1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A NO. 1
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): NOVEMBER 6, 1998
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.)
311 S. WACKER DRIVE, SUITE 4000, CHICAGO, ILLINOIS 60606
(Address of principal executive offices)
(312) 344-4300
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Since the filing of First Industrial Realty Trust, Inc. and its
Subsidiaries' (the "Company") Form 8-K dated April 6, 1998, as amended by the
report on Form 8-K/A No. 1 filed June 16, 1998, the Company acquired 72
industrial properties from unrelated parties and two industrial properties from
related parties during the period April 17, 1998 through November 6, 1998. The
combined purchase price of the 74 industrial properties acquired totaled
approximately $109.2 million, excluding closing costs incurred in conjunction
with the acquisition of the industrial properties. The 74 industrial
properties acquired are described below and were funded with either or a
combination of working capital, the issuance of limited partnership units in
First Industrial, L.P. (the "Units"), the assumption of secured debt,
borrowings under the Company's $300 million unsecured revolving credit facility
and the issuance of other unsecured debt. The Company will operate the
facilities as industrial rental property.
On September 28, 1998, the Company, through a limited liability company in
which First Industrial, L.P. (the "Operating Partnership") is the sole member,
entered into a joint venture arrangement (the "September 1998 Joint Venture")
with an institutional investor to invest in industrial properties. The Company,
through two limited liability companies in which the Operating Partnership is
the sole member, will own a 10% equity interest in the September 1998 Joint
Venture and will provide property and asset management services to the September
1998 Joint Venture. The September 1998 Joint Venture acquired 104 industrial
properties from unrelated parties and seven industrial properties from the
Operating Partnership during the period October 9, 1998 through November 6,
1998. The combined purchase price of the 111 industrial properties acquired
totaled approximately $171.0 million, excluding closing costs incurred in
conjunction with the acquisition of the industrial properties. The 111
industrial properties acquired by the September 1998 Joint Venture are described
below and were funded with cash capital contributions made by the partners of
the September 1998 Joint Venture and the assumption and issuance of secured
debt. The September 1998 Joint Venture will operate these facilities as
industrial rental property.
PROPERTIES ACQUIRED BY THE COMPANY:
* On May 19, 1998, the Company purchased a 56,400 square foot light
industrial property located in Arlington Heights, Illinois. The purchase
price for the property was approximately $1.7 million. The property was
purchased from Dynasty Property Group, an Illinois general partnership.
* On May 21, 1998, the Company purchased five light industrial properties and
four research and development/flex properties totaling 135,662 square feet
located in St. Petersburg, Florida. The aggregate purchase price for these
properties was approximately $7.3 million. The properties were purchased
from Gandy/275 Associates, a Florida general partnership.
* On June 10, 1998, the Company purchased an 88,000 square foot regional
warehouse property located in Des Moines, Iowa for approximately $1.9
million. The property was purchased from Jared R. Johnson and Elaine E.
Johnson.
* On June 23, 1998, the Company purchased a 292,471 square foot light
industrial property located in Denver, Colorado from a firm in which an
officer of the Company owned a 12.08% interest. The purchase price for
the property was approximately $12.2 million which was funded with $8.1
million in cash and the issuance of 132,109 Units valued at $4.1 million.
The property was purchased from Pacifica Bryant Warehouse, LLC, a Colorado
limited liability company. Rental history had not commenced as of the date
of purchase.
* On June 30, 1998, the Company purchased an 84,760 square foot light
industrial property located in Skokie, Illinois. The purchase price for
the property was approximately $2.6 million. The property was purchased
from 3 Com Corporation. This property was owner occupied prior to the date
of purchase.
* On July 7, 1998, the Company purchased one light industrial property, one
bulk warehouse property and one regional warehouse property totaling
347,056 square feet located in Conyers, Georgia. The aggregate purchase
price for these properties was approximately $9.9 million. The properties
were purchased from Robert Pattillo Properties, Inc., a Georgia
corporation.
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* On July 16, 1998, the Company purchased a 44,427 square foot research and
development/flex property located in Tampa, Florida from a firm in which an
officer and an employee of the Company owned a 77.5% interest. The
purchase price for the property was approximately $3.2 million which was
funded with $.6 million in cash, the assumption of $2.6 million of debt and
the issuance 1,190 Units valued at $0.03 million. The property was
purchased from TK-SV, Ltd.
* On August 14, 1998, the Company purchased two light industrial properties
totaling 87,462 square feet located in Phoenix, Arizona. The aggregate
purchase price for these properties was approximately $5.0 million. The
properties were purchased from Orsett/40th Street and I & 10 Limited
Partnership. Rental history commenced on September 1, 1997.
* On August 18, 1998, the Company purchased a 50,338 square foot light
industrial property located in Port Washington, New York. The purchase
price for the property was approximately $2.5 million. The property was
purchased from Seaview Harbor Associates.
* On August 31, 1998, the Company purchased 34 light industrial properties
and two research and development/flex properties totaling 856,516 square
feet located in Portland, Oregon. The aggregate purchase price for these
properties was approximately $44.5 million which was funded with $28.5
million in cash, the assumption of $2.3 million in debt and the issuance of
455,483 Units valued at $13.7 million. The properties were purchased from
D.W. Sivers Company, Sivers Investment Partnership, Dennis W. Sivers,
Sivers Family Real Property, L.L.C. and Wendell C. Sivers Marital Trust.
* On September 30, 1998, the Company purchased two light industrial
properties totaling 50,900 square feet located in Aston, Pennsylvania. The
aggregate purchase price for these properties was approximately $2.1
million. The properties were purchased from Richard C. DeSantis and Paul
C. Steelman, individually and as co-partners t/a Richard DeSantis
Developers.
* On September 30, 1998, the Company purchased a 121,400 square foot bulk
warehouse property located in Lavergne, Tennessee. The purchase price for
the property was approximately $1.5 million. The property was purchased
from AMTROL, Inc., a Rhode Island corporation. Rental history had not
commenced as of the date of purchase.
* On October 13, 1998, the Company purchased a 41,800 square foot bulk
warehouse property located in Romulus, Michigan. The purchase price for
the property was approximately $1.3 million. The property was purchased
from Airborne Express Corporation. This property was owner occupied prior
to the date of purchase.
* On October 21, 1998, the Company purchased a 52,329 square foot light
industrial property located in Hauppauge, New York. The purchase price for
the property was approximately $2.3 million which was funded with $2.3
million in cash and the issuance of 1,650 Units valued at $.04 million.
The property was purchased from 275 Corpark Associates Company, a New York
partnership.
* On October 30, 1998, the Company purchased a 20,000 square foot light
industrial property located in Dayton, Ohio. The purchase price for the
property was approximately $0.7 million which was funded with $.3 million
in cash and the issuance of 13,704 Units valued at $.4 million. The
property was purchased from Trottwood Industrial Park, an Ohio general
partnership.
* On November 5, 1998, the Company purchased nine light industrial properties
and three research and development/flex properties totaling 291,168 square
feet located in Richland Hills, Texas. The aggregate purchase price for
these properties was approximately $10.5 million which was funded with $7.7
million in cash, the assumption of $1.3 million in debt and the issuance of
60,000 Units valued at $1.5 million. The properties were purchased from
Priscilla Ann Hodges, Leland A. Hodges, III, Margery Lynn Hodges Berry and
Four Star Investments, Inc.
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PROPERTIES ACQUIRED BY THE SEPTEMBER 1998 JOINT VENTURE:
* On October 9, 1998, the September 1998 Joint Venture purchased 61
industrial properties totaling 2,856,388 square feet. Of the 61 industrial
properties purchased, 47 properties are located in Houston, Texas; three
properties are located in McAllen, Texas; two properties are located in
Indianapolis, Indiana; two properties are located in Irving, Texas; two
properties are located in Nashville, Tennessee; one property is located in
Tampa, Florida; one property is located in Milwaukee, Wisconsin; one
property is located in Bolingbrook, Illinois; one property is located in
Des Plaines, Illinois; and one property is located in Romulus, Michigan.
