Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Annual Report -- [x] Reg. S-K Item 405 83 473K
2: EX-3.2 Articles of Incorporation/Organization or By-Laws 18 57K
3: EX-10.36 Material Contract 11 48K
4: EX-10.37 Material Contract 11 49K
5: EX-10.55 Material Contract 2 12K
6: EX-10.56 Material Contract 2 12K
7: EX-10.57 Material Contract 2 15K
8: EX-10.58 Material Contract 4 20K
9: EX-10.59 Material Contract 4 20K
10: EX-10.60 Material Contract 2 15K
11: EX-10.61 Material Contract 2 13K
12: EX-10.62 Restricted Share Award 7 31K
13: EX-10.63 Material Contract 7 31K
14: EX-10.64 Material Contract 5 22K
15: EX-10.65 Material Contract 5 22K
16: EX-10.66 Material Contract 5 22K
17: EX-10.67 Exhibit 67 5 22K
18: EX-10.68 Material Contract 5 22K
19: EX-10.69 Material Contract 5 22K
20: EX-10.70 Material Contract 5 22K
21: EX-21.1 Subsidiaries of the Registrant 5 16K
22: EX-23.1 Consent of Experts or Counsel 1 9K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from __________________________ to ___________________
Commission file number 1-9106
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Brandywine Realty Trust
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(Exact name of registrant as specified in its charter)
Maryland 23-2413352
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
14 Campus Boulevard, Newtown Square, Pennsylvania 19073
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 325-5600
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Shares of Beneficial Interest,
(par value $0.01 per share) New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: none
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(Title of class)
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the Common Shares of Beneficial Interest held by
non-affiliates of the registrant was approximately $652.5 million as of March
15, 2001. The aggregate market value has been computed by reference to the
closing price of the Common Shares of Beneficial Interest on the New York Stock
Exchange on such date. An aggregate of 36,090,761 Common Shares of Beneficial
Interest were outstanding as of March 15, 2001.
Documents Incorporated By Reference
Portions of the proxy statement for the Annual Meeting of Shareholders of
Brandywine Realty Trust to be held in 2001 are incorporated by reference into
Part III of this Form 10-K.
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TABLE OF CONTENTS
FORM 10-K
Page
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PART I........................................................................ 4
Item 1. Business............................................................ 4
Item 2. Properties..........................................................14
Item 3. Legal Proceedings...................................................25
Item 4. Submission of Matters to a Vote of Security Holders.................26
PART II.......................................................................26
Item 5. Market for Registrant's Common Equity and
Related Shareholder Matters........................................26
Item 6. Selected Financial Data.............................................27
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................28
Item 7A. Quantitative and Qualitative Disclosure About Market Risk...........32
Item 8. Financial Statements and Supplementary Data.........................32
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure...........................................33
PART III......................................................................33
Item 10. Trustees and Executive Officers of the Registrant...................33
Item 11. Executive Compensation..............................................33
Item 12. Security Ownership of Certain Beneficial Owners and Management......33
Item 13. Certain Relationships and Related Transactions......................33
PART IV.......................................................................34
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.....34
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PART I
Item 1. Business
General
Brandywine Realty Trust (collectively with its subsidiaries, the "Company") is a
self-administered and self-managed real estate investment trust ("REIT") active
in acquiring, developing, redeveloping, leasing and managing office and
industrial properties. As of December 31, 2000, the Company owned 197 office
properties, 52 industrial facilities and one mixed-use property (the
"Properties") containing an aggregate of approximately 16.5 million net rentable
square feet and managed an additional 47 properties containing 4.0 million net
rentable square feet. As of December 31, 2000, the Company also owned
approximately 477 acres of undeveloped land and held options to purchase
approximately 89 additional acres. The properties, owned and managed by the
Company, are located in the office and industrial markets surrounding
Philadelphia, Pennsylvania, New Jersey, Long Island, New York and Richmond,
Virginia.
As of December 31, 2000, the Company also owned economic interests in thirteen
real estate ventures (the "Real Estate Ventures") with an aggregate investment
of $33.6 million (net of returns). Nine of the Real Estate Ventures own ten
office buildings that contain an aggregate of approximately 1.3 million net
rentable square feet; two Real Estate Ventures are developing two office
buildings that will contain, upon completion, an aggregate of approximately
316,000 net rentable square feet; one Real Estate Venture is developing a hotel
property that will contain, upon completion, approximately 137 rooms; and one
Real Estate Venture holds approximately six acres of land for future
development.
Subsequent Event
On March 14, 2001, the Company announced an exchange of properties with Prentiss
Properties Acquisition Partners, L.P. ("Prentiss") whereby the Company agreed to
acquire from Prentiss 30 properties containing approximately 1.6 million net
rentable square feet, a four-story 103,000 square foot office building currently
under construction and approximately 12.9 acres of developable land. These
properties are located in Pennsylvania, New Jersey and Delaware. As of March 14,
2001, the 30 properties were approximately 90% leased to 119 tenants.
As part of its agreement to acquire these properties, the Company has agreed to
convey four office properties located in Northern Virginia that contain an
aggregate of approximately 657,000 net rentable square feet, to assume
approximately $79.8 million of mortgage debt secured by certain of the Prentiss
properties, to pay approximately $19.6 million at closing and to pay an
additional amount of approximately $15.4 million over a three year period
subsequent to closing.
The Company has separately agreed to contribute to Prentiss its interest in a
joint venture that owns two additional office properties that contain an
aggregate of approximately 451,650 net rentable square feet in exchange for a
combination of preferred and common units of limited partnership interest in
Prentiss having an approximate value of $10.65 million. A more complete summary
of the pending transaction with Prentiss is contained in the Company's Current
Report on Form 8-K filed with the Securities and Exchange Commission on March
23, 2001. As indicated in the Form 8-K, consummation of the transaction with
Prentiss is subject to customary closing conditions and no assurance can be
given that all or part of the transaction will be cosumated.
Business Objectives
The Company's business objectives are to:
o maximize cash flow through leasing strategies designed to capture
potential rental growth as rental rates increase and as below-market
leases are renewed;
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o ensure a high tenant retention rate through aggressive tenant service
programs responsive to the varying needs of the Company's diverse tenant
base;
o increase economic diversification while maximizing economies of scale;
o develop high-quality office and industrial properties on the Company's
existing inventory of land, as warranted by market conditions;
o capitalize on management's redevelopment expertise to selectively
acquire, redevelop and reposition underperforming properties in
desirable locations;
o acquire high-quality office and industrial properties and portfolios of
such properties at attractive yields in selected submarkets within the
Mid-Atlantic region (including Delaware, New Jersey, New York,
Pennsylvania and Virginia) that management expects will experience
economic growth and that provide barriers to entry;
o enhance the Company's investment strategy through the pursuit of joint
venture opportunities with high-quality partners having attractive real
estate holdings or significant financial resources; and
o execute an investment strategy that effectively balances creating
long-term growth opportunities with the Company's public market
valuation.
The Company expects to continue to concentrate its real estate activities in
submarkets within the Mid-Atlantic region where it believes that: (i) barriers
to entry (such as zoning restrictions, utility availability, infrastructure
limitations, development moratoriums and limited developable land) will create
supply constraints on office and industrial space; (ii) current market rents and
absorption statistics justify limited new construction activity; (iii) it can
maximize market penetration by accumulating a critical mass of properties and
thereby enhance operating efficiencies; and (iv) there is potential for economic
growth.
