000 square foot
light industrial property located in Milwaukee, Wisconsin. The
purchase price for the property was approximately $2.5 million. The
property was purchased from Stowell Industries, Inc.
- On June 26, 1996, the Company purchased a 78,029 square foot
light industrial property located in Chaska, Minnesota. The purchase
price for the property was approximately $2.7 million. The property
was purchased from Aeration Industries International, Inc. This
property was owner occupied prior to purchase.
- On June 28, 1996, the Company purchased four light industrial
properties totaling 180,000 square feet located in Dayton, Ohio. The
purchase price for the properties was approximately $5.0 million
which was funded with $3.0 million in cash and 84,500 Units valued at
approximately $2.0 million in the aggregate. The properties were
purchased from Trotwood Industrial Park.
- On July 9, 1996, the Company purchased a 125,950 square foot
bulk warehouse property located in Bloomington, Minnesota for
approximately $3.5 million. The property was purchased from Bethany
Corporation, Ltd.
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- On July 10, 1996, the Company purchased for approximately $2.7
million, approximately 10.7 acres of land in Detroit, Michigan where
a 140,365 square foot bulk warehouse facility is currently under
construction. The land was purchased from Hygrade Food Products
Company.
- On July 24, 1996, the Company purchased a 70,560 square foot
light industrial property located in Indianapolis, Indiana. The
purchase price for the property was approximately $1.4 million. The
property was purchased from Pin Oak Properties, L.P.
- On August 16, 1996, the Company purchased a 42,300 square foot
light industrial property located in Plymouth Township, Michigan.
The purchase price for the property was approximately $1.7 million.
The property was purchased from Chris A. Kindred and Patti R.
Kindred. This property was owner occupied prior to purchase.
- On September 12, 1996, the Company purchased a 84,000 square
foot light industrial property located in Dayton, Ohio. The purchase
price for the property was approximately $1.8 million which was
funded with $1.1 million in cash and 29,056 Units valued at
approximately $.7 million. The property was purchased from Trotwood
Industrial Park.
- On September 30, 1996, the Company purchased for approximately
$7.8 million approximately 11.3 acres of land in Minneapolis,
Minnesota which included a partially completed 172,800 square foot
bulk warehouse. The Company is continuing the construction of this
bulk warehouse. The land and partially completed bulk warehouse was
purchased from Ryan Construction Company of Minnesota, Inc.
- On September 30, 1996, the Company purchased a 97,770 square
foot light industrial property located in Plymouth, Minnesota. The
purchase price of the property was approximately $3.0 million. The
property was purchased from Greenland Investment Company.
- On September 30, 1996, the Company purchased a 83,189 square
foot light industrial property located in Eden Prairie, Minnesota.
The purchase price of the property was approximately $3.5 million.
The property was purchased from CB Institutional Fund VIII.
- On September 30, 1996, the Company purchased two bulk warehouse
properties totaling 1,110,300 square feet in Columbus, Ohio for
approximately $21.8 million which was funded with $11.3 million in
cash, incurrence of $9.9 million in Promissory Notes bearing interest
at 8%, and 24,789 Units valued at $.6 million in the aggregate. The
properties were purchased from Lockborne Industrial Associates and
Groveport Road Associates.
- On October 4, 1996, the Company purchased a 187,777 square foot
light industrial property located in Eden Prairie, Minnesota. The
purchase price for the property was approximately $7.5 million. The
property was purchased from Grandchildren's Realty Alternative
Management Program I Limited Partnership. This property was owner
occupied prior to purchase.
- On October 8, 1996, the Company purchased a 102,500 square foot
light industrial property located in Cleveland, Ohio. The purchase
price for the property was approximately $3.7 million. The property
was purchased from Koenig Properties. This property was owner
occupied prior to purchase.
- On October 28, 1996, the Company purchased three bulk warehouse
properties totaling 538,811 square feet located in Portland,
Tennessee for approximately $12.8 million. The properties were
purchased from Wanda and Larry Collins.
- On October 28, 1996, the Company purchased a 51,960 square foot
light industrial property located in Wauwatosa, Wisconsin. The
purchase price for the property was approximately $2.0 million. The
property was purchased from Harvey Property Associates.
- On October 30, 1996, the Company purchased five light
industrial properties totaling 295,400 square feet located in
Indianapolis, Indiana. The aggregate purchase price for the
properties was approximately $7.9 million. The properties were
purchased from Kern County Employees' Retirement Association.
- On October 31, 1996, the Company purchased for approximately
$.1 million approximately 1 acre of land in Indianapolis, Indiana
where a 10,000 square foot bulk warehouse is currently under
construction. The land was purchased from Shadeland Associates
Limited Partnership.
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- On November 14, 1996, the Company purchased 23 bulk warehouse
properties totaling 654,095 square feet located in Romulus, Michigan
for approximately $19.7 million which was funded with $11.2 in cash
and 325,068 Units valued at $8.5 million in the aggregate. The
properties were purchased from the Highland Industrial Development
Company.