The aggregate purchase price for these properties was approximately $94.8
million. Fifty-nine of the 61 industrial properties were purchased from
Investors Equity Fund, Inc./162516 Canada, Inc.; Investors Equity Fund,
Inc./168065 Canada, Inc.; Investors Equity Fund, Inc./167098 Canada, Inc.;
Investors Equity Fund, Inc.; KIRKWOOD Tech Associates, Ltd.; Greenbriar
III Associates, Ltd.; Jameel Warehouses, Inc.; Rockley Road Properties,
Inc.; AXXA, L.L.C.; 34th Street Building, Ltd.; Pinemont-Hempstead
Associates I, Ltd.; Pinemont-Hempstead Associates II, Ltd.; 11421 Todd
Road Limited Partnership; East Warehouse, L.L.C.; Houston Industrial
Warehouses, L.L.C.; Industrial Partners, L.L.C.; TMC Properties, L.L.C., a
New Jersey limited liability company; Merit 1995 Industrial Portfolio
Limited Partnership, a Texas limited partnership; Guion Road Associates,
Inc.; Southwest Centre, a Texas general partnership; MMC Capital Corp.;
BVT Acorn Distribution Center, Ltd., a Tennessee limited partnership; APPC
Metroplex Investors 1984, Ltd., L.P.; and Stair Realty, a Florida joint
venture. Two of the 61 industrial properties were purchased from First
Industrial, L.P.
* On October 23, 1998, the September 1998 Joint Venture acquired six
industrial properties totaling 859,136 square feet. Of the six industrial
properties purchased, three properties are located in Wichita, Kansas; one
property is located in Addison, Illinois; one property is located in Aston,
Pennsylvania; and one property is located in Louisville, Kentucky. The
aggregate purchase price for these properties was approximately $20.0
million. The properties were purchased from Realco Investments; A.S.
Industrial Properties; Aston Investments; and Starker Services, Inc.
* On November 6, 1998, the September 1998 Joint Venture purchased 44
industrial properties totaling 1,442,842 square feet. Of the 44
industrial properties purchased, 26 properties are located in Fort Worth,
Texas; ten properties are located in McAllen, Texas; five properties are
located in Ann Arbor, Michigan; one property in Clearwater, Florida; one
property is located in Deer Park, New York; and one property is located in
Cherry Hills, New Jersey. The aggregate purchase price for these
properties was approximately $56.2 million. Thirty-nine of the 44
industrial properties were purchased from Midway Brazos Partners, Ltd.,
O.P. Leonard. Jr.; Louise Leonard Keffler; Leonard Properties, et al;
Virginia Leonard Marital Trust; BMP Joint Venture, a Texas joint venture;
1016 Partnership, a Texas general partnership; Sally Elaine Wilson,
individually, as Independent Executor of the Estate of Darrell L. Wilson
(deceased) and as Testamentary Trustee under the Last Will and Testament
of Darrell L. Wilson (deceased) and Phillip Hunke; Corridor Commercial
Center Associates, a Florida general partnership; Wilson Partnership, a
Texas general partnership; Gilbert King and Kenneth Katzman, as Executors
under the Last Will and Testament of Jerome Krinsky; and C.H.O.C.K.
Associates, a New Jersey general partnership. Five of the 44 industrial
properties were purchased from First Industrial, L.P.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Combined Historical Statements of Revenues and Certain
Expenses for the 1998 Acquisition B Properties - Unaudited.
Combined Historical Statements of Revenues and Certain
Expenses for the 1998 Acquisition II Properties and Notes
thereto with Independent Accountant's report dated December
31, 1998.
(b) Pro Forma Financial Information:
Pro Forma Balance Sheet as of September 30, 1998.
Pro Forma Statement of Operations for the Nine Months Ended
September 30, 1998.
Pro Forma Statement of Operations for the Year Ended December
31, 1997.
(c) Exhibits.
Exhibits Number Description
--------------- -----------
23 Consent of PricewaterhouseCoopers LLP,
Independent Accountants
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INDEX TO FINANCIAL STATEMENTS
-----------------------------
PAGE
----
1998 ACQUISITION B PROPERTIES
- -----------------------------
Combined Historical Statements of Revenues and Certain Expenses for the
1998 Acquisition B Properties for the Nine Months Ended September 30, 1998
and the Year Ended December 31, 1997- Unaudited........................... 6
1998 ACQUISITION II PROPERTIES
- ------------------------------
Report of Independent Accountants......................................... 7
Combined Historical Statements of Revenues and Certain Expenses for the
1998 Acquisition II Properties for the Nine Months Ended September 30, 1998
(Unaudited) and for the Year Ended December 31, 1997...................... 8
Notes to Combined Historical Statements of Revenues and Certain Expenses.. 9-10
PRO FORMA FINANCIAL INFORMATION
- -------------------------------
Pro Forma Balance Sheet as of September 30, 1998.............................. 11
Pro Forma Statement of Operations for the Nine Months Ended September 30, 1998 12-13
Notes to Pro Forma Financial Statements....................................... 14-17
Pro Forma Statement of Operations for the Year Ended December 31, 1997........ 18-19
Notes to Pro Forma Financial Statement........................................ 20-24
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1998 ACQUISITION B 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 22 of 74 industrial
properties acquired (of which 72 properties were acquired from unrelated parties
and two properties were acquired from related parties) during the period April
17, 1998 through November 6, 1998 (the "1998 Acquisition B Properties") by First
Industrial Realty Trust, Inc. (together with its Subsidiaries, the "Company").
The Combined Historical Statement of Revenues and Certain Expenses for the Nine
Months Ended September 30, 1998 includes operations only for the periods for
which the properties were not owned by the Company. These statements are
exclusive of 48 properties (the "1998 Acquisition II Properties") acquired by
the Company which have been audited and are included elsewhere in this Form
8-K/A No. 1, two properties occupied by the previous owner prior to acquisition
and two properties in which rental history had not commenced prior to the date
of purchase.
The 1998 Acquisition B Properties were acquired for an aggregate purchase
price of approximately $36.6 million and have an aggregate gross leaseable area
of 932,574 square feet. A description of each property is included in Item 5.
FOR THE NINE FOR THE
MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 DECEMBER 31, 1997
(UNAUDITED) (UNAUDITED)
---------------------- ---------------------
Revenues:
Rental Income............................. $ 2,075 $ 3,622
Tenant Recoveries and Other Income........ 485 915
------------------- -------------------
Total Revenues.......................... 2,560 4,537
------------------- -------------------
Expenses:
Real Estate Taxes......................... 397 706
Repairs and Maintenance................... 132 252
Property Management....................... 85 149
Utilities................................. 24 41
Insurance................................. 29 55
Other..................................... 13 22
------------------- -------------------
Total Expenses.......................... 680 1,225
------------------- -------------------
Revenues in Excess of Certain Expenses...... $ 1,880 $ 3,312
=================== ===================
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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 1998 Acquisition II Properties as described in Note
1 for the year ended December 31, 1997. This financial statement is the
responsibility of the 1998 Acquisition II Properties' management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audit provides 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/A No. 1 dated November 6, 1998 of First Industrial Realty Trust, Inc. and is
not intended to be a complete presentation of the 1998 Acquisition II
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 1998
Acquisition II Properties for the year ended December 31, 1997 in conformity
with generally accepted accounting principles.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
December 31, 1998
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1998 ACQUISITION II PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
FOR THE NINE
MONTHS ENDED FOR THE
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------------- ---------------------
Revenues:
Rental Income...................................... $ 3,524 $ 5,782
Tenant Recoveries and Other Income................. 305 606
---------------------- ---------------------
Total Revenues................................... 3,829 6,388
---------------------- ---------------------
Expenses:
Real Estate Taxes.................................. 420 682
Repairs and Maintenance............................ 107 189
Property Management................................ 67 83
Utilities.......................................... 44 89
Insurance.......................................... 42 51
Other.............................................. 23 30
---------------------- ---------------------
Total Expenses................................... 703 1,124
---------------------- ---------------------
Revenues in Excess of Certain Expenses.............. $ 3,126 $ 5,264
====================== =====================
The accompanying notes are an integral part of the financial statements.