The Company's executive offices are located at 14 Campus Boulevard, Suite 100,
Newtown Square, Pennsylvania 19073 and its telephone number is (610) 325-5600.
Organization
The Company was organized and commenced its operations in 1986 as a Maryland
real estate investment trust. The Company owns its assets and conducts its
operations through Brandywine Operating Partnership, L.P., a Delaware limited
partnership (the "Operating Partnership"), and subsidiaries of the Operating
Partnership. As of December 31, 2000, the Company's ownership interest in the
Operating Partnership entitled it to approximately 94.3% of the Operating
Partnership's distributions after distributions by the Operating Partnership to
holders of its preferred units. The structure of the Company as an "UPREIT" is
designed, in part, to permit persons contributing properties (or interests in
properties) to the Company to defer some or all of the tax liability they might
otherwise incur in a sale of properties. The Company conducts its real estate
management services through Brandywine Realty Services Corporation (the
"Management Company"), a wholly-owned subsidiary of the Operating Partnership.
See "Management Company."
Credit Facility
The Company maintains an unsecured credit facility (the "Credit Facility") that
bears interest at LIBOR plus 1.5%, with the spread over LIBOR subject to
reductions by .125% to .35% based on the Company's leverage. The maximum amount
available under the Credit Facility is $450 million. As of December 31, 2000,
the Company had unused availability under the Credit Facility of $96.6 million.
The Credit Facility matures in September 2001, subject to the Company's right
upon payment of a fee to extend the maturity to September 2002.
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Additional Debt
Mortgage Indebtedness. The following table sets forth information regarding the
Company's mortgage indebtedness outstanding at December 31, 2000:
[Download Table]
Annual
Debt
Principal Interest Service
Balance Rate (in 000's) Maturity
Property / Location (in 000's) (a) (a)(b) Date
-------------------------------------- ---------- -------- ---------- --------
One & Three Christina, Park 80 1 & 11,
and 10000 & 15000 Midlantic Drive $116,190 7.18% 9,975 2/04
Grande B (29 properties) 85,044 7.48% 7,459 7/27
100, 200 and 300 Berwyn Park, 50 East
State Street, and 33 West State Street 73,000 8.75% 7,873 4/02
Grande A (24 properties) 68,613 7.48% 7,419 7/27
993, 997 and 2000 Lenox Drive, 2000,
4000, 9000 Midlantic Drive and I
Righter Parkway 68,000 8.05% 1,548 10/11
Arboretum 1, 11, 111 & V 25,800 8.00% 2,064 7/01
Grande A (24 properties) 20,000 7.47% 1,543 7/27
630 Alledale Road 18,095 8.12% 128 2/03
1009 Lenox Drive 14,573 8.25% 1,654 7/03
457 Haddonfield Road 8,725 8.96% 849 3/01
One - Three Greentree Centre 6,575 7.56% 697 1/02
Norriton Office Center 5,521 8.50% 528 10/07
1120 Executive Plaza 5,064 9.88% 828 3/02
Grande A (24 properties) 5,035 7.64% 388 7/27
1000 Howard Boulevard 4,862 9.25% 799 11/04
I nterstate Center 1,529 8.75% 233 3/07
Corporate Center Drive 1,251 8.00% 83 6/01
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Total mortgage indebtedness $527,877 $44,068
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(a) For loans that bear interest at a variable rate, the rates in effect at
December 31, 2000 have been assumed to remain constant.
(b) "Annual Debt Service" is calculated by annualizing the regularly scheduled
principal and interest amortization.
Guaranties. As of December 31, 2000, the Company had guaranteed repayment of
approximately $16.5 million of loans for the Real Estate Ventures. The Company
selectively provides completion guaranties on behalf of Real Estate Ventures as
part of their development activities. As of December 31, 2000, the Company had
provided completion guaranties relating to the construction of three development
projects, two of which were substantially completed during the first quarter of
2001, the other expected to be completed during the fourth quarter of 2001.
Management Activities
The Company conducts its real estate management services business through the
Management Company. As of December 31, 2000, the Management Company was managing
properties containing an aggregate of approximately 20.3 million net rentable
square feet, of which approximately 16.3 million net rentable square feet
related to Properties owned by the Company or subject to purchase options held
by the Company, and approximately 4.0 million net rentable square feet related
to properties owned by unaffiliated third parties.
Geographic Segments
The Company currently manages its portfolio within three segments: (1)
Pennsylvania, (2) New Jersey/New York and (3) Virginia. (See Note 10 to the
Financial Statements.) The Company does not have any foreign operations and its
business is not seasonal.
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Competition
The leasing of real estate is highly competitive. The Properties compete for
tenants with similar properties located in its markets primarily on the basis of
location, total occupancy costs (including base rent and operating expenses),
services provided, and the design and condition of the improvements. The Company
also faces competition when attempting to acquire real estate, including
competition from domestic and foreign financial institutions, other REIT's, life
insurance companies, pension funds, partnerships and individual investors.
Employees
As of December 31, 2000, the Company employed 262 persons.
Regulations
Many laws and governmental regulations are applicable to the Properties and
changes in these laws and regulations or their interpretation by agencies and
the courts occur frequently. See "Risk Factors - Environmental problems are
possible and may be costly."
Risk Factors
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this Annual
Report on Form 10-K and other materials filed by the Company with the Securities
and Exchange Commission (as well as information included in oral statements or
other written statements made or to be made by the Company) contain statements
that are or will be forward-looking, such as statements relating to business
development and real estate development activities, acquisitions, dispositions,
future capital expenditures, financing sources and availability, and the effects
of regulation (including environmental regulation) and competition. Although the
Company believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, it can give no assurance that
its expectations will be achieved. As forward-looking statements, these
statements involve risks, uncertainties and other factors that could cause
actual results to differ materially from the expected results and, accordingly,
such results may differ from those expressed in any forward-looking statements
made by, or on behalf of, the Company. These risks, uncertainties and other
factors include, without limitation, uncertainties affecting real estate
businesses generally (such as entry into new leases, renewals of leases and
dependence on tenants' business operations), risks relating to the Company's
ability to maintain and increase property occupancy and rental rates, risks
relating to construction and development activities, acquisitions, dispositions,
possible environmental liabilities, risks relating to leverage and debt service
(including availability of financing terms acceptable to the Company and
sensitivity of the Company's operations and financing arrangements to
fluctuations in interest rates), dependence on the primary markets in which the
Company's properties are located, the existence of complex regulations relating
to status as a REIT and the adverse consequences of the failure to qualify as a
REIT, and the potential adverse impact of market interest rates on the market
price for the Company's securities. The Company assumes no obligation to update
or supplement forward-looking statements that become untrue because of
subsequent events. Prospective investors should carefully consider the following
risk factors together with the other reports and documents the Company files
with the Securities and Exchange Commission, which may include additional or
more current relevant information.
o We depend on the performance of our primary markets, and changes in such
markets may adversely affect our financial condition.
Our Properties are located in suburban markets in Pennsylvania, New Jersey,
New York, Virginia and Delaware. Like other real estate markets, these
markets have experienced economic downturns in the past, and future
declines in any of these real estate markets could adversely affect our
operations or cash flow and ability to make distributions to shareholders.