- On December 2, 1996, the Company purchased two light industrial
properties totaling 150,536 square feet in Atlanta, Georgia. The
aggregate purchase price for these properties was approximately $3.5
million. The properties were purchased from the John Hancock Realty
Income Fund - II Limited Partnership.
- On December 13, 1996, the Company purchased for approximately
$.5 million approximately 7.8 acres of land in suburban Cincinnati,
Ohio where a 112,500 square foot light industrial warehouse is
currently under construction. The land was purchased from A.L.
Neyer, Inc.
- On December 18, 1996, the Company purchased two light
industrial properties totaling 125,000 square feet in St. Louis,
Missouri. The aggregate purchase price for these properties was
approximately $2.7 million. The properties were purchased from the
McDonnell Douglas Corporation. These properties were owner occupied
prior to purchase.
- On December 24, 1996, the Company purchased five light
industrial properties totaling 111,375 square feet in Cincinnati,
Ohio. The aggregate purchase price for these properties was
approximately $3.1 million. The properties were purchased from the
Equitable Life Assurance Society of the United States.
- On December 24, 1996, the Company purchased two light
industrial properties totaling 72,239 square feet in Eden Prairie,
Minnesota. The aggregate purchase price for these properties was
approximately $2.6 million. The properties were purchased from the
Equitable Life Assurance Society of the United States.
- On December 31, 1996, the Company purchased a 48,000 square
foot bulk warehouse property located in Atlanta, Georgia for
approximately $1.0 million. The property was purchased from Gary
Leeman. This property was owner occupied prior to purchase.
- On December 31, 1996, the Company purchased two bulk warehouse
properties totaling 409,119 square feet located in Atlanta, Georgia
for approximately $6.6 million. The properties were purchased from
the Equitable Life Assurance Society of the United States.
- On December 31, 1996, the Company purchased an 80,000 square
foot light industrial property located in Minneapolis, Minnesota.
The purchase price for the property was approximately $2.4 million.
The property was purchased from the Valley Industrial Center 3
Limited Partnership.
- On January 9, 1997, the Company purchased a 482,400 square
foot bulk warehouse property located in Indianapolis, Indiana for
approximately $7.1 million. The property was purchased from 4430
Airport Associated, Limited Partnership.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Combined Historical Statements of Revenues and Certain Expenses for the
1996 and 1997 Acquisition Properties - Unaudited.
Combined Historical Statements of Revenues and Certain Expenses for the
Acquisition Properties and Notes thereto with Independent Accountants' Report
thereon dated February 11, 1997.
At this time it is impracticable to file the required financial statements
for the Lazarus Burman Acquisition described in Item 2 of this Form 8-K. The
required financial statements will be filed in an amendment to this report on
Form 8-K as soon as possible, but not later than sixty (60) days from the date
on which this Form 8-K is filed.
(b) Pro Forma Financial Information:
Pro Forma Statement of Operations for the Nine Months Ended September 30,
1996
Pro Forma Statement of Operations for the Twelve Months Ended December 31,
1995
At this time it is impracticable to file the required pro forma financial
information related to the Lazarus Burman Acquisition described in Item 2 of
this Form 8-K. The required financial statements and pro forma financial
information will be filed in an amendment to this report on Form 8-K as soon
as possible, but not later than sixty (60) days from the date on which this
report on Form 8-K is required to be filed.
(c). Exhibits.
Exhibit Number Description
-------------- ------------------------------------
23 Consent of Coopers & Lybrand L.L.P.,
Independent Accountants
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INDEX TO FINANCIAL STATEMENTS
PAGE
1996 AND 1997 ACQUISITION PROPERTIES
Combined Historical Statements of Revenues and
Certain Expenses for the 1996 and 1997 Acquisition
Properties for the nine months ended September 30,
1996 and the twelve months ended December 31, 1995
--Unaudited...................................................... 6
ACQUISITION PROPERTIES
Report of Independent Accountants................................ 7
Combined Historical Statements of Revenues and
Certain Expenses for the Nine Months Ended September
30, 1996 and for the Twelve Months Ended December 31,
1995............................................................. 8
Notes to Combined Historical Statements of Revenues and
Certain Expenses................................................. 9-10
PRO FORMA FINANCIAL INFORMATION
Pro Forma Statement of Operations for the Nine Months Ended
September 30, 1996.............................................. 11-12
Notes to Pro Forma Financial Statements.......................... 13-14
Pro Forma Statement of Operations for the Twelve Months Ended
December 31, 1995................................................ 15-16
Notes to Pro Forma Financial Statements.......................... 17-18
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1996 AND 1997 ACQUISITION PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
The Combined Historical Statements of Revenues and Certain Expenses as
shown below, present the summarized results of operations of the 43 properties
acquired during the period April 11, 1996 through December 31, 1996 ( the "1996
Acquisition Properties") and the one property acquired during the period
January 1, 1997 through January 9, 1997 (the "1997 Acquisition Property").