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1998 ACQUISITION II 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") combined the results of operations of 48 industrial properties
acquired by First Industrial Realty Trust, Inc. and its Subsidiaries (the
"Company") during the period April 17, 1998 through November 6, 1998 (the "1998
Acquisition II Properties").
The 1998 Acquisition II Properties were acquired for an aggregate purchase
price of approximately $55.0 million.
SQUARE
# OF FEET DATE DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) ACQUIRED HISTORY COMMENCED
- ----------------- ------------ ----------------- ---------- -----------------
Portland, Oregon 36 856,516 August 31, 1998 January 1, 1997
Richland Hills, Texas 12 291,168 November 5, 1998 January 1, 1997
------------ -----------------
48 1,147,684
============ =================
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the nine months ended September 30, 1998 includes the operations
only for those periods for which the properties were not owned by the Company
and 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 1998 Acquisition II 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 Statements, 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 based upon lease terms. 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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1998 ACQUISITION II PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The 1998 Acquisition II Properties are leased to tenants under net,
semi-net and gross operating leases. Minimum lease payments receivable,
excluding tenant reimbursement of expenses, under noncancelable operating leases
in effect as of December 31, 1997 are approximately as follows:
1998
Acquisition II
Properties
----------------
1998 $ 4,763
1999 4,167
2000 3,162
2001 2,491
2002 1,884
Thereafter 5,128
----------------
Total $ 21,595
================
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FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
September
First 1998 1998 1998
Industrial Acquisition Acquisition Joint Venture First
Realty Trust, B(1) II(1) Sale Industrial
Inc. Properties Properties Properties Pro Forma Realty Trust,
(Historical) (Historical) (Historical) (Historical) Adjustments Inc.
Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d) Note 2 (e) Pro Forma
------------ ------------ ----------- ------------ ----------- -------------
ASSETS
Assets:
Investment in Real Estate:
Land.................................... $ 408,951 $ 641 $ 1,586 $ (5,085) $ --- $ 406,093
Buildings and Improvements.............. 2,159,667 3,634 8,986 (28,812) --- 2,143,475
Furniture, Fixtures and Equipment....... 1,437 --- --- --- --- 1,437
Construction in Progress................ 22,777 --- --- --- --- 22,777
Less: Accumulated Depreciation.......... (161,423) --- --- --- --- (161,423)
---------- ------- --------- --------- --------- ----------
Net Investment in Real Estate........ 2,431,409 4,275 10,572 (33,897) --- 2,412,359
Investment in Joint Venture............... --- --- --- --- 3,420 3,420
Cash and Cash Equivalents................. 5,612 (3,894) (7,698) 33,897 (27,917) ---
Restricted Cash........................... 5,254 --- --- --- --- 5,254
Tenant Accounts Receivable, Net........... 10,480 --- --- --- --- 10,480
Deferred Rent Receivable.................. 13,005 --- --- --- --- 13,005
Deferred Financing Costs, Net............. 12,279 --- --- --- --- 12,279
Prepaid Expenses and Other Assets, Net.... 85,217 --- --- --- --- 85,217
---------- ------- --------- --------- --------- ----------
Total Assets......................... $2,563,256 $ 381 $ 2,874 $ --- $ (24,497) $2,542,014
========== ======= ========= ========= ========= ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Mortgage Loans Payable.................. $ 107,676 $ --- $ 1,348 $ --- $ --- $ 109,024
Senior Unsecured Debt, Net.............. 948,572 --- --- --- --- 948,572
Acquisition Facilities Payable.......... 128,800 --- --- --- (24,497) 104,303
Accounts Payable and Accrued Expenses... 68,390 --- --- --- --- 68,390
Rents Received in Advance and Security
Deposits.............................. 19,820 --- --- --- --- 19,820
Dividends/Distributions Payable......... 23,735 --- --- --- --- 23,735
---------- ------- --------- --------- --------- ----------
Total Liabilities.................... 1,296,993 --- 1,348 --- (24,497) 1,273,844
---------- ------- --------- --------- --------- ----------
Minority Interest......................... 191,682 381 1,526 --- --- 193,589
Commitments and Contingencies............. --- --- --- --- --- ---
Stockholders Equity:
Preferred Stock ($.01 par value,
10,000,000 shares authorized, 1,650,000,
40,000, 20,000, 50,000 and 30,000 shares
of Series A,B,C,D and E Cumulative
Preferred Stock, respectively, issued
and outstanding at September 30, 1998
having a liquidation preference of
$25 per share ($41,250), $2,500 per share
($100,000), $2,500 per share ($50,000),
$2,500 per share ($125,000) and $2,500
per share ($75,000),respectively) ...... 18 --- --- --- --- 18
Common Stock ($.01 par value, 100,000,000
shares authorized, 37,922,954 shares issued
and outstanding at September 30, 1998)... 379 --- --- --- --- 379
Additional Paid-in-Capital............... 1,171,675 --- --- --- --- 1,171,675
Distributions in Excess of Accumulated
Earnings............................... (92,726) --- --- --- --- (92,726)
Unamortized Value of Restricted Stock
Grants................................. (4,765) --- --- --- --- (4,765)
---------- ------- --------- --------- --------- ----------
Total Stockholders' Equity.......... 1,074,581 --- --- --- --- 1,074,581
---------- ------- --------- --------- --------- ----------
Total Liabilities and Stockholders'
Equity.......................... $2,563,256 $ 381 $ 2,874 $ --- $ (24,497) $2,542,014
========== ======= ========= ========= ========= ==========
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, 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1998 1998 1998
First Industrial Acquisition Acquisition Acquisition
Realty A I B
Trust, Inc. Properties Properties Properties Subtotal
(Historical) (Historical) (Historical) (Historical) Carry
Note 3 (a) Note 3 (b) Note 3 (c) Note 3 (d) forward
---------------- ----------- ------------ ----------- ---------
REVENUES:
Rental Income .................................. $ 206,583 $ 1,259 $ 7,169 $ 2,075 $ 217,086
Tenant Recoveries and Other Income ............. 49,275 594 1,277 485 51,631
--------- --------- --------- --------- ---------
Total Revenues .............................. 255,858 1,853 8,446 2,560 268,717
--------- --------- --------- --------- ---------
EXPENSES:
Real Estate Taxes .............................. 40,528 562 1,139 397 42,626
Repairs and Maintenance ........................ 11,115 43 622 132 11,912
Property Management ............................ 10,006 30 305 85 10,426
Utilities ...................................... 7,084 3 173 24 7,284
Insurance ...................................... 693 16 64 29 802
Other .......................................... 4,280 4 68 13 4,365
General and Administrative ..................... 9,824 -- -- -- 9,824
Interest ....................................... 51,593 -- -- -- 51,593
Amortization of Interest Rate Protection
Agreements and Deferred Financing Costs........ 659 -- -- -- 659
Depreciation and Other Amortization............ 46,969 -- -- -- 46,969
--------- --------- --------- --------- ---------
Total Expenses .............................. 182,751 658 2,371 680 186,460
--------- --------- --------- --------- ---------
Income from Operations Before Loss in Equity
of Joint Venture and Income Allocated to
Minority Interest .............................. 73,107 1,195 6,075 1,880 82,257
Loss in Equity of Joint Venture .................. -- -- -- -- --
Income Allocated to Minority Interest ............ (7,656) -- -- -- (7,656)
--------- --------- --------- --------- ---------
Income from Operations ........................... 65,451 1,195 6,075 1,880 74,601
Gain on Sales of Properties, Net ................. 3,069 -- -- -- 3,069
--------- --------- --------- --------- ---------
Income Before Cumulative Effect of Change in
Accounting Principle ........................... 68,520 1,195 6,075 1,880 77,670
Less: Preferred Stock Dividends .................. (22,399) -- -- -- (22,399)
--------- --------- --------- --------- ---------
Income Before Cumulative Effect of Change in
Accounting Principle Available to Common
Stockholders ................................... $ 46,121 $ 1,195 $ 6,075 $ 1,880 $ 55,271
========= ========= ========= ========= =========
Income Before Cumulative Effect of Change in
Accounting Principle Available to Common
Stockholders Per Weighted Average
Common Share Outstanding:
Basic (37,281,809 for September 30, 1998) ..... $ 1.24
=========
Diluted (37,517,075 for September 30, 1998) ... $ 1.23
=========
Pro Forma Income Before Cumulative Effect of
Change in Accounting Principle Available
to Common Stockholders Per Weighted
Average Common Share Outstanding:
Basic (37,762,732 for September 30, 1998, pro
forma) ........................................