Our financial performance will be particularly sensitive to the economic
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conditions in these markets. Our revenues and the value of our Properties
may be adversely affected by a number of factors, including the economic
climate in these markets (which may be adversely impacted by business
layoffs, industry slowdowns, changing demographics and other factors) and
real estate conditions in these markets (such as oversupply of or reduced
demand for office and industrial properties). These factors, when and if
they occur in the area in which our Properties are located, would adversely
affect our cash flow and ability to make distributions to shareholders.
Our ability to make distributions is subject to various risks.
We pay quarterly distributions to our shareholders. Our ability to make
distributions in the future will depend upon:
o the performance of our Properties;
o capital expenditures with respect to existing and newly acquired
properties;
o the amount of, and the interest rates on, our debt; and
o the absence of significant expenditures relating to environmental and
other regulatory matters.
Certain of these matters are beyond our control and any significant
difference between our expectations and actual results could have a
material adverse effect on our cash flow and our ability to make
distributions to shareholders.
o We may be unable to renew leases or relet space as leases expire.
If tenants fail to renew their leases upon expiration, we may be unable to
relet the subject space. Even if the tenants do renew their leases or we
can relet the space, the terms of renewal or reletting (including the cost
of required renovations) may be less favorable than current lease terms.
Certain leases grant the tenants an early termination right upon payment of
a termination penalty. While we have estimated our expenditures for new and
renewal leases for 2001 and 2002, no assurances can be given as to the
accuracy of such estimates.
o Financially distressed tenants may limit our ability to realize the value
of our investments.
Following a tenant's lease default, we may experience delays in enforcing
our rights as a landlord and may incur substantial costs in protecting our
investment. In addition, a tenant may seek bankruptcy law protection which
could relieve the tenant from its obligation to make lease payments.
o We face significant competition from other real estate developers.
We compete with real estate developers, operators and institutions for
tenants and acquisition and development opportunities. Some of these
competitors have significantly greater financial resources than we do. No
assurances can be given that this competition will not adversely affect our
cash flow and ability to make distributions to shareholders.
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o Because real estate is illiquid, we may not be able to sell properties when
appropriate.
Real estate investments generally cannot be sold quickly. We may not be
able to vary our portfolio promptly in response to economic or other
conditions. In addition, the Internal Revenue Code of 1986 (the "Code")
limits our ability to sell properties held for fewer than four years.
Purchase options and rights of first refusal held by certain tenants may
also limit our ability to sell certain properties. Any of these factors
could adversely affect our cash flow and ability to make distributions to
shareholders as well as the ability of someone to purchase us, even if a
purchase were in our shareholders' best interests.
o We have agreed not to sell certain of our properties.
We have agreed with the former owners of 77 of our properties aggregating
approximately 4.4 million net rentable square feet not to sell these
properties for varying periods of time in transactions that would trigger
taxable income to the former owners, subject to certain exceptions. Some of
these agreements are with affiliates of current trustees of our company. In
addition, we may enter into similar agreements with future sellers of
properties. These agreements generally provide that we may dispose of the
applicable properties in transactions that qualify as tax-free exchanges
under Section 1031 of the Code or in other tax deferred transactions.
Therefore, without suffering adverse financial consequences, we may be
precluded from selling certain properties other than in transactions that
would qualify as tax-free exchanges for federal income tax purposes.
o Changes in the law may adversely affect our cash flow.
Because increases in income and service taxes are generally not passed
through to tenants under leases, such increases may adversely affect our
cash flow and ability to make expected distributions to shareholders. The
Properties are also subject to various regulatory requirements, such as
those relating to fire and safety. Our failure to comply with these
requirements could result in the imposition of fines and damage awards.
While we believe that the Properties are currently in material compliance
with all such requirements, there can be no assurance that these
requirements will not change or that newly imposed requirements will not
require significant unanticipated expenditures.
o By holding properties through the Operating Partnership and various joint
ventures, we are exposed to additional risks.
We own the Properties and interests in Real Estate Ventures through the
Operating Partnership. In the future, we expect to continue to participate
with other entities in property ownership through joint ventures or
partnerships. Partnership or joint venture investments may involve risks
not otherwise present in direct investments. Such risks include:
o the potential bankruptcy of our partners or co-venturers;
o a conflict between our business goals and those of our partners or
co-venturers; and
o actions taken by our partners or co-venturers contrary to our
instructions or objectives.
There is no limitation under our organizational documents as to the amount
of funds which we may invest in partnerships or joint ventures.
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o New development and acquisitions may fail to perform in accordance with our
expectations and may require development and renovation costs exceeding our
estimates.
Changing market conditions and the higher yielding allocation of capital to
our development program, have reduced our acquisitions. Once made, our
investments may fail to perform in accordance with our expectations. Our
actual renovation and improvement costs in bringing an acquired property up
to market standards may exceed our estimates.
In addition, we are active in developing and redeveloping office
properties. Risks associated with these activities include:
o the unavailability of favorable financing, including permanent
financing to repay construction financing;
o construction costs exceeding original estimates;
o construction and lease-up delays resulting in increased debt service
and construction costs; and
o insufficient occupancy levels and rental rates at a newly completed
property causing a property to be unprofitable.
o Our indebtedness subjects us to additional risks.
Debt Financing and Existing Debt Maturities. We are subject to risks
normally associated with debt financing, such as the insufficiency of cash
flow to meet required payment obligations and the inability to refinance
existing indebtedness. If our debt cannot be paid, refinanced or extended
at maturity, in addition to our failure to repay our debt, we may not be
able to make distributions to shareholders at expected levels or at all.
Furthermore, an increase in our interest expense could adversely affect our
cash flow and ability to make distributions to shareholders. If we do not
meet our mortgage financing obligations, any properties securing such
indebtedness could be foreclosed on, which would have a material adverse
effect on our cash flow and ability to make distributions and, depending on
the number of properties foreclosed on, could threaten our continued
viability.
Risk of Rising Interest Rates and Variable Rate Debt. Increases in interest
rates on variable rate indebtedness would increase our interest expense,
which could adversely affect our cash flow and ability to make
distributions to shareholders.
No Limitation on Debt. Our organizational documents do not contain any
limitation on our ability to incur additional debt. Accordingly, we could
increase our outstanding debt without restriction. The increased debt
service could adversely affect our cash flow and ability to make
distributions and could increase the risk of default on our indebtedness.
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o Our status as a REIT is dependent on compliance with federal income tax
requirements.
Our failure to qualify as a REIT would have serious adverse consequences to
our shareholders. We believe that since 1986, we have qualified for
taxation as a REIT for federal income tax purposes. We plan to continue to
meet the requirements for taxation as a REIT. Many of these requirements
are highly technical and complex. The determination that we are a REIT
requires an analysis of various factual matters and circumstances that may
not be totally within our control. For example, to qualify as a REIT, at
least 95% of our gross income must come from certain sources that are
itemized in the REIT tax laws. We are also required to distribute to
shareholders at least 95% of our REIT taxable income (excluding capital
gains). The fact that we hold our assets through the Operating Partnership
and its subsidiaries further complicates the application of the REIT
requirements. Even a technical or inadvertent mistake could jeopardize our
REIT status. Furthermore, Congress and the IRS might change the tax laws
and regulations, and the courts might issue new rulings that make it more
difficult, or impossible, for us to remain qualified as a REIT. We do not
believe, however, that any pending or proposed tax law changes would
jeopardize our REIT status.
To maintain REIT status, a REIT may not own more than 10% of the voting
stock of any corporation, except for a qualified REIT subsidiary (which
must be wholly-owned by the REIT) or another REIT.