These statements are exclusive of 14 properties acquired by the Company (the
"Acquisition Properties"), which have been audited and are included elsewhere
in this Form 8-K and properties occupied by the previous owner during the
period April 11, 1996 through January 9, 1997. The 1996 Acquisition Properties
and the 1997 Acquisition Property were acquired for an aggregate purchase price
of approximately $79.8 million. A description of each property is included in
Item 5.
FOR THE NINE FOR THE NINE FOR THE TWELVE
MONTHS ENDED MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1996 DECEMBER 31, 1995
---------------------- ----------------------- -------------------------
1997 ACQUISITION 1996 ACQUISITION 1996 ACQUISITION
PROPERTY PROPERTIES PROPERTIES
(UNAUDITED) (UNAUDITED) (UNAUDITED)
---------------------- ----------------------- -------------------------
Revenues:
Rental Income........................... $711 $7,082 $8,600
Tenant Recoveries and Other Income...... 158 958 1,199
--------------------- ----------------------- -------------------------
Total Revenues...................... 869 8,040 9,799
--------------------- ----------------------- -------------------------
Expenses:
Real Estate Taxes....................... 125 1,255 1,587
Repairs and Maintenance................. 47 473 368
Property Management..................... 23 323 403
Utilities............................... 101 33 31
Insurance............................... 7 63 87
Other................................... --- 2 8
---------------------- ------------------------ -------------------------
Total Expenses...................... 296 2,149 2,484
---------------------- ------------------------ -------------------------
Revenues in Excess of Certain Expenses.. $573 $5,891 $7,315
====================== ======================== =========================
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
First Industrial Realty Trust, Inc.
We have audited the accompanying combined historical statement of revenues
and certain expenses of the Acquisition Properties as described in Note 1 for
the year ended December 31, 1995. This financial statement is the
responsibility of the Acquisition Properties' management. Our responsibility
is to express an opinion on this financial statement based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
The accompanying combined historical statement of revenues and certain
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission for inclusion in the Form
8-K of First Industrial Realty Trust, Inc. and is not intended to be a complete
presentation of the Acquisition Properties' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the Acquisition
Properties for the year ended December 31, 1995 in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
February 11, 1997
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ACQUISITION PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
FOR THE NINE FOR THE TWELVE
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, 1996 DECEMBER 31, 1995
-------------------- --------------------
ACQUISITION
PROPERTIES ACQUISITION
(UNAUDITED) PROPERTIES
-------------------- --------------------
Revenues:
Rental Income................................................... $3,047 $4,128
Tenant Recoveries and Other Income.............................. 452 456
-------------------- --------------------
Total Revenues................................................ 3,499 4,584
-------------------- --------------------
Expenses:
Real Estate Taxes............................................... 538 706
Repairs and Maintenance......................................... 116 131
Property Management............................................. 111 149
Utilities....................................................... 63 43
Insurance....................................................... 46 63
Other........................................................... -- 57
-------------------- --------------------
Total Expenses................................................ 874 1,149
-------------------- --------------------
Revenues in Excess of Certain Expenses........................... $2,625 $3,435
=================== ====================
The accompanying notes are an integral part of the financial
statements.
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ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION.
The Combined Historical Statements of Revenues and Certain Expenses (the
"Statements") combine the results of operations of 14 properties acquired by
First Industrial Realty Trust, Inc. and its subsidiaries (the "Company") during
the period April 11, 1996 through January 9, 1997, the closing date of the last
property acquired (the "Acquisition Properties"). The Acquisition Properties
were acquired for an aggregate purchase price of approximately $36.0 million.
SQUARE
# OF FEET DATE DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) ACQUIRED HISTORY COMMENCED
- ----------------- ------------------------ --------- -----------------
Dayton, OH 4 180,000 June 28, 1996 January 1, 1995
Bloomington, MN 1 125,950 July 9, 1996 January 1, 1995
Columbus, OH 2 1,110,300 September 30,1996 January 1, 1995
Cincinnati, OH 5 111,375 December 24, 1996 January 1, 1995
Eden Prairie, MN 2 72,239 December 24, 1996 January 1, 1995
------------------------
TOTAL 14 1,599,864
========================
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the nine month period ended September 30, 1996 reflects, in the
opinion of management, all adjustments necessary for a fair presentation of the
interim statement. All such adjustments are of a normal and recurring nature.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The Statements exclude certain expenses such as interest, depreciation and
amortization, professional fees, and other costs not directly related to the
future operations of the Acquisition Properties that may not be comparable to
the expenses expected to be incurred in their proposed future operations.
Management is not aware of any material factors relating to these properties
which would cause the reported financial information not to be necessarily
indicative of future operating results.