Diluted (37,997,998 for September 30, 1998,
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, 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
September
1998 1998
Acquisition Joint Venture First
II Sale Industrial
Subtotal Properties Properties Pro Forma Realty Trust,
Carry (Historical) (Historical) Adjustments Inc.
Forward Note 3 (e) Note 3 (f) Note 3 (g) Pro Forma
--------- ----------- ----------- ---------- -------------
REVENUES:
Rental Income .................................. $ 217,086 $ 3,524 $ (1,282) $ -- $ 219,328
Tenant Recoveries and Other Income ............. 51,631 305 (190) -- 51,746
--------- --------- --------- --------- ---------
Total Revenues .............................. 268,717 3,829 (1,472) -- 271,074
--------- --------- --------- --------- ---------
EXPENSES:
Real Estate Taxes .............................. 42,626 420 (185) -- 42,861
Repairs and Maintenance ........................ 11,912 107 (35) -- 11,984
Property Management ............................ 10,426 67 (45) -- 10,448
Utilities ...................................... 7,284 44 (19) -- 7,309
Insurance ...................................... 802 42 (3) -- 841
Other .......................................... 4,365 23 -- -- 4,388
General and Administrative ..................... 9,824 -- -- -- 9,824
Interest ....................................... 51,593 -- -- 6,279 57,872
Amortization of Interest Rate Protection
Agreements and Deferred Financing Costs........ 659 -- -- -- 659
Depreciation and Other Amortization ........... 46,969 -- -- 2,697 49,666
--------- --------- --------- --------- ---------
Total Expenses ............................. 186,460 703 (287) 8,976 195,852
--------- --------- --------- --------- ---------
Income from Operations Before Loss in Equity
of Joint Venture and Income Allocated to
Minority Interest .............................. 82,257 3,126 (1,185) (8,976) 75,222
Loss in Equity of Joint Venture .................. -- -- -- (24) (24)
Income Allocated to Minority Interest ............ (7,656) -- -- (1,000) (8,656)
--------- --------- --------- --------- ---------
Income from Operations ........................... 74,601 3,126 (1,185) (10,000) 66,542
Gain on Sales of Properties, Net ................. 3,069 -- -- -- 3,069
--------- --------- --------- --------- ---------
Income Before Cumulative Effect of Change in
Accounting Principle ........................... 77,670 3,126 (1,185) (10,000) 69,611
Less: Preferred Stock Dividends .................. (22,399) -- -- (2,236) (24,635)
--------- --------- --------- --------- ---------
Income Before Cumulative Effect of Change in
Accounting Principle Available to Common
Stockholders ................................... $ 55,271 $ 3,126 $ (1,185) $(12,236) $ 44,976
========= ========= ========= ========= =========
Income Before Cumulative Effect of Change in
Accounting Principle Available to Common
Stockholders Per Weighted Average
Common Share Outstanding:
Basic (37,281,809 for September 30, 1998) .....
Diluted (37,517,075 for September 30, 1998) ...
Pro Forma Income Before Cumulative Effect of
Change in Accounting Principle Available
to Common Stockholders Per Weighted
Average Common Share Outstanding:
Basic (37,762,732 for September 30, 1998,
pro forma) .................................... $ 1.19
=========
Diluted (37,997,998 for September 30, 1998,
pro forma) .................................... $ 1.18
=========
The accompanying notes are an integral part
of the pro forma financial statement.
13
15
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial Realty Trust, Inc. (together with 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.
Since the filing of the Company's Form 8-K dated April 6, 1998, as amended
by the report on Form 8-K/A No. 1 filed on June 16, 1998, the Company acquired
72 industrial properties from unrelated parties and two industrial properties
from related parties during the period April 17, 1998 through November 6, 1998.
The combined purchase price of the 74 industrial properties acquired totaled
approximately $109.2 million, excluding closing costs incurred in conjunction
with the acquisition of the industrial properties. The 74 industrial
properties acquired were funded with either or a combination of working
capital, the issuance of limited partnership units in First Industrial, L.P.
(the "Units"), the assumption of secured debt, borrowings under the Company's
$300 million unsecured revolving credit facility (the "1997 Unsecured
Acquisition Facility") and the issuance of other unsecured debt. The Company
will operate the facilities as industrial rental property.
On September 28, 1998, the Company, through a limited liability company in
which First Industrial, L.P. (the "Operating Partnership") is the sole member,
entered into a joint venture arrangement (the "September 1998 Joint Venture")
with an institutional investor to invest in industrial properties. The Company,
through two limited liability companies in which the Operating Partnership is
the sole member, will own a 10% equity interest in the September 1998 Joint
Venture and will provide property and asset management services to the September
1998 Joint Venture. The September 1998 Joint Venture acquired 104 industrial
properties from unrelated parties and seven industrial properties (the
"September 1998 Joint Venture Sale Properties") from the Operating Partnership
during the period October 9, 1998 through November 6, 1998. The combined
purchase price of the 111 industrial properties acquired totaled approximately
$171.0 million, excluding closing costs incurred in conjunction with the
acquisition of the industrial properties. The 111 industrial properties
acquired by the September 1998 Joint Venture were funded with cash capital
contributions made by the partners of the September 1998 Joint Venture and the
assumption and issuance of secured debt. The September 1998 Joint Venture will
operate these facilities as industrial rental property.
The accompanying unaudited pro forma balance sheet and unaudited pro forma
statement of operations for the Company reflect the historical financial
position of the Company as of September 30, 1998, the historical operations of
the Company for the period January 1, 1998 through September 30, 1998, adjusted
by the acquisition of 34 properties (the "1998 Acquisition A Properties") and
127 properties (the "1998 Acquisition I Properties") during the period January
1, 1998 through April 16, 1998 which are reported on Form 8-K/A No. 1 dated
April 6, 1998, and the acquisition of 22 properties (the "1998 Acquisition B
Properties") and 48 properties (the "1998 Acquisition II Properties") acquired
and the sale of the September 1998 Joint Venture Sale Properties during the
period April 17, 1998 through November 6, 1998 reported on this Form 8-K/A No. 1
dated November 6, 1998 and the Company's 10% equity interest in the September
1998 Joint Venture.
The accompanying unaudited pro forma balance sheet as of September 30, 1998
has been prepared as if the properties acquired and sold subsequent to
September 30, 1998 had been acquired or sold, respectively, on September 30,
1998, the Company's 10% equity interest in the September 1998 Joint Venture
acquired after September 30, 1998 had been acquired on September 30, 1998 and
the assumption of $1.3 million of secured debt had occurred on September 30,
1998.
The accompanying unaudited pro forma statement of operations for the nine
months ended September 30, 1998 has been prepared as if the properties acquired
subsequent to December 31, 1997 had been acquired on either January 1, 1997 or
the lease commencement date if the property was developed, the sale of the
September 1998 Joint Venture Sale Properties had been sold on January 1, 1997
and as if the Company's 10% equity interest in the September 1998 Joint Venture
had been acquired on January 1, 1997. In addition, the unaudited pro forma
statement of operations is prepared as if the assumption of $8.7 million of
secured debt, the issuance on March 31, 1998 of $100 million of unsecured
debt bearing interest at 6.50% which matures on April 5, 2011 (the "2011
Drs."),
14
16
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
the issuance on July 14, 1998 of $200 million of unsecured debt bearing interest
at 7.60% which matures on July 15, 2028 (the "2028 Notes"), the issuance on
February 4, 1998 of 50,000 shares of 7.95%, $.01 par value, Series D
Cumulative Preferred Stock (the "Series D Preferred Stock Offering"), the
issuance on March 18, 1998 of 30,000 shares of 7.90%, $.01 par value, Series E
Cumulative Preferred Stock (the "Series E Preferred Stock Offering") and the
issuance on April 23, 1998 of 1,112,644 shares of $.01 par value common stock
(the "April 1998 Equity Offering") had been completed on January 1, 1997.