Arthur Andersen LLP, our tax advisor, has given us an opinion to the effect
that, beginning with our taxable year ended December 31, 1986, we have been
organized and have operated in conformity with the requirements for
qualification and taxation as a REIT under the Internal Revenue Code (the
"Code") and that our current organization and method of operation will
enable us to continue to so qualify. The opinion of Arthur Andersen LLP is
based on assumptions and factual representations made by us regarding our
ability to meet the requirements for qualification as a REIT. Such opinion
is not binding on the IRS or any court. Moreover, Arthur Andersen LLP does
not review or monitor our compliance with the requirements for REIT
qualification on an ongoing basis. We cannot guarantee that we will be
qualified and taxed as a REIT, because our qualification and taxation as a
REIT will depend upon our ability to meet, on an ongoing basis, the
requirements imposed under the Code.
If we fail to qualify as a REIT, we would be subject to federal income tax
at regular corporate rates. Also, unless the IRS granted us relief under
certain statutory provisions, we would remain disqualified as a REIT for
four years following the year we first failed to qualify. If we failed to
qualify as a REIT, we would be required to pay significant income taxes and
would, therefore, have less money available for investments or for
distributions to shareholders. This would likely have a material adverse
effect of the value of our securities. In addition, we would no longer be
required to make any distributions to shareholders.
In order to make the distributions required to maintain our REIT status, we
may need to borrow funds. To obtain the favorable tax treatment associated
with REIT qualification, we generally will be required to distribute to
shareholders at least 95% of our annual REIT taxable income (excluding net
capital gains). In addition, we will be subject to tax on our undistributed
net taxable income and net capital gain and a 4% nondeductible excise tax
on the amount, if any, by which certain distributions paid by us with
respect to any calendar year are less than the sum of 85% of ordinary
income plus 95% of capital gain net income for the calendar year, plus
certain undistributed amounts from prior years.
We intend to make distributions to shareholders to comply with the
distribution provisions of the Code and to avoid income and other taxes.
Our income will consist primarily of our share of the income of the
Operating Partnership and our cash flow will consist primarily of our share
of distributions from the Operating Partnership. Differences in timing
between the receipt of income and the payment of expenses in arriving at
taxable income (of the Company or the Operating Partnership) and the effect
of required debt amortization payments could require us to borrow funds on
a short-term basis or to liquidate funds on adverse terms to meet the REIT
qualification distribution requirements.
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Failure of the Operating Partnership (or a subsidiary partnership) to be
treated as a partnership would have serious adverse consequences to our
shareholders. If the IRS were to successfully challenge the tax status of
the Operating Partnership or any of its subsidiary partnerships for federal
income tax purposes, the Operating Partnership or the affected subsidiary
partnership would be taxable as a corporation. In such event, we would
cease to qualify as a REIT and the imposition of a corporate tax on the
Operating Partnership or a subsidiary partnership would reduce the amount
of cash available for distribution from such partnership to us and our
shareholders.
We do pay some taxes. Even if we qualify as a REIT, we are required to pay
certain federal, state and local taxes on our income and property. In
addition, the Management Company is subject to federal, state and local
income tax at regular corporate rates on its net taxable income derived
from its management, leasing and related service business. If we have net
income from a prohibited transaction, such income will be subject to a 100%
tax.
We own a subsidiary REIT. One of our subsidiaries, Atlantic American
Properties Trust ("AAPT"), that indirectly holds approximately 24 of the
Properties, elected to be taxed as a REIT for the year ended December 31,
1997. So long as we seek to maintain AAPT's REIT status, AAPT will be
subject to all the requirements and risks associated with maintaining REIT
status summarized above, including the limitation on the ownership of more
than 10% of the voting securities of any corporation (other than a
qualified REIT subsidiary or another REIT). AAPT indirectly owns non-voting
common stock issued by a corporation which is neither a qualified REIT
subsidiary nor a REIT.
o Environmental problems at the Properties are possible and may be costly.
Federal, state and local laws, ordinances and regulations may require a
current or previous owner or operator of real estate to investigate and
clean up hazardous or toxic substances or releases at such property. The
owner or operator may be forced to pay for property damage and for
investigation and clean-up costs incurred by others in connection with
environmental contamination. Such laws typically impose clean-up
responsibility and liability without regard to whether the owner or
operator knew of or caused the presence of the contaminants. Even if more
than one person may have been responsible for the contamination, each
person covered by the environmental laws may be held responsible for all of
the clean-up costs incurred. In addition, third parties may sue the owner
or operator of a site for damages and costs resulting from environmental
contamination emanating from that site. These costs may be substantial and
the presence of such substances may adversely affect the owner's ability to
sell or rent such property or to borrow using such property as collateral.
Independent environmental consultants have conducted a standard Phase I or
similar general environmental site assessment ("ESA") of each of our
Properties to identify potential sources of environmental contamination and
assess environmental regulatory compliance. For a number of the Properties,
the Phase I ESA either referenced a prior Phase II ESA obtained on such
Property or prompted us to have a Phase II ESA of such Property conducted.
A Phase II ESA generally involves invasive procedures, such as soil
sampling and testing or the installation and monitoring of groundwater
wells. While the ESAs conducted have identified environmental contamination
on a few of the Properties, they have not revealed any environmental
contamination, liability or compliance concern that we believe would have a
material adverse effect on our cash flow or ability to make distributions
to shareholders.
It is possible that the existing ESAs relating to the Properties do not
reveal all environmental contaminations, liabilities or compliance concerns
which currently exist, and it is also possible that the cost of remediating
identified contamination may exceed current estimates. In addition, future
properties which we acquire may be subject to environmental conditions.
-12-
o Some potential losses are not covered by insurance.
We carry comprehensive liability, fire, extended coverage and rental loss
insurance on all of our Properties. We believe the policy specifications
and insured limits of these policies are adequate and appropriate. There
are, however, types of losses, such as lease and other contract claims that
generally are not insured. Should an uninsured loss or a loss in excess of
insured limits occur, we could lose all or a portion of the capital we have
invested in a property, as well as the anticipated future revenue from the
property. In such an event, we might nevertheless remain obligated for any
mortgage debt or other financial obligations related to the property.
o We are dependent upon our key personnel.
We are dependent upon the efforts of our executive officers, particularly
Anthony A. Nichols, Sr. and Gerard H. Sweeney. The loss of their services
could have an adverse affect on our operations. Although we have employment
agreements with Messrs. Nichols and Sweeney for terms extending to December
31, 2003, such agreements do not restrict their ability to become employed
by a competitor following the termination of their employment with us.
o Certain limitations exist with respect to a third party's ability to
acquire us or effectuate a change in control.
Limitations imposed to protect our REIT status. In order to protect us
against loss of our REIT status, our Declaration of Trust limits any
shareholder from owning more than 9.8% in value of our outstanding shares,
subject to certain exceptions. The ownership limit may have the effect of
precluding acquisition of control of the Company. If anyone acquires shares
in excess of the ownership limit, we may:
o consider the transfer to be null and void;
o not reflect the transaction on our books;
o institute legal action to stop the transaction;
o not pay dividends or other distributions with respect to those shares;
o not recognize any voting rights for those shares; and
o consider the shares held in trust for the benefit of a person to whom
such shares may be transferred.