In order to conform with generally accepted accounting principles,
management, in preparation of the Combined Historical Statements of Revenues
and Certain Expenses, is required to make estimates and assumptions that affect
the reported amounts of revenues and certain expenses during the reporting
period. Actual results could differ from these estimates.
Revenue and Expense Recognition
The Statements have been prepared on the accrual basis of accounting.
Rental income is recorded when due from tenants. The effects of scheduled
rent increases and rental concessions, if any, are recognized on a
straight-line basis over the term of the tenant's lease.
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ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The Acquisition Properties are leased to tenants under net and semi-net
operating leases. Minimum lease payments receivable, excluding tenant
reimbursement of expenses, under noncancelable operating leases in effect as of
December 31, 1995 are approximately as follows:
Acquisition
Properties
-----------
1996 $4,105
1997 4,284
1998 5,551
1999 2,492
2000 1,466
Thereafter 514
----------
Total $18,412
==========
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FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Other
First Pro Forma Acquisition
Industrial First Adjustments Other Properties and
Realty Trust, Highland First Acquisition Other Pro
Inc. Properties Highland Properties Forma Subtotal
(Historical) (Historical) Properties (Historical) Adjustments Carry
Note 2 (a) Note 2 (b) Note 2 (c) Subtotal Note 2 (d) Note 2 (e) Forward
------------- ------------ ----------- -------- ------------- ------------- --------
REVENUES:
Rental Income.................. $ 78,054 $1,915 $ --- $ 79,969 $ 1,029 $ --- $ 80,998
Tenant Recoveries and
Other Income.................. 23,545 182 --- 23,727 218 --- 23,945
--------- ------ ------- -------- --------- --------- --------
Total Revenues.............. 101,599 2,097 --- 103,696 1,247 --- 104,943
--------- ------ ------- -------- --------- --------- --------
EXPENSES:
Real Estate Taxes.............. 17,061 213 --- 17,274 237 --- 17,511
Repairs and Maintenance........ 4,231 134 --- 4,365 45 --- 4,410
Property Management............ 3,657 86 --- 3,743 40 --- 3,783
Utilities...................... 2,758 189 --- 2,947 21 --- 2,968
Insurance...................... 824 28 --- 852 14 --- 866
Other.......................... 736 --- --- 736 --- --- 736
General and Administrative..... 2,899 --- --- 2,899 --- --- 2,899
Interest Expense............... 21,600 --- 785 22,385 --- (114) 22,271
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs...... 2,412 --- --- 2,412 --- --- 2,412
Depreciation and Other
Amortization.................. 20,458 --- 250 20,708 --- 140 20,848
--------- ------ ------- -------- --------- --------- --------
Total Expenses.............. 76,636 650 1,035 78,321 357 26 78,704
Income Before Gain on Sales of --------- ------ ------- -------- --------- --------- --------
Properties, Minority Interest
and Extraordinary Loss........ 24,963 1,447 (1,035) 25,375 890 (26) 26,239
Gain on Sales of Properties..... 4,320 --- --- 4,320 --- --- 4,320
--------- ------ ------- -------- --------- --------- --------
Income Before Minority Interest
and Extraordinary Loss........ 29,283 1,447 (1,035) 29,695 890 (26) 30,559
Income Allocated to Minority
Interest....................... (2,164) (112) 80 (2,196) (69) 2 (2,263)
--------- ------ ------- -------- --------- --------- --------
Income Before Extraordinary
Loss............................ 27,119 1,335 (955) 27,499 821 (24) 28,296
--------- ------ ------- -------- --------- --------- --------
Extraordinary Loss.............. (821) --- --- (821) --- --- (821)
------- ------ ------- -------- --------- --------- --------
Net Income...................... 26,298 $1,335 $ (955) $ 26,678 $ 821 $ (24) $ 27,475
------- ====== ======= ======== ========= ========= ========
Preferred Stock Dividends (2,939)
Net Income Available to -------
Common Shareholders............. $ 23,359
=======
Net Income Per Weighted
Average Common Share
Outstanding (23,529,280
as of September 30, 1996)...... $ 0.99
=======
Pro Forma Net Income
Per Weighted Average
Common Share Outstanding
(29,883,659 as of
September 30, 1996, pro forma)
The accompanying notes are an integral part of the pro forma financial
statement.
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FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1996 1997
Acquisition Acquisition Acquisition Other Pro First Industrial
Subtotal Properties Properties Property Forma Realty Trust,
Carry (Historical) (Historical) (Historical) Adjustments Inc.