The unaudited pro forma balance sheet is not necessarily indicative of what
the Company's financial position would have been as of September 30, 1998 had
the transactions been consummated as described above, nor does it purport to
present the future financial position of the Company. The unaudited pro forma
statement of operations is not necessarily indicative of what the Company's
results of operations would have been for the nine months ended September 30,
1998 had the transactions been consummated as described above, nor does it
purport to present the future results of operations of the Company.
2. BALANCE SHEET PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - SEPTEMBER 30, 1998
(a) The historical balance sheet reflects the financial position of the Company
as of September 30, 1998 as reported in the Company's Form 10-Q for the
quarter ended September 30, 1998.
(b) Represents the 1998 Acquisition B Properties and a property that was owner
occupied prior to the date of purchase that were acquired subsequent to
September 30, 1998 (the "1998 Acquisition B(1) Properties") as if the
acquisitions had occurred on September 30, 1998. The 1998 Acquisition B(1)
Properties were acquired for approximately $4.3 million in the aggregate
which was funded with $3.8 million in cash and the issuance of 15,354 Units
valued at $.5 million.
(c) Represents the 1998 Acquisition II Properties that were acquired subsequent
to September 30, 1998 (the "1998 Acquisition II(1) Properties") as if the
acquisitions had occurred on September 30, 1998. The 1998 Acquisition II(1)
Properties were acquired for approximately $10.5 million in the aggregate
which was funded with $7.7 million in cash, the assumption of $1.3 million
of secured debt and the issuance of 60,000 Units valued at $1.5 million.
(d) Represents the September 1998 Joint Venture Sale Properties sold by the
Company to the September 1998 Joint Venture subsequent to September 30,
1998 as if the sales had occurred on September 30, 1998. The sale of the
September 1998 Joint Venture Sale Properties resulted in sales proceeds of
approximately $33.9 million, approximately the Company's book value of such
assets.
(e) Represents the adjustments needed to present the pro forma balance sheet
as of September 30, 1998 as if borrowings and repayments subsequent to
September 30, 1998 under the 1997 Unsecured Acquisition Facility, due to
the acquisitions and sales disclosed above, had occurred on September 30,
1998 and as if the Company's 10% equity interest in the September 1998
Joint Venture of approximately $3.4 million had been acquired on September
30, 1998.
3. STATEMENT OF OPERATIONS PRO FORMA ASSUMPTIONS AND ADJUSTMENTS -
SEPTEMBER 30, 1998
(a) The historical operations reflect the operations of the Company for the
period January 1, 1998 through September 30, 1998 as reported in the
Company's Form 10-Q for the quarter ended September 30, 1998.
(b) The historical operations reflect the operations of the 1998 Acquisition A
Properties for the period January 1, 1998 through their respective
acquisition dates.
(c) The historical operations reflect the operations of the 1998 Acquisition I
Properties for the period January 1, 1998 through their respective
acquisition dates.
15
17
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(d) The historical operations reflect the operations of the 1998 Acquisition B
Properties for the period January 1, 1998 through the earlier of September
30, 1998 or their respective acquisition dates.
(e) The historical operations reflect the operations of the 1998 Acquisition II
Properties for the period January 1, 1998 through the earlier of September
30, 1998 or their respective acquisition dates.
(f) The historical operations reflect the operations of five of the September
1998 Joint Venture Sale Properties for the period May 22, 1998 through
September 30, 1998, one of the September 1998 Joint Venture Sale Properties
for the period June 11, 1998 through September 30, 1998 and one of the
September 1998 Joint Venture Sale Properties for the period July 25, 1998
through September 30, 1998.
(g) In conjunction with the acquisition of the 1998 Acquisition I Properties,
the Company assumed a $2.5 million mortgage loan (the "Acquisition Mortgage
Loan IV"). The interest expense adjustment reflects interest on the
Acquisition Mortgage Loan IV for the pro forma period as if such
indebtedness was outstanding beginning January 1, 1997.
In conjunction with the acquisition of the 1998 Acquisition B Properties,
the Company assumed a $2.6 million mortgage loan (the "Acquisition Mortgage
Loan V"). The interest expense adjustment reflects interest on the
Acquisition Mortgage Loan V for the pro forma period as if such
indebtedness was outstanding beginning January 1, 1997.
In conjunction with the acquisition of the 1998 Acquisition II Properties,
the Company assumed a $1.0 million mortgage loan (the "Acquisition Mortgage
Loan VI"), a $1.3 million mortgage loan (the "Acquisition Mortgage Loan
VII") and a $1.3 million mortgage loan (the "Acquisition Mortgage Loan
VIII"). The interest expense adjustment reflects interest on the
Acquisition Mortgage Loan VI, the Acquisition Mortgage Loan VII and the
Acquisition Mortgage Loan VIII for the pro forma period as if such
indebtedness was outstanding beginning January 1, 1997.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings at the 30-day London Interbank Offered Rate ("LIBOR")
plus .8% for borrowings under the Company's 1997 Unsecured Acquisition
Facility for the assumed earlier purchase of the 1998 Acquisition A
Properties, the 1998 Acquisition I Properties, the 1998 Acquisition B
Properties and the 1998 Acquisition II Properties offset by the interest
savings related to the assumed repayment of $560.2 million of acquisition
facility borrowings on January 1, 1997 from the proceeds of the issuance of
the 2011 Drs., the 2028 Notes, the Series D Preferred Stock Offering,
Series E Preferred Stock Offering, the April 1998 Equity Offering and the
proceeds from the sale of the September 1998 Joint Venture Sale Properties
as if such properties were sold on January 1, 1997 and also reflects an
increase in interest expense due to the issuance of the 2011 Drs. and the
2028 Notes as if such unsecured debt was outstanding as of January 1, 1997.
(Dollars in thousands)
Interest expense related to the Acquisition
Mortgage Loan IV, the Acquisition Mortgage
Loan V, the Acquisition Mortgage Loan VI, the
Acquisition Mortgage Loan VII and the Acquisition
Mortgage Loan VIII as if such indebtedness was
outstanding as of January 1, 1997......... $ 422
Interest expense related to the assumed earlier
borrowings under the 1997 Unsecured Acquisition
Facility.................................... 11,360
Interest expense related to the issuance of
the 2011 Drs. and the 2028 Notes as if such debt
was outstanding as of January 1, 1997............ 9,723
Interest savings due to the assumed repayment of
$560.2 million of acquisition facility borrowings
on January 1, 1997 from the proceeds of the
issuance of the 2011 Drs., the 2028 Notes, the
Series D Preferred Stock Offering, the Series E
Preferred Stock Offering, the April 1998
Equity Offering and the proceeds form the Sale of
the September 1998 Joint Venture Sale Properties.... (15,226)
----------
Net Pro Forma Interest Adjustment.......... $ 6,279
==========
16
18
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
The depreciation and amortization adjustments reflect the charges for the
1998 Acquisition A Properties, the 1998 Acquisition I Properties, the 1998
Acquisition B Properties and the 1998 Acquisition II Properties from
January 1, 1998 through the earlier of their respective acquisition date or
September 30, 1998 as if such properties were acquired on January 1, 1997.
The pro forma loss in equity of joint venture adjustment (presented below)
reflects the Company's 10% equity interest in the operations of 111
properties acquired by the September 1998 Joint Venture during the period
October 9, 1998 through November 6, 1998 as if such acquisitions and their
respective operations had commenced on January 1, 1997.
September 1998
Joint Venture
(Dollars in
thousands)
-----------------
Total Revenues............ $ 14,203
Total Expenses............ $ (14,447)
-----------------
Net Loss.................. $ (244)
=================
Pro Forma Loss in Equity
of Joint Venture.......... $ (24)
=================
Income allocated to minority interest reflects income attributable to Units
owned by unitholders other than the Company. The minority interest
adjustment reflects a 16.2% minority interest for the nine months ended
September 30, 1998. 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, 1997 and to reflect the completion of
the April 1998 Equity Offering as of January 1, 1997.