Limitation due to our ability to issue preferred shares. Our Declaration of
Trust authorizes the Board of Trustees to issue preferred shares. The Board
of Trustees may establish the preferences and rights of any preferred
shares issued which could have the effect of delaying or preventing someone
from taking control of us, even if a change in control were in our
shareholders' best interests.
Limitations imposed by the Business Combination Law. The Maryland General
Corporation Law, as applicable to Maryland real estate investment trusts,
establishes special restrictions against "business combinations" between a
Maryland real estate investment trust and "interested shareholders" or
their affiliates unless an exemption is applicable. An interested
shareholder includes a person who beneficially owns, and an affiliate or
associate of the trust who, at any time within the two-year period prior to
the date in question, was the beneficial owner of, ten percent or more of
the voting power of our then-outstanding voting shares. Among other things,
the law prohibits (for a period of five years) a merger and certain other
transactions between the trust and an interested shareholder unless the
Board of Trustees approved the transaction before the party became an
interested shareholder. The five-year period runs from the most recent date
-13-
on which the interested shareholder became an interested shareholder.
Thereafter, any such business combination must be recommended by the Board
of Trustees and approved by two super-majority shareholder votes unless,
among other conditions, the trust's common shareholders receive a minimum
price for their shares and the consideration is received in cash or in the
same form as previously paid by the interested shareholder for its shares
or unless the Board of Trustees approved the transaction before the party
in question became an interested shareholder. The business combination
statute could have the effect of discouraging offers to acquire us and of
increasing the difficulty of consummating any such offers, even if our
acquisition would be in our shareholders' best interests. We have exempted
any business combination involving Safeguard Scientifics, Inc., the
Commonwealth of Pennsylvania State Employees' Retirement System and a
voting trust established for its benefit, Morgan Stanley Asset Management
Inc. and two funds managed by it, Lazard Freres Real Estate Investors,
L.L.C., Five Arrows Realty Securities III L.L.C., Gerard H. Sweeney (the
Company's President and Chief Executive Officer) and any of their
respective affiliates or associates.
o The issuance of Preferred Shares may adversely affect the rights of holders
of Common Shares.
Because the Board of Trustees has the power to establish the preferences
and rights of each class or series of Preferred Shares, it may afford the
holders in any series or class of preferred shares preferences,
distributions, powers and rights, voting or otherwise, senior to the rights
of holders of Common Shares.
Item 2. Properties
Properties
As of December 31, 2000, the Company owned 197 office properties, 52 industrial
facilities and one mixed-use property that contained an aggregate of
approximately 16.5 million net rentable square feet. The properties are located
in the office and industrial markets surrounding Philadelphia, Pennsylvania, New
Jersey, Long Island, New York and Richmond, Virginia. As of December 31, 2000,
the Properties (excluding two Properties under redevelopment) were approximately
95.6 % leased to 1,246 tenants and had an average age of approximately 16.6
years. The office Properties are primarily one to three story suburban office
buildings containing an average of approximately 66,000 net rentable square
feet. The industrial Properties accommodate a variety of tenant uses, including
light manufacturing, assembly, distribution and warehousing. The Company carries
comprehensive liability, fire, extended coverage and rental loss insurance
covering all of the Properties, with policy specifications and insured limits
which the Company believes are adequate.
If the transaction with Prentiss is consummated on the terms summarized in Item
1. Business, the Company's portfolio will consist of 221 office properties
containing an aggregate of approximately 14.5 million net rentable square feet,
55 industrial properties containing an aggregate of approximately 2.8 million
net rentable square feet and one mixed use property containing approximately
185,000 net rentable square feet. In addition, the Company's land holdings will
consist of approximately 582 acres, which management estimates can accommodate
approximately 4.9 million net rentable square feet of office and industrial
development.
-14-
The following table sets forth certain information with respect to the
Properties at December 31, 2000:
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
PENNSYLVANIA SEGMENT
100-300 Gundy Drive Reading PA 1970 417,301 100.0% $ 6,843
Philadelphia Marine Center (f) Philadelphia PA Various 181,900 100.0% 1,279
300 Corporate Center Drive Camp Hill PA 1989 175,280 100.0% 3,388
111 Presidential Boulevard Bala Cynwyd PA 1997 172,798 100.0% 4,458
751-761 Fifth Avenue King Of Prussia PA 1967 158,000 100.0% 490
630 Allendale Road King of Prussia PA 2000 150,000 100.0% 1,685
100 Katchel Blvd Reading PA 1970 133,424 100.0% 2,759
640 Freedom Business Center (f) King Of Prussia PA 1991 132,000 100.0% 2,145
52 Swedesford Square East Whiteland Twp. PA 1988 131,017 100.0% 2,830
105 / 140 Terry Drive Newtown PA 1982 128,666 77.6% 1,522
7535 Windsor Drive Allentown PA 1988 128,114 96.8% 1,940
4667 Somerton Road (d) Trevose PA 1974 118,000 100.0% 2,277
7130 Ambassador Drive Allentown PA 1991 114,049 100.0% 513
501 Office Center Drive Fort Washington PA 1974 113,536 97.2% 1,551
7350 Tilghman Street Allentown PA 1987 111,500 100.0% 1,976
50 Swedesford Square East Whiteland Twp. PA 1986 109,800 100.0% 1,928