Forward Note 2(f) Note 2 (g) Note 2 (h) Note 2 (i) Pro Forma
------- ------------- ------------ ------------ -------------- ----------------
REVENUES: $ 711 $ --- $ 91,062
Rental Income................... $80,998 $2,733 $6,620
Tenant Recoveries and 158 --- 25,380
Other Income................... 23,945 408 869 ------- -------- --------
------- ------ ------ 869 --- 116,442
Total Revenues................ 104,943 3,141 7,489 ------- -------- --------
------- ------ ------
EXPENSES: 125 --- 19,271
Real Estate Taxes............... 17,511 481 1,154 47 --- 5,040
Repairs and Maintenance......... 4,410 112 471 23 --- 4,218
Property Management............. 3,783 102 310 101 --- 3,170
Utilities....................... 2,968 63 38 --- --- 954
Insurance....................... 866 42 46 --- --- 738
Other........................... 736 --- 2 --- --- 2,899
General and Administrative...... 2,899 --- --- --- 547 22,818
Interest Expense................ 22,271 --- ---
Amortization of Interest Rate
Protection Agreements and --- --- 2,412
Deferred Financing Costs....... 2,412 --- ---
Depreciation and Other --- 1,684 22,532
Amortization................... 20,848 --- --- ------- -------- --------
-------- ------ ------ 296 2,231 84,052
Total Expenses................ 78,704 800 2,021 ------- -------- --------
Income Before Gain on Sales of -------- ------ ------
Properties, Minority Interest
and Extraordinary Loss......... 26,239 2,341 5,468 573 (2,231) 32,390
Gain on Sales of Properties...... 4,320 --- --- --- --- 4,320
-------- ------ ------ ------- -------- --------
Income Before Minority Interest
and Extraordinary Loss......... 30,559 2,341 5,468 573 (2,231) 36,710
Income Allocated to Minority
Interest........................ (2,263) (181) (422) (44) 76 (2,834)
------- ----- ------ ------ -------- --------
Income Before Extraordinary
Loss............................ 28,296 2,160 5,046 529 (2,155) 33,876
-------- ------ ------ ------- -------- --------
Extraordinary Loss............... (821) --- --- --- --- (821)
------- ------ ------ ------- -------- --------
Net Income....................... $27,475 $2,160 $5,046 $ 529 $ (2,155) $ 33,055
======== ====== ====== ======= ======== --------
Preferred Stock Dividends
Net Income Available to
Common Shareholders............. (2,939)
Net Income Per Weighted --------
Average Common Share
Outstanding (23,529,280
as of September 30, 1996)....... $ 30,116
Pro Forma Net Income ========
Per Weighted Average
Common Share Outstanding
(29,883,659 as of
September 30, 1996, pro forma).. $ 1.01
========
The accompanying notes are an integral part of the pro forma financial
statement.
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FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial Realty Trust, Inc. and its subsidiaries (the "Company")
was organized in the state of Maryland on August 10, 1993. The Company is a
real estate investment trust ("REIT") as defined in the Internal Revenue Code.
The accompanying unaudited pro forma statement of operations for the
Company reflects the historical operations of the Company for the period January
1, 1996 through September 30, 1996 and the acquisition of 28 properties (the
"First Highland Properties") and 18 properties (the "Other Acquisition
Properties") acquired by the Company between January 1, 1996 and April 10, 1996
which were reported on Form 8-K/A No. 1 dated March 20, 1996. The unaudited
pro forma statements of operations also include certain property acquisitions
by the Company between April 11, 1996 and January 9, 1997 which are reported on
this Form 8-K. The accompanying unaudited pro forma financial statements have
been prepared based upon certain pro forma adjustments to the historical
September 30, 1996 financial statements of the Company. The pro forma
statements of operations for the nine months ended September 30, 1996 have been
prepared as if the properties acquired subsequent to December 31, 1995 had been
acquired on either January 1, 1996 or the lease commencement date if the
property was developed and as if the 5,175,000 shares of $.01 par value common
stock issued on February 2, 1996 (the "February 1996 Equity Offering") and the
5,750,000 shares of $.01 par value common stock issued on October 25, 1996 (the
"October 1996 Equity Offering") had been completed on January 1, 1996.
The unaudited pro forma financial statements are not necessarily
indicative of what the Company's results of operations would have been for the
nine months ended September 30, 1996 had the properties been acquired as
described above, nor do they purport to present the future results of
operations of the Company.
2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - SEPTEMBER 30, 1996
(a) The historical operations reflect the operations of the Company for the
period January 1, 1996 through September 30, 1996 as reported on the
Company's Form 10-Q dated November 8, 1996.
(b) The historical operations reflect the operations of the First Highland
Properties for the period January 1, 1996 through the acquisition date of
this property on March 20, 1996.
(c) In connection with the First Highland Properties acquisition, the
Company assumed two mortgage loans totaling $9.4 million (the "Assumed
Indebtedness") and also entered into a new mortgage loan in the amount of
$36.8 million (the "New Indebtedness"). The interest expense adjustment
reflects interest on the Assumed Indebtedness and the New Indebtedness as
if such indebtedness was outstanding beginning January 1, 1996.
The depreciation and amortization adjustment reflects the charge for the
First Highland Properties acquired on March 20, 1996 for the period
January 1, 1996 to the acquisition date.