The preferred stock dividend adjustment reflects preferred dividends
attributable to the preferred stock issued in conjunction with the Series D
Preferred Stock Offering and the Series E Preferred Stock Offering as if
such preferred stock was outstanding as of January 1, 1997.
17
19
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1997 1997 1998 1998
First Industrial Acquisition Acquisition Acquisition Acquisition
Realty A I A I
Trust, Inc. Properties Properties Properties Properties Subtotal
(Historical) (Historical) (Historical) (Historical) (Historical) Carry
Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d) Note 2 (e) Forward
---------------- ------------ ------------ ------------ ----------- -------
REVENUES:
Rental Income ............................. $ 164,389 $ 7,850 $ 51,228 $ 6,906 $ 24,862 $ 255,235
Tenant Recoveries and Other Income......... 46,028 2,030 9,093 2,927 4,136 64,214
Interest Income- Defeasance ............... 12,786 -- -- -- -- 12,786
--------- --------- --------- --------- --------- ---------
Total Revenues.......................... 223,203 9,880 60,321 9,833 28,998 332,235
--------- --------- --------- --------- --------- ---------
EXPENSES:
Real Estate Taxes ......................... 34,653 2,140 7,746 2,887 3,963 51,389
Repairs and Maintenance ................... 8,278 362 4,958 352 2,152 16,102
Property Management ....................... 7,850 283 2,149 200 861 11,343
Utilities ................................. 5,801 105 1,777 95 531 8,309
Insurance ................................. 568 91 615 64 252 1,590
Other ..................................... 2,612 4 243 26 97 2,982
General and Administrative ................ 6,248 -- -- -- -- 6,248
Interest .................................. 49,859 -- -- -- -- 49,859
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs ................ 2,812 -- -- -- -- 2,812
Depreciation and Other Amortization........ 39,573 -- -- -- -- 39,573
--------- --------- --------- --------- --------- ---------
Total Expenses.......................... 158,254 2,985 17,488 3,624 7,856 190,207
--------- --------- --------- --------- --------- ---------
Income from Operations Before Loss in
Equity of Joint Venture, Income
Allocated to Minority Interest and
Disposition of Interest Rate Protection
Agreement ................................. 64,949 6,895 42,833 6,209 21,142 142,028
Loss in Equity of Joint Venture ............. -- -- -- -- -- --
Income Allocated to Minority Interest ....... (5,312) -- -- -- -- (5,312)
Disposition of Interest Rate Protection
Agreement.................................. 1,430 -- -- -- -- 1,430
--------- --------- --------- --------- --------- ---------
Income From Operations..., .................. 61,067 6,895 42,833 6,209 21,142 138,146
Gain on Sales of Properties, ................ 5,003 -- -- -- -- 5,003
--------- --------- --------- --------- --------- ---------
Income Before Extraordinary Loss ............ 66,070 6,895 42,833 6,209 21,142 143,149
Less: Preferred Stock Dividends ............. (11,856) -- -- -- -- (11,856)
--------- --------- --------- --------- --------- ---------
Income Before Extraordinary Loss
Available to Common Stockholders........... $ 54,214 $ 6,895 $ 42,833 $ 6,209 $ 21,142 $ 131,293
========= ========= ========= ========= ========= =========
Income Before Extraordinary Loss
Available to Common Stockholders
Per Weighted Average Common Share
Outstanding:
Basic (31,508,240 for December 31,
1997)..................................... $ 1.72
=========
Diluted (31,813,926 for December 31,
1997)..................................... $ 1.70
=========
Pro Forma Income Before Extraordinary
Loss Available to Common
Stockholders Per Weighted Average
Common Share Outstanding:
Basic (37,317,486 for December 31,
1997).....................................
Diluted (37,552,752 for December 31,
1997).....................................
The accompanying notes are an integral part
of the pro forma financial statement.
18
20
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1998 1998
Acquisition Acquisition
B II First Industrial
Subtotal Properties Properties Pro Forma Realty
Carry (Historical) (Historical) Adjustments Trust, Inc.
Forward Note 2 (f) Note 2 (g) Note 2 (h) Pro Forma
-------- ----------- ------------ ----------- ----------------
REVENUES:
Rental Income ............................. $ 255,235 $ 3,622 $ 5,782 $ -- $ 264,639
Tenant Recoveries and Other Income......... 64,214 915 606 -- 65,735
Interest Income- Defeasance ............... 12,786 -- -- -- 12,786
--------- --------- --------- --------- ---------
Total Revenues.......................... 332,235 4,537 6,388 -- 343,160
--------- --------- --------- --------- ---------
EXPENSES:
Real Estate Taxes ......................... 51,389 706 682 -- 52,777
Repairs and Maintenance ................... 16,102 252 189 -- 16,543
Property Management ....................... 11,343 149 83 -- 11,575
Utilities ................................. 8,309 41 89 -- 8,439
Insurance ................................. 1,590 55 51 -- 1,696
Other ..................................... 2,982 22 30 -- 3,034
General and Administrative ................ 6,248 -- -- -- 6,248
Interest .................................. 49,859 -- -- 24,945 74,804
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs ................. 2,812 -- -- -- 2,812
Depreciation and Other Amortization........ 39,573 -- -- 20,349 59,922
--------- --------- --------- --------- ---------
Total Expenses.......................... 190,207 1,225 1,124 45,294 237,850
--------- --------- --------- --------- ---------
Income from Operations Before Loss in
Equity of Joint Venture, Income
Allocated to Minority Interest and
Disposition of Interest Rate Protection
Agreement ................................. 142,028 3,312 5,264 (45,294) 105,310
Loss in Equity of Joint Venture ............. -- -- -- (131) (131)
Income Allocated to Minority Interest ....... (5,312) -- -- (7,747) (13,059)
Disposition of Interest Rate Protection
Agreement.................................. 1,430 -- -- -- 1,430
--------- --------- --------- --------- ---------
Income From Operations..., .................. 138,146 3,312 5,264 (53,172) 93,550
Gain on Sales of Properties, ................ 5,003 -- -- -- 5,003
--------- --------- --------- --------- ---------
Income Before Extraordinary Loss ............ 143,149 3,312 5,264 (53,172) 98,553
Less: Preferred Stock Dividends ............. (11,856) -- -- (20,992) (32,848)
--------- --------- --------- --------- ---------
Income Before Extraordinary Loss
Available to Common Stockholders........... $ 131,293 $ 3,312 $ 5,264 $ (74,164) $ 65,705
========= ========= ========= ========= =========
Income Before Extraordinary Loss
Available to Common Stockholders
Per Weighted Average Common Share
Outstanding:
Basic (31,508,240 for December 31,
1997) ...................................
Diluted (31,813,926 for December 31,
1997) ...................................
Pro Forma Income Before Extraordinary
Loss Available to Common
Stockholders Per Weighted Average
Common Share Outstanding:
Basic (37,317,486 for December 31,
1997) ................................... $ 1.76
=========
Diluted (37,552,752 for December 31,
1997) ................................... $ 1.75
=========
The accompanying notes are an integral part
of the pro forma financial statement.
19
21
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial Realty Trust, Inc. (together with 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.
Since the filing of the Company's Form 8-K dated April 6, 1998, as amended
by the report on Form 8-K/A No. 1 filed on June 16, 1998, the Company acquired
72 industrial properties from unrelated parties and two industrial properties
from related parties during the period April 17, 1998 through November 6, 1998.
The combined purchase price of the 74 industrial properties acquired totaled
approximately $109.2 million, excluding closing costs incurred in conjunction
with the acquisition of the industrial properties. The 74 industrial
properties acquired were funded with either or a combination of working
capital, the issuance of limited partnership units in First Industrial, L.P.
(the "Units"), the assumption of secured debt, borrowings under the Company's
$300 million unsecured revolving credit facility (the "1997 Unsecured
Acquisition Facility") and the issuance of other unsecured debt. The Company
will operate the facilities as industrial rental property.