300 Berwyn Park Berwyn PA 1989 107,919 100.0% 2,096
920 Harvest Drive Blue Bell PA 1990 104,505 100.0% 1,672
500 Office Center Drive Fort Washington PA 1974 101,303 94.9% 1,760
7450 Tilghman Street Allentown PA 1986 100,000 94.5% 1,560
500 North Gulph Road King Of Prussia PA 1979 93,082 100.0% 1,598
630 Freedom Business Center (f) King Of Prussia PA 1989 86,683 87.5% 1,694
620 Freedom Business Center (f) King Of Prussia PA 1986 86,559 100.0% 1,827
3331 Street Road -Greenwood Square Bensalem PA 1986 83,097 97.6% 1,537
1050 Westlakes Drive Berwyn PA 1984 81,500 100.0% 1,486
2595 Metropolitan Drive (d) Trevose PA 1981 80,000 100.0% -
One Progress Avenue Horsham PA 1986 79,204 100.0% 841
323 Norristown Road Lower Gwyned PA 1988 79,083 100.0% 1,292
180 Wheeler Court Langhorne PA 1975 78,213 100.0% 230
1060 First Avenue (f) King Of Prussia PA 1987 77,718 100.0% 1,663
741 First Avenue King Of Prussia PA 1966 77,184 100.0% 540
1040 First Avenue (f) King Of Prussia PA 1985 75,488 100.0% 1,930
200 Berwyn Park Berwyn PA 1987 75,025 100.0% 1,639
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
PENNSYLVANIA SEGMENT
100-300 Gundy Drive $ 15.59 Parsons Corporation (42%) - 3/05
Penske Truck Leasing (36%) - 12/05
Philadelphia Marine Center 3.56 Dave & Busters of Pennsylvania, Inc. (81%) - 2/14
Meiji-En Restaurant (101%) - 6/03
300 Corporate Center Drive 18.87 Keystone Health Plan Center (70%) - 8/04
Highmark Incorporated (30%) - 8/04
111 Presidential Boulevard 27.54 American Business Financial (55%) - 7/03
751-761 Fifth Avenue 3.10 Lockheed Martin Corp. (100%) - 9/02
630 Allendale Road 22.25 Omnicare Clinical Research (100%) -7/10
100 Katchel Blvd 20.39 Penske Truck Leasing (64%) - 12/05
UGI Utilities, Inc. (34%) - 3/03
640 Freedom Business Center 18.74 General Electric Company (100%) - 9/01
52 Swedesford Square 20.88 Verizon (65%) - 8/04
The Vanguard Group (35%) - 7/06
105 / 140 Terry Drive 14.13 Magellan Behavioral Health (12%) - 12/04
Department of General Services (11%) - 12/05
Husky Injection Molding System (10%) - 3/05
Media Management Services, Inc. (10%) - 8/04
7535 Windsor Drive 15.23 Air Products (47%) - 11/01
Rosenbluth International (14%) - 4/04
Cadence Design Systems, Inc. (12%) - 12/03
4667 Somerton Road 6.21 BVI Industries, Inc. (34%) - 12/03
American Home Patient, Inc. (17%) - 10/02
Brownell Electro, Inc. (14%) - 5/02
Town & Country Van Lines, Inc. (14%) - 1/02
A.P. Green Refractories Co. (13%) - 12/01
7130 Ambassador Drive 5.46 Dispensing Containers Corporation (100%) - 9/04
501 Office Center Drive 19.47 Drug Information Resources (12%) - 8/01, 3/02 & 6/05
7350 Tilghman Street 17.45 The Hartford Group (100%) - 12/04 & 12/07
50 Swedesford Square 18.63 Decision One Corporation (100%) - 12/05
300 Berwyn Park 22.80 Delaware Valley Financial (69%) - 3/04
920 Harvest Drive 16.00 Aetna Life Insurance (100%) - 6/02
500 Office Center Drive 20.84 Information Resources, Inc. (32%) - 1/06
Gateway Funding, Inc. (12%) - 12/03
Access Services, Inc. (10%) - 8/03
7450 Tilghman Street 17.16 The Hartford Group (71%) - 12/07
Optronx, Inc. (12%) - 7/03
Paychex, Inc. (10%) - 9/06
500 North Gulph Road 20.04 Ajunto, Inc. (16%) - 8/02
Nason Cullen Group (14%) - 8/01
Ford Motor Credit Corp. (10%) - 10/04
630 Freedom Business Center 24.03 AT & T / TCG Delaware (24%) - 12/09
HQ King of Prussia, Inc. (17%) - 7/04
Robert Half International, Inc. (12%) - 10/06
620 Freedom Business Center 26.30 Reliance Insurance Company (80%) - 10/02
Home Health Corporation (18%) - 9/05
3331 Street Road -Greenwood Square 19.20 Stelex, Inc. (14%) - 5/04
Capsule Communications (13%) - 8/01
Arlington Capital Mortgage Corp. (10%) - 6/04
1050 Westlakes Drive 26.40 Dermik Laboratories (80%) - 8/10
Mediconsult.Com, Inc. (20%) - 4/03
2595 Metropolitan Drive 7.40 Northtec LLC (100 %) - 10/06
One Progress Avenue 9.89 Reed Technology (100%) - 6/11
323 Norristown Road 17.24 Bisys Plan Services (70%) - 7/02
180 Wheeler Court 5.96 Lainiere De Picardie, Inc. (59%) - 12/01
Eckerd Corporation (41%) - 8/05
1060 First Avenue 22.22 Finova Capital (30%) - 1/04
Integra, Inc. (33%) - 4/01
Aventis Behring (27%) - 10/02
Artemis Management (11%) - 5/01
741 First Avenue 8.27 Tozour - Trane, Incorporated (100%) - 4/05
1040 First Avenue 24.68 Cortech Consulting (46%) - 6/04
First USA, Inc. (26%) - 6/05
Aventis Behring (15%) - 1/03
200 Berwyn Park 26.08 Devon Direct Marketing & Advertising (53%) - 4/02
VHA East Corporation (12%) - 11/04
Bucks Consultants (12%) - 8/01
-15-
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
1020 First Avenue (f) King Of Prussia PA 1984 74,556 100.0% 1,300
1000 First Avenue (f) King Of Prussia PA 1980 74,139 100.0% 1,789
160 - 180 West Germantown Pike East Norriton PA 1982 73,242 89.8% 1,160
2560 Metropolitan Drive Trevose PA 1983 70,000 99.9% -
14 Campus Boulevard Newtown Square PA 1998 69,400 100.0% 1,193
1105 Berkshire Boulevard Reading PA 1987 68,985 100.0% 936
500 Enterprise Road Horsham PA 1990 66,751 80.8% 697
16 Campus Boulevard Newtown Square PA 1990 65,463 100.0% 705
925 Harvest Drive Blue Bell PA 1990 63,663 100.0% 1,278
610 Freedom Business Center (f) King Of Prussia PA 1985 62,991 87.4% 1,179
1974 Sproul Road Broomall PA 1995 62,669 100.0% 876
2200 Cabot Boulevard Langhorne PA 1979 61,543 100.0% 316
426 Lancaster Avenue Devon PA 1990 61,102 100.0% 1,126
3329 Street Road -Greenwood Square Bensalem PA 1985 60,642 85.5% 975
200 Corporate Center Drive Camp Hill PA 1989 60,000 100.0% 1,113
321 Norristown Road Lower Gwyned PA 1988 59,994 100.0% 987
2575 Metropolitan Drive Trevose PA 1981 60,000 100.0% -
100 Berwyn Park Berwyn PA 1986 57,731 100.0% 1,209
640 Allendale Road King of Prussia PA 2000 56,034 100.0% 103
2010 Cabot Boulevard Langhorne PA 1985 52,831 100.0% 405
680 Allendale Road King Of Prussia PA 1962 52,528 100.0% 544
2240/50 Butler Pike Plymouth Meeting PA 1984 52,229 100.0% 792
650 Park Avenue King Of Prussia PA 1968 51,711 97.0% 692