Income allocated to minority interest reflects income attributable to
Units in First Industrial, L.P. (the "Operating Partnership") owned by
Unitholders other than the Company. The minority interest adjustment
reflects a 7.7% minority interest for the nine months ended September 30,
1996. This adjustment reflects the income to Unitholders for units issued
in connection with certain property acquisitions as if such units had been
issued on January 1, 1996 and to reflect the completion of the February
1996 Equity Offering and the October 1996 Equity Offering as of January 1,
1996.
(d) The historical operations reflect the operations of the Other
Acquisition Properties for the period January 1, 1996 through their
respective acquisition dates.
13
15
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(e) The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate
("LIBOR") plus 2%) for the assumed earlier purchase of the Other
Acquisition Properties offset by the related interest savings related to
the assumed repayment of $59.4 million of acquisition facility borrowings
on January 1, 1996 from the proceeds of the February 1996 Equity
Offering.
The depreciation and amortization adjustment reflects the charge for the
Other Acquisition Properties for the period January 1, 1996 to their
respective acquisition dates.
Income allocated to minority interest reflects income attributable to
Units in the Operating Partnership owned by Unitholders other than the
Company. The minority interest adjustment reflects a 7.7% minority
interest through the nine months ended September 30, 1996. This
adjustment reflects the income to Unitholders for units issued in
connection with certain property acquisitions as if such Units had been
issued on January 1, 1996 and to reflect the completion of the February
1996 Equity Offering and the October 1996 Equity Offering as of January 1,
1996.
(f) The historical operations reflect the operations of 14 properties
acquired between April 11, 1996 and December 31, 1996 (the "Acquisition
Properties"), for the period January 1, 1996 through the earlier of their
respective acquisition date or September 30, 1996.
(g) The historical operations reflect the operations of 43 properties
acquired between April 11, 1996 and December 31, 1996 (the "1996
Acquisition Properties"), for the period January 1, 1996 through the
earlier of their respective acquisition date or September 30, 1996.
(h) The historical operations reflect the operations of the property
acquired January 9, 1997 (the "1997 Acquisition Property"), for the
period January 1, 1996 through September 30, 1996.
(i) The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at LIBOR plus 2% for borrowings under the Company's
$150 million secured revolving credit facility (the "1994 Acquisition
Facility") or LIBOR plus 1.1% for borrowings under the Company's $200
million unsecured revolving credit facility (the "1996 Acquisition
Facility") for the assumed earlier purchase of the Acquisition
Properties, the 1996 Acquisition Properties, and the 1997 Acquisition
Property.
The depreciation and amortization adjustment reflects the charges for the
Acquisition Properties, the 1996 Acquisition Properties, and the 1997
Acquisition Property from January 1, 1996 through the earlier of their
respective acquisition date or September 30, 1996.
Income allocated to minority interest reflects income attributable to
Units in the Operating Partnership owned by Unitholders other than the
Company. The minority interest adjustment reflects a 7.7% minority
interest for the nine months ended September 30, 1996. This adjustment
reflects the income to Unitholders for units issued in connection with
certain property acquisitions as if such Units had been issued on January
1, 1996 and to reflect the earlier completion of the February 1996 Equity
Offering and the October 1996 Equity Offering as of January 1, 1996.
14
16
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Other
First Pro Forma Acquisition
Industrial First Adjustments Other Properties
Realty Highland First Acquisition and Other
Trust, Inc. Properties Highland Properties Pro Forma Subtotal
(Historical) (Historical) Properties (Historical) Adjustments Carry
Note 2 (a) Note 2 (b) Note 2 (c) Subtotal Note 2 (d) Note 2 (e) Forward
---------- ----------- ----------- -------- ---------- ---------- -------
REVENUES:
Rental Income.................. $ 83,522 $ 8,366 $ --- $ 91,888 $6,089 $ --- $ 97,977
Tenant Recoveries and
Other Income.................. 22,964 1,144 --- 24,108 1,088 --- 25,196
-------- ------- -------- -------- ------ ------- --------
Total Revenues............... 106,486 9,510 --- 115,996 7,177 --- 123,173
-------- ------- -------- -------- ------ ------- --------
EXPENSES:
Real Estate Taxes.............. 16,998 911 --- 17,909 1,463 --- 19,372
Repairs and Maintenance........ 3,872 587 --- 4,459 317 --- 4,776
Property Management............ 3,539 459 --- 3,998 236 --- 4,234
Utilities...................... 2,060 810 --- 2,870 241 --- 3,111
Insurance...................... 903 117 --- 1,020 112 --- 1,132
Other.......................... 930 --- --- 930 82 --- 1,012
General and Administrative..... 3,135 --- --- 3,135 --- --- 3,135
Interest Expense............... 28,591 --- 3,627 32,218 --- (3,431) 28,787
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs...... 4,438 --- --- 4,438 --- --- 4,438
Depreciation and Other
Amortization.................. 22,264 --- 1,499 23,763 --- 1,175 24,938
Disposition of Interest Rate
Protection Agreement.......... 6,410 --- --- 6,410 --- --- 6,410
-------- ------- -------- -------- ------ ------- --------
Total Expenses............... 93,140 2,884 5,126 101,150 2,451 (2,256) 101,345
-------- ------- -------- -------- ------ ------- --------
Income Before Minority
Interest....................... 13,346 6,626 (5,126) 14,846 4,726 2,256 21,828
Income Allocated to
Minority Interest.............. (997) (525) 406 (1,116) (375) (179) (1,670)
-------- ------- -------- -------- ------ ------- --------
Net Income....................... 12,349 $ 6,101 $ (4,720) $ 13,730 $4,351 $ 2,077 $ 20,158
-------- ======= ======== ======== ====== ======= ========
Preferred Stock Dividends (468)
--------
Net Income Available to
Common Shareholders............ $ 11,881
========
Net Income Per Weighted
Average Common Share
Outstanding (18,889,013 as of
December 31, 1995)............. $ 0.63
========
Pro Forma Net Income Per
Weighted Average Common
Share Outstanding
(29,814,013 as of
December 31, 1995, pro forma)
The accompanying notes are an integral part of the pro forma financial
statement.