On September 28, 1998, the Company, through a limited liability company in
which First Industrial, L.P. (the "Operating Partnership") is the sole member,
entered into a joint venture arrangement (the "September 1998 Joint Venture")
with an institutional investor to invest in industrial properties. The Company,
through two limited liability companies in which the Operating Partnership is
the sole member, will own a 10% equity interest in the September 1998 Joint
Venture and will provide property and asset management services to the September
1998 Joint Venture. The September 1998 Joint Venture acquired 104 industrial
properties from unrelated parties and seven industrial properties (the
"September 1998 Joint Venture Sale Properties") from the Operating Partnership
during the period October 9, 1998 through November 6, 1998. The combined
purchase price of the 111 industrial properties acquired totaled approximately
$171.0 million, excluding closing costs incurred in conjunction with the
acquisition of the industrial properties. The 111 industrial properties
acquired by the September 1998 Joint Venture were funded with cash capital
contributions made by the partners of the September 1998 Joint Venture and the
assumption and issuance of secured debt. The September 1998 Joint Venture will
operate these facilities as industrial rental property.
The accompanying unaudited pro forma statement of operations for the
Company reflects the historical operations of the Company for the period January
1, 1997 through December 31, 1997 adjusted by the acquisition of one property on
January 9, 1997 (the "1997 Acquisition Property") reported on Form 8-K/A No. 1
dated February 12, 1997, the acquisition of 11 properties during the period
February 1, 1997 through July 14, 1997 (the "Other 1997 Acquisition Properties")
reported on Form 8-K/A No. 2 dated June 30, 1997, the acquisition of 25
properties during the period July 15, 1997 through October 31, 1997 (the "1997
Acquisition II Properties") reported on Form 8-K dated October 30, 1997, the
acquisition of four properties during the period November 1, 1997 through
December 31, 1997 (the "1997 Acquisition IV Properties") reported on Form 8-K/A
No. 2 dated December 11, 1997 (collectively, the "1997 Acquisition A
Properties"), the acquisition of 39 properties on January 31, 1997 (the "Lazarus
Burman Properties") reported on Form 8-K/A No. 1 dated February 12, 1997, the
acquisition of 15 properties (the "Punia Phase I Properties") on June 30, 1997
and 33 properties through December 5, 1997 (the "Punia Phase II Properties" and,
together with the Punia Phase I Properties, the "Punia Acquisition Properties")
which are reported on Form 8-K/A No.1 dated June 30, 1997, the acquisition of
two properties during the period February 1, 1997 through July 14, 1997 (the
"1997 Acquisition I Properties") reported on Form 8-K/A No. 2 dated June 30,
1997, the acquisition of 93 properties on October 30, 1997, two properties on
December 4, 1997 and 10 properties on January 30, 1998 (together, the "Pacifica
Acquisition Properties"), the acquisition of 64 properties on December 9, 1997
(the "Sealy Acquisition Properties") and seven properties on October 17, 1997
(the "1997 Acquisition III Properties") which are reported on Form 8-K dated
October 30, 1997, the acquisition of 28 properties and one property scheduled to
be acquired by March 31, 1998 which closed on July 16, 1998 (the "1997
Acquisition V Properties"), 36 properties (the "1997 Acquisition VI Properties")
and eight properties (the "1997 Acquisition VII Properties") during the period
November 1, 1997 through December 31, 1997 which are reported on Form 8-K/A No.
1 dated December 11, 1997, the acquisition of three properties during the period
November 1, 1997 through December 31, 1997 (the "1997 Acquisition VIII
Properties") reported on Form 8-K/A
20
22
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
No. 2 dated December 11, 1997 (collectively, the "1997 Acquisition I
Properties"), the acquisition of 34 properties (the "1998 Acquisition A
Properties") and 127 properties (the "1998 Acquisition I Properties") during the
period January 1, 1998 through April 16, 1998 reported on Form 8-K/A No.1
dated April 6, 1998 and the acquisition of 22 properties (the "1998 Acquisition
B Properties") and 48 properties (the "1998 Acquisition II Properties") during
the period April 17, 1998 through November 6, 1998 reported on this Form 8-K/A
No. 1 dated November 6, 1998 and the Company's 10% equity interest in the
September 1998 Joint Venture.
The accompanying unaudited pro forma statement of operations for the year
ended December 31, 1997 has been prepared as if the properties acquired
subsequent to December 31, 1996 had been acquired on either January 1, 1997 or
the lease commencement date if the property was developed and as if the
Company's 10% equity interest in the September 1998 Joint Venture had been
acquired on January 1, 1997. In addition, the unaudited pro forma statement of
operations is prepared as if the assumption of $29.0 million of secured debt,
the issuance on May 13, 1997 of $150.0 million of unsecured debt bearing
interest at 7.60% which matures on May 15, 2007 (the "2007 Notes"), the issuance
on May 13, 1997 of $100.0 million of unsecured debt bearing interest at 7.15%
which matures on May 15, 2027 (the "2027 Notes"), the issuance on May 22, 1997
of $100.0 million of unsecured debt bearing interest at 7.375% which matures on
May 15, 2011 (the "2011 Notes"), the issuance on November 20, 1997 of $50.0
million of unsecured debt bearing interest at 6.90% which matures on November
21, 2005 (the "2005 Notes"), the issuance on December 8, 1997 of $150.0 million
of unsecured debt bearing interest at 7.00% which matures December 1, 2006 (the
"2006 Notes"), the issuance on December 8, 1997 of $100.0 million of unsecured
debt bearing interest at 7.50% which matures on December 1, 2017 (the "2017
Notes"), the issuance on March 31, 1998 of $100 million of unsecured debt
bearing interest at 6.50% which matures on April 5, 2011 (the "2011 Drs."), the
issuance on July 14, 1998 of $200 million of unsecured debt bearing interest at
7.60% which matures on July 15, 2028 (the "2028 Notes"), the issuance on May 14,
1997 of 40,000 shares of 8.75%, $.01 par value, Series B Cumulative Preferred
Stock (the "Series B Preferred Stock Offering"), the issuance on June 6, 1997 of
20,000 shares of 8.63%, $.01 par value, Series C Cumulative Preferred Stock (the
"Series C Preferred Stock Offering"), the issuance on February 4, 1998 of 50,000
shares of 7.95%, $.01 par value, Series D Cumulative Preferred Stock (the
"Series D Preferred Stock Offering"), the issuance on March 18, 1998 of 30,000
shares of 7.90%, $.01 par value, Series E Cumulative Preferred Stock (the
"Series E Preferred Stock Offering"), the issuance on September 16, 1997 of
637,440 shares of $.01 par value common stock (the "September 1997 Equity
Offering"), the issuance on October 15, 1997 of 5,400,000 shares of $.01 par
value common stock (the "October 1997 Equity Offering") and the issuance on
April 23, 1998 of 1,112,644 shares of $.01 par value common stock (the "April
1998 Equity Offering") had been completed on January 1, 1997.
The unaudited pro forma statement of operations is not necessarily
indicative of what the Company's results of operations would have been for the
year ended December 31, 1997 had the transactions been consummated as described
above, nor does it purport to present the future results of operations of the
Company.
2. STATEMENT OF OPERATIONS PRO FORMA ASSUMPTIONS AND ADJUSTMENTS -
DECEMBER 31, 1997
(a) The historical operations reflect income from continuing operations of the
Company for the period January 1, 1997 through December 31, 1997 as
reported on the Company's Form 10-K dated March 24, 1998.
(b) The historical operations reflect the operations of the 1997 Acquisition A
Properties for the period January 1, 1997 through their respective
acquisition dates.
(c) The historical operations reflect the operations of the 1997 Acquisition I
Properties for the period January 1, 1997 through their respective
acquisition dates.
(d) The historical operations reflect the operations of the 1998 Acquisition A
Properties for the period January 1, 1997 through December 31, 1997.
21
23
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(e) The historical operations reflect the operations of the 1998 Acquisition I
Properties for the period January 1, 1997 through December 31, 1997.
(f) The historical operations reflect the operations of the 1998 Acquisition B
Properties for the period January 1, 1997 through December 31, 1997.
(g) The historical operations reflect the operations of the 1998 Acquisition II
Properties for the period January 1, 1997 through December 31, 1997.