1155 Business Center Drive Horsham PA 1990 51,388 98.0% 723
486 Thomas Jones Way Exton PA 1990 51,072 92.9% 666
855 Springdale Drive Exton PA 1986 50,750 100.0% 773
660 Allendale Road King of Prussia PA 1962 50,635 100.0% 386
800 Business Center Drive Horsham PA 1986 50,609 100.0% 676
875 First Avenue King Of Prussia PA 1966 50,000 100.0% 263
630 Clark Avenue King Of Prussia PA 1960 50,000 100.0% 311
620 Allendale Road King Of Prussia PA 1961 50,000 80.0% 417
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
1020 First Avenue 18.58 Aventis Behring (100%) - 10/02
1000 First Avenue 24.98 First USA, Inc. (27%) - 4/05
Elf Atochem (22%) - 3/06
Aventis Behring (21%) - 1/03
Finova Capital (16%) - 1/04
160 - 180 West Germantown Pike 18.29 Icon Clinical Research (40%) - 8/02
Philanthropic Mutual Life Insurance (10%) - 12/01
2560 Metropolitan Drive 7.86 Marconi Medical Systems (48%) - 9/02
Delta Lighting Products, Inc. (19%) - 5/01
Nextel Communications (18%) - 5/03
Rentacom, Inc (15%) - 10/04
14 Campus Boulevard 21.97 Catholic Health East (37%) - 9/08
Naviant Technology Solutions, Inc. (35%) - 9/08
Brandywine Realty Trust (29%) - 12/03
1105 Berkshire Boulevard 14.88 The Travelers Indemnity Company (74%) - 2/02
Spicer Systems (14%) - 11/01
500 Enterprise Road 15.55 Conti Mortgage (81%) - 4/01
16 Campus Boulevard 16.22 New England Life Insurance (61%) - 5/06
Atlantic Credit Union (35%) - 1/06
925 Harvest Drive 17.76 Elliott, Reihner, Siedzikowski & Egan (35%) - 6/08
Flamm, Boroff & Bacine, P.C. (21%) - 7/05
610 Freedom Business Center 23.57 Sun Microsystems, Inc. (38%) - 8/07
UNUM Life Insurance Company (24%) - 7/02
Newbridge Networks, Incorporated (11%) - 12/01
Home Properties of New York (10%) - 8/05
1974 Sproul Road 18.61 Franklin Mint Credit Union (30%) - 5/02
Chelsea Home Publishers (21%) - 3/03
Allan Coullautt Associates (17%) - 3/03
TMR, Incorporated (11%) - 10/02
Longview of America, Inc. (11%) - 6/05
2200 Cabot Boulevard 6.82 McCaffrey Management (56%) - 8/05
Akzo Nobel Inks Corporation (44%) - 8/05
426 Lancaster Avenue 18.43 GE Transport International Pool (100%) - 9/03
3329 Street Road -Greenwood Square 17.86 FPA Corporation (30%) - 12/01
Orbital Engineering (12%) - 2/01
Model Consulting, Inc. (11%) - 7/03
Prudential Insurance Company (11%) - 6/02
200 Corporate Center Drive 19.10 Highmark, Incorporated (100%) - 5/01
321 Norristown Road 19.21 Navisys (29%) - 12/02
Bisys Plan Services (28%) - 7/02
Rohm and Haas Company (17%) - 11/3 & 4/05
2575 Metropolitan Drive 5.70 Northtec LLC (100%) - 10/06
100 Berwyn Park 27.19 Siemans Medical Solutions (49%) - 3/02 & 3/04
PFPC,Inc. (30%) - 10/02
LCOR, Inc. (13%) - 3/04
640 Allendale Road 7.27 Sharp Corporation (100%) - 10/03
2010 Cabot Boulevard 10.57 Computer Hardware Maintenance (56%) - 1/03
DiMark, Inc. (33%) - 9/02
Four Seasons Mechanical, Inc. (11%) - 9/05
680 Allendale Road 10.96 Immunization Products, Ltd. (100%) - 10/11
2240/50 Butler Pike 19.39 First Union National Bank (58%) - 4/06
Johnson Controls, Inc. (33%) - 4/06
650 Park Avenue 21.39 GE Transport International Pool (64%) - 9/03
Sunguard Recovery Services, Inc. (20%) - 10/05
1155 Business Center Drive 18.84 IMS (84%) - 3/06
Quest Diagnostics, Inc. (14%) - 8/01
486 Thomas Jones Way 19.10 First American Real Estate Tax Service (24%) - 1/04
Toshiba American Medical Systems (13%) - 6/02
Cape Environmental (12%) - 7/02
ICI America's, Inc. (12%) - 11/05
J. Reckner Associates, Inc. (10%) - 9/03
855 Springdale Drive 15.50 Environmental Resources (100%) - 7/01
660 Allendale Road 7.28 The Immune Response Corporation (100%) - 10/11
800 Business Center Drive 15.56 Quest Diagnostics Inc. (72%) - 1/12
KWS & P (27%) - 4/02
875 First Avenue 17.22 Comdisco, Inc. (100%) - 8/10
630 Clark Avenue 5.92 Metro Fiber Systems of Philadelphia (100%) - 9/12
620 Allendale Road 14.38 Executone Information Systems, Inc. ( 50 %) - 9/01
U.S.Interactive, Inc. (30%) - 9/01
-16-
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
7150 Windsor Drive Allentown PA 1988 49,420 100.0% 441
520 Virginia Drive Fort Washington PA 1987 48,122 100.0% 734
11 Campus Boulevard Newtown Square PA 1998 47,700 100.0% 1,073
456 Creamery Way Exton PA 1987 47,604 100.0% 354
6575 Snowdrift Road Allentown PA 1988 46,858 98.6% 345
220 Commerce Drive Fort Washington PA 1985 46,094 89.1% 756
7248 Tilghman Street Allentown PA 1987 43,782 96.0% 459
110 Summit Drive Exton PA 1985 43,660 100.0% 273
2535 Metropolitan Drive (d) Trevose PA 1974 42,000 100.0% -
300 Welsh Road - Building I Horsham PA 1980 40,042 100.0% 635
7310 Tilghman Street Allentown PA 1985 40,000 93.0% 459
2510 Metropolitan Drive (d) Trevose PA 1981 40,000 100.0% -
2000 Cabot Boulevard Langhorne PA 1985 39,969 100.0% 389
150 Corporate Center Drive Camp Hill PA 1987 39,401 73.6% 531
1336 Enterprise Drive West Goshen PA 1989 39,330 100.0% 481
600 Park Avenue King Of Prussia PA 1964 39,000 100.0% 470
755 Business Center Drive Horsham PA 1998 38,050 100.0% 576
18 Campus Boulevard Newtown Square PA 1990 37,374 100.0% 626
2512 Metropolitan Drive (d) Trevose PA 1981 37,000 100.0% -
3000 Cabot Boulevard Langhorne PA 1986 34,693 100.0% 568
7010 Snowdrift Way Allentown PA 1991 33,029 100.0% 401
2260 Butler Pike Plymouth Meeting PA 1984 31,892 100.0% 462
700 Business Center Drive Horsham PA 1986 30,773 100.0% 485
120 West Germantown Pike Plymouth Meeting PA 1984 30,546 100.0% 539
650 Dresher Road Horsham PA 1984 30,138 100.0% 370
655 Business Center Drive Horsham PA 1997 29,849 100.0% 464
2260/70 Cabot Boulevard Langhorne PA 1984 29,638 83.8% 307
468 Thomas Jones Way Exton PA 1990 28,934 18.5% 405
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
7150 Windsor Drive 13.31 Verizon (35%) - 10/04
ICT Group (20%) - 2/01
Choice One Commumications (12%) - 11/04
Linden Optical (11%) - 3/01
520 Virginia Drive 16.75 TVG, Inc. (100%) - 8/05
11 Campus Boulevard 21.82 Department of Forestry (70%) - 10/09
Jobson Publishing (18%) - 10/06
Dilworth Paxson (12%) - 12/06