15
17
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1996
Acquisition Acquisition Other
Properties Properties Pro Forma First Industrial
Subtotal (Historical) (Historical) Adjustments Realty Trust, Inc.
Carry Forward Note 2 (f) Note 2 (g) Note 2 (h) Pro Forma
------------- ---------- --------- ---------- ---------
REVENUES:
Rental Income................. $ 97,977 $ 4,128 $ 8,600 $ --- $110,705
Tenant Recoveries and
Other Income................. 25,196 456 1,199 --- 26,851
--------- ------- ------- ------- --------
Total Revenues.............. 123,173 4,584 9,799 --- 137,556
--------- ------- ------- ------- --------
EXPENSES:
Real Estate Taxes............. 19,372 706 1,587 --- 21,665
Repairs and Maintenance....... 4,776 131 368 --- 5,275
Property Management........... 4,234 149 403 --- 4,786
Utilities..................... 3,111 43 31 --- 3,185
Insurance..................... 1,132 63 87 --- 1,282
Other......................... 1,012 57 8 --- 1,077
General and Administrative.... 3,135 --- --- --- 3,135
Interest Expense.............. 28,787 --- --- 1,152 29,939
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs..... 4,438 --- --- --- 4,438
Depreciation and Other
Amortization................. 24,938 --- --- 2,113 27,051
Disposition of Interest Rate
Protection Agreement......... 6,410 --- --- --- 6,410
--------- ------- ------- ------- --------
Total Expenses.............. 101,345 1,149 2,484 3,265 108,243
--------- ------- ------- ------- --------
Income Before Minority
Interest...................... 21,828 3,435 7,315 (3,265) 29,313
Income Allocated to
Minority Interest............. (1,670) (272) (580) 197 (2,325)
--------- ------- ------- ------- --------
Net Income...................... $ 20,158 $ 3,163 $ 6,735 $ (3,068) $ 26,988
========= ======= ======= ======= ========
Preferred Stock Dividends (468)
Net Income Available to --------
Common Shareholders.......... $ 26,520
========
Pro Forma Net Income Per
Weighted Average Common
Share Outstanding
(29,814,013 as of
December 31, 1995, pro forma) $ .89
========
The accompanying notes are an integral part of the pro forma financial
statement.
16
18
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial Realty Trust, Inc. and its subsidiaries (the "Company")
was organized in the state of Maryland on August 10, 1993. The Company is a
real estate investment trust ("REIT") as defined in the Internal Revenue Code.
The accompanying unaudited pro forma statement of operations for the
Company reflect the historical operations of the Company for the period January
1, 1995 through December 31, 1995 and the acquisition of 28 properties (the
"First Highland Properties") and 18 properties (the "Other Acquisition
Properties") acquired by the Company between January 1, 1996 and April 10, 1996
which were reported on Form 8-K/A No. 1 dated March 20, 1996 . The unaudited
pro forma statements of operations also include certain property acquisitions
by the Company between April 11, 1996 and January 9, 1997 which are reported on
this Form 8-K. The accompanying unaudited pro forma financial statements have
been prepared based upon certain pro forma adjustments to the historical
December 31, 1995 financial statements of the Company. The pro forma
statements of operations for the twelve months ended December 31, 1995 have
been prepared as if the properties acquired subsequent to December 31, 1995 and
through December 31, 1996 had been acquired on either January 1, 1995 or the
lease commencement date if the property was developed in 1995 (excluding
properties developed in 1996) and as if the 5,175,000 shares of $.01 par value
common stock issued on February 2, 1996 (the "February 1996 Equity Offering")
and the 5,750,000 shares of $.01 par value common stock issued on October 25,
1995 (the "October 1996 Equity Offering") had been completed on January 1,
1995.