(h) In conjunction with the acquisition of the 1997 Acquisition I Properties,
the Company assumed a $3.8 million mortgage loan (the "LB Mortgage Loan I")
and a $.7 million mortgage loan (the "LB Mortgage Loan II"). The interest
expense adjustment reflects interest on the LB Mortgage Loan I and the LB
Mortgage Loan II for the pro forma period and as if such indebtedness was
outstanding beginning January 1, 1997.
In conjunction with the acquisition of the 1997 Acquisition A Properties,
the Company assumed a $4.2 million mortgage loan (the "Acquisition Mortgage
Loan I") and a $3.6 million mortgage loan (the "Acquisition Mortgage Loan
III"). The interest expense adjustment reflects interest on the
Acquisition Mortgage Loan I and the Acquisition Mortgage Loan III for the
pro forma period and as if such indebtedness was outstanding beginning
January 1, 1997.
In conjunction with the acquisition of the 1997 Acquisition I Properties,
the Company assumed an $8.0 million mortgage loan (the "Acquisition
Mortgage Loan II"). The interest expense adjustment reflects interest on
the Acquisition Mortgage Loan II for the pro forma period and as if such
indebtedness was outstanding beginning January 1, 1997.
In conjunction with the acquisition of the 1998 Acquisition I Properties,
the Company assumed a $2.5 million mortgage loan (the "Acquisition Mortgage
Loan IV"). The interest expense adjustment reflects interest on the
Acquisition Mortgage Loan IV for the pro forma period and as if such
indebtedness was outstanding beginning January 1, 1997.
In conjunction with the acquisition of the 1998 Acquisition B Properties,
the Company assumed a $2.6 million mortgage loan (the "Acquisition Mortgage
Loan V"). The interest expense adjustment reflects interest on the
Acquisition Mortgage Loan V for the pro forma period as if such
indebtedness was outstanding beginning January 1, 1997.
In conjunction with the acquisition of the 1998 Acquisition II Properties,
the Company assumed a $1.0 million mortgage loan (the "Acquisition Mortgage
Loan VI"), a $1.3 million mortgage loan (the "Acquisition Mortgage Loan
VII") and a $1.3 million mortgage loan (the "Acquisition Mortgage Loan
VIII"). The interest expense adjustment reflects interest on the
Acquisition Mortgage Loan VI, the Acquisition Mortgage Loan VII and the
Acquisition Mortgage Loan VIII for the pro forma period as if such
indebtedness was outstanding beginning January 1, 1997.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings at LIBOR plus 1% for borrowings under the Company's
$200 million unsecured revolving acquisition facility (the "1996 Unsecured
Acquisition Facility") or LIBOR plus .8% for borrowings under the Company's
1997 Unsecured Acquisition Facility for the assumed purchase of the 1997
Acquisition A Properties, the 1997 Acquisition I Properties, the 1998
Acquisition A Properties, the 1998 Acquisition I Properties, the 1998
Acquisition B Properties and the 1998 Acquisition II Properties offset by
the interest savings related to the assumed repayment of $1.5 billion of
acquisition facility borrowings on January 1, 1997 from the proceeds of the
issuance of the 2007 Notes, the 2027 Notes, the 2011 Notes, the 2005 Notes,
the 2006 Notes, the 2017 Notes, the 2011 Drs., the 2028 Notes, the Series B
Preferred Stock Offering, the Series C Preferred Stock Offering, the Series
D Preferred Stock Offering, the Series E Preferred Stock Offering, the
September 1997 Equity Offering, the October 1997 Equity Offering and the
April
22
24
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1998 Equity Offering and also reflects an increase in interest expense due
to the issuance of the 2007 Notes, the 2027 Notes, the 2011 Notes, the 2005
Notes, the 2006 Notes, the 2017 Notes, the 2011 Drs. and the 2028 Notes as
if such unsecured debt was outstanding as of January 1, 1997.
(Dollars in Thousands)
Interest expense related to the LB
Mortgage Loan I, the LB Mortgage Loan
II, the Acquisition Mortgage Loan I, The
Acquisition Mortgage Loan II, the
Acquisition Mortgage Loan III, the
Acquisition Mortgage Loan IV, the
Acquisition Mortgage Loan V, the
Acquisition Mortgage Loan VI, the
Acquisition Mortgage Loan VII
and the Acquisition Mortgage Loan
VIII as if such indebtedness was outstanding
as of January 1, 1997.............. $ 2,002
Interest expense related to the assumed
earlier borrowings under the 1996
Unsecured Acquisition Facility and 1997 Unsecured
Acquisition Facility............... 56,226
Interest expense related to the
issuance of the 2007 Notes, the 2027 Notes,
the 2011 Notes, the 2005 Notes, the 2006 Notes,
the 2017 Notes, the 2011 Drs. and the 2028
Notes as if such debt was outstanding as of
January 1, 1997............................... 51,257
Interest savings due to the assumed repayment
of $1.5 billion of acquisition facility
borrowings on January 1, 1997 from the proceeds
of the issuance of the 2007 Notes, the 2027 Notes,
the 2011 Notes, the 2005 Notes, the 2006 Notes,
the 2017 Notes, the 2011 Drs., the 2028 Notes,
the Series B Preferred Stock Offering, the Series
C Preferred Stock Offering, the Series D Preferred
Stock Offering, the Series E Preferred Stock Offering,
the September 1997 Equity Offering, the October 1997
Equity Offering, the April 1998 Equity Offering and
the proceeds from the sale of the September 1998
Joint Venture Sale Properties........................ (84,540)
------------
Net Pro Forma Interest Adjustment............ $ 24,945
============
The depreciation and amortization adjustment reflects the charges for the
1997 Acquisition A Properties, the 1997 Acquisition I Properties, the 1998
Acquisition A Properties, the 1998 Acquisition I Properties, the 1998
Acquisition B Properties and the 1998 Acquisition II Properties from
January 1, 1997 through the earlier of their respective acquisition date or
December 31, 1997 as if such properties were acquired on January 1, 1997.
23
25
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
The pro forma loss in equity of joint venture adjustment (presented below)
reflects the Operating Partnership's 10% equity interest in the operations
of 111 properties acquired by the September 1998 Joint Venture during the
period October 9, 1998 through November 6, 1998 as if such acquisitions and
their respective operations had commenced on January 1, 1997.
September 1998
Joint Venture
(Dollars in
thousands)
----------------
Total Revenues............ $ 17,965
Total Expenses............ $ (19,276)
----------------
Net Loss.................. $ (1,311)
================
Pro Forma Loss in Equity
of Joint Venture.......... $ (131)
================
Income allocated to minority interest reflects income attributable to Units
owned by unitholders other than the Company. The minority interest
adjustment reflects a 16.7% minority interest for the year ended December
31, 1997. 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, 1997 and to reflect the completion of the
September 1997 Equity Offering, the October 1997 Equity Offering and the
April 1998 Equity Offering as of January 1, 1997.
The preferred stock dividend adjustment reflects preferred dividends
attributable to the preferred stock issued in conjunction with the Series B
Preferred Stock Offering, the Series C Preferred Stock Offering, the Series
D Preferred Stock Offering and the Series E Preferred Stock Offering as if
such preferred stock was outstanding as of January 1, 1997.
24
26
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1933, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST INDUSTRIAL REALTY TRUST, INC.
January 11, 1999 By: /s/ Michael J. Havala
---------------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting Officer)
25
27
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- ------------
23 Consent of PricewaterhouseCoopers LLP,
Independent Accountants
26
1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Form 8-K/A No. 1 dated November 6, 1998
and the incorporation by reference into the Registrant's six previously filed
Registration Statements on Form S-3 (File Nos. 33-95190, 333-03999, 333-21887,
333-57355, 333-43641 and 333-53835) and the Registrant's four previously filed
Registration Statements on Form S-8 (File No.'s 33-95188, 333-36699, 333-45317
and 333-45317) of our report dated December 31, 1998 on our audit of the
combined historical statement of revenues and certain expenses of 1998
Acquisition II Properties for the year ended December 31, 1997.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
January 11, 1999
27