The unaudited pro forma financial statements are not necessarily
indicative of what the Company's results of operations would have been for the
twelve months ended December 31 1995 had the properties been acquired as
described above, nor do they purport to present the future results of
operations of the Company.
2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - DECEMBER 31, 1995
(a) The historical operations reflect the operations for the twelve months
ended December 31, 1995 of the Company as reported on the Company's
December 31, 1995 Form 10-K.
(b) The historical operations reflect the operations for the twelve months
ended December 31, 1995 of the First Highland Properties as if the
properties had been acquired on January 1, 1995, except for properties
which were developed for which operations are included beginning on the
lease commencement date.
(c) In connection with the First Highland Properties acquisition, the
Company assumed two mortgage loans totaling $9.4 million (the "Assumed
Indebtedness") and also entered into a new mortgage loan in the amount of
$36.8 million (the "New Indebtedness"). The interest expense adjustment
reflects interest on the Assumed Indebtedness and the New Indebtedness as
if such indebtedness was outstanding beginning January 1, 1995.
The depreciation and amortization adjustment reflects the charge for the
First Highland Properties as if the acquisition occurred on January 1,
1995.
Income allocated to minority interest reflects income attributable to
Units in First Industrial, L.P. (the "Operating Partnership") owned by
Unitholders other than the Company. The minority interest adjustment
reflects a 7.9% minority interest throughout 1995. This adjustment
reflects income allocated to Unitholders for units issued in connection
with certain property acquisitions as if such units had been issued on
January 1, 1995 and to reflect the completion of the February 1996 Equity
Offering and the October 1996 Equity Offering as of January 1, 1995.
17
19
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(d) The historical operations reflect the operations of the Other
Acquisition Properties as if the properties had been acquired at January
1, 1995, except for properties which were developed for which operations
are included beginning on the lease commencement date.
(e) The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate
("LIBOR") plus 2%) for the assumed earlier purchase of the Other
Acquisition Properties offset by the related interest savings related to
the assumed repayment of $59.4 million of acquisition facility borrowings
on January 1, 1995 from the proceeds of the February 1996 Equity
Offering. The depreciation and amortization adjustment reflects the
charge for the Other Acquisition Properties as if the acquisition
occurred on January 1, 1995.
Income allocated to minority interest reflects income attributable to
Units in the Operating Partnership owned by Unitholders other than the
Company. The minority interest adjustment reflects an 7.9% minority
interest throughout 1995. This adjustment reflects the income to
Unitholders for units issued in connection with certain property
acquisitions as if such Units had been issued as of January 1, 1995 and to
reflect the completion of the February 1996 Equity Offering and the
October 1996 Equity Offering as of January 1, 1995.
(f) The historical operations reflect the operations of the 14 properties
acquired between April 11, 1996 and December 31, 1996 (the "Acquisition
Properties"), for the twelve months ended December 31, 1995 as if the
properties had been acquired on January 1, 1995.
(g) The unaudited historical operations reflect the operations of the 43
properties acquired between April 11, 1996 and December 31, 1996 (the
"1996 Acquisition Properties") for the twelve months ended December 31,
1995 as if the properties had been acquired at January 1, 1995.
(h) The interest rate adjustment reflects an increase in the acquisition
facility borrowings (at LIBOR plus 2% for borrowings under the Company's
1994 Acquisition Facility or LIBOR plus 1.1% for borrowings under the
Company's 1996 Acquisition Facility) for the assumed earlier purchase of
the Acquisition Properties and the 1996 Acquisition Properties.
The depreciation and amortization adjustment reflects the charge for the
Acquisition Properties and the 1996 Acquisition Properties as if the
acquisition had occurred on January 1, 1995.
Income allocated to minority interest reflects income attributable to
Units in the Operating Partnership owned by Unitholders other than the
Company. The minority interest adjustment reflects a 7.9% minority
interest throughout 1995. This adjustment reflects income allocated to
Unitholders for units issued in connection with certain property
acquisitions as if the Units had been issued on January 1, 1995 and to
reflect the completion of the February 1996 Equity Offering and the
October 1996 Equity Offering as of January 1, 1995.
18
20
SIGNATURE
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.
FIRST INDUSTRIAL REALTY TRUST, INC.
February 12, 1997 By: /s/ Michael J. Havala
----------------------------------------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting Officer)
19
21
EXHIBIT INDEX
Exhibit No. Description
- ----------- ------------------------------------
23 Consent of Coopers & Lybrand L.L.P.,
Independent Accountants
20
1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Form 8-K dated February 12, 1997 and
the incorporation by reference into the Registrant's three previously filed
Registration Statements on Form S-3 (File Nos. 33-95190, 333-03999 and
333-13225, respectively), and the Registrant's previously filed Registration
Statement on Form S-8 (File No. 33-95188) of our report dated February 11,
1997, on our audit of the combined historical statement of revenues and certain
expenses of the Acquisition Properties.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
February 12, 1997
21