456 Creamery Way 8.42 Neutronics (100%) - 1/03
6575 Snowdrift Road 13.24 Liberty Mutual Insurance (50%) - 3/05
Covance Pharmaceutical (25%) - 11/04
Cenix, Inc. (24%) - 6/01
220 Commerce Drive 18.48 Temple University (25%) - 4/01
Ram Technologies (13%) - 3/04
Brandywine Realty Services (11%) - 6/02
7248 Tilghman Street 15.53 Ohio Casualty (31%) - 7/01
American Express, IDS (28%) - 7/01
Saqqara Systems (15%) - 11/05
110 Summit Drive 9.18 Laser Technologies and Service (49%) - 10/06
Pall Trincor (30%) - 3/02
DGH Technology (12%) - 9/04
2535 Metropolitan Drive 6.87 Larson - Juhl (100%) - 10/03
300 Welsh Road - Building I 19.23 Music Choice (45%) - 9/03
American Meter Company - (43%) - 7/04
7310 Tilghman Street 14.83 H. Wilden & Associates (21%) - 5/09
Rosemont College (16%) - 12/05
Avaya, Inc. (15%) - 7/03
PECO Communications (14%) - 12/03
The Donnelley Directory (10%) - 6/02
SKF USA, Inc. (10%) - 6/03
2510 Metropolitan Drive 6.47 Philadelphia Choice Television (100%) - 6/01
2000 Cabot Boulevard 12.20 Ecogen, Inc. (37%) - 3/05
Rom - Tec, Inc. (28%) - 9/02
CSX Transportation (23%) - 5/04
AGIE, Ltd. (13%) - 1/01
150 Corporate Center Drive 18.56 Highmark, Incorporated (37%) - 12/03
The Prudential Insurance Company (15%) - 3/01
1336 Enterprise Drive 18.84 VWR Scientific Products (66%) - 12/02
Craftopia.com, Inc. (34%) - 11/02
600 Park Avenue 14.01 Quest Diagnostics, Inc. (100%) - 5/02
755 Business Center Drive 20.19 Scirex Corporation (100%) - 12/08
18 Campus Boulevard 20.99 Emax Solution Partners (59%) - 6/03
Marshall Dennehey (21%) - 9/06
LR, Inc. (20%) - 8/03
2512 Metropolitan Drive 7.23 Bucks County Midweek, Inc. (40%) - 6/03
American Bank Note Company (30%) - 12/04
Philadelphia Newspapers, Inc. (17%) - 10/03
Stolarik Donohue Associates, Inc. (14%) - 3/01
3000 Cabot Boulevard 18.63 Geraghty & Miller (27%) - 4/03
Integrated Data Solutions (15%) - 9/04
Luigi Bormioli Corporation (15%) - 7/04
7010 Snowdrift Way 15.61 Neighbor Care (61%) - 11/02
Anderson BDG Corporation (39%) - 6/03
2260 Butler Pike 20.25 Wilmington National Finance (36%) - 2/05
Ostroff, Fair & Company P.C. (34%) - 7/04
Thoroughbred Direct International (28%) - 5/01
700 Business Center Drive 18.97 Macro (50%) - 4/01
Arrow Electronics (34%) - 8/01
KWS & P (16%) - 4/02
120 West Germantown Pike 18.76 Clair Odell Insurance Agency (82%) - 7/01
Kleinert's, Inc. (13%) - 10/01
650 Dresher Road 16.51 GMAC (100%) - 5/03
655 Business Center Drive 20.74 Diccicco Battista Communications (54%) - 9/07
Paccar Financial Corporation (22%) - 9/02
Legg Mason Wood Walker (14%) - 5/04
2260/70 Cabot Boulevard 14.63 Sager Electrical Supply Co. (14%) - 10/02
Manufacturers Survey (13%) - 12/01
Terminix International (13%) - 11/02
Pronet Incorporated (10%) - 3/02
468 Thomas Jones Way 21.00 Main Line Affiliates (18%) - 8/05
-17-
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
630 Dresher Road (e) Horsham PA 1987 28,894 0.0% 100
2407 Park Drive Harrisburg PA 1985 28,285 47.0% 383
1700 Paoli Pike Malvern PA 2000 28,000 55.6% 127
1150 Berkshire Boulevard Reading PA 1979 26,781 100.0% 418
2405 Park Drive Harrisburg PA 1985 25,495 92.3% 358
140 West Germantown Pike Plymouth Meeting PA 1984 25,357 100.0% 504
3333 Street Road -Greenwood Square Bensalem PA 1988 25,000 100.0% 362
800 Corporate Circle Drive Harrisburg PA 1979 24,779 67.7% 263
155 Rittenhouse Circle Bristol PA 1985 22,500 100.0% 259
2005 Cabot Boulevard Langhorne PA 1985 22,000 100.0% 215
2490 Boulevard of the Generals King Of Prussia PA 1975 20,600 100.0% 299
500 Nationwide Drive Harrisburg PA 1977 18,029 50.7% 45
600 Corporate Circle Drive Harrisburg PA 1978 17,858 100.0% 267
300 Welsh Road - Building II Horsham PA 1980 17,750 100.0% 346
748 Springdale Drive Exton PA 1986 13,844 78.3% 185
2404 Park Drive Harrisburg PA 1983 11,000 100.0% 147
2401 Park Drive Harrisburg PA 1984 10,074 100.0% 135
200 Nationwide Drive Harrisburg PA 1978 2,500 100.0% 60
George Kachel Farmhouse Reading PA 2000 1,664 100.0% -
301 North Walnut Street Wilmington DE 1989 321,511 100.0% 5,730
201 North Walnut Street Wilmington DE 1988 311,286 100.0% 5,431
4550 New Linden Hill Road Wilmington DE 1974 105,067 96.6% 1,351
One Righter Parkway (f) Talleyville DE 1989 104,828 100.0% 2,294
100 Commerce Drive Newark DE 1989 63,378 81.1% 855
258 Chapman Road Newark DE 1983 40,667 80.7% 478
256 Chapman Road Newark DE 1983 33,747 100.0% 487
262 Chapman Road Newark DE 1983 30,620 80.6% 416
260 Chapman Road Newark DE 1983 29,343 83.3% 327
263 Chapman Road Newark DE 1983 24,773 91.8% 332
261 Chapman Road Newark DE 1983 23,700 100.0% 318
NEW JERSEY / NEW YORK SEGMENT
50 East State Street Trenton NJ 1989 305,884 90.6% 5,017
Park 80 West Plaza II Saddlebrook NJ 1988 264,074 96.8% 5,762
Park 80 West Plaza I Saddlebrook NJ 1970 223,327 97.5% 4,771
1009 Lenox Drive Lawrenceville NJ 1989 180,460 93.8% 4,040
10000 Midlantic Drive Mt. Laurel NJ 1990 178,605 100.0% 2,755
33 West State Street Trenton NJ 1988 167,774 100.0% 2,969
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
630 Dresher Road -
2407 Park Drive 16.00 AEGIS Security Insurance Company (47%) - 10/02
1700 Paoli Pike 22.50 Akcelerant Space Partnership (45%) - 6/03
1150 Berkshire Boulevard 16.67 Berks Cardiology (24%) - 12/01
Ervin Levin, D.D.S. (12%) - 3/08
CMA Evaluations Consultants (10%) - 9/07
Jessee L. Pleet, Esq. (10%) - 6/05
2405 Park Drive 16.56 FDIC (24%) - 4/05
DMG-Maximus (13%) - 1/05
R.H. Holsberg & Company (11%) - 8/02
United of Omaha Life Insurance Co. (10%) - 10/02
140 West Germantown Pike 22.11 Healthcare, Inc. (47%) - 9/04
Career Concepts (29%) - 2/04
PA Liquor Control Board (18%) - 6/09
3333 Street Road -Greenwood Square 18.20 Nextell Communications (100%) - 7/02
800 Corporate Circle Drive 14.04 Sacunas & Saline, Inc. (22%) - 7/05
Leukemia Society of America (13%) - 9/01
The Harrisburg Symphony (11%) - 6/03
155 Rittenhouse Circle 11.50 Osiris Investment, LP (100%) - 2/02
2005 Cabot Boulevard 16.67 Ensr Corporation (54%) - 6/05
Ecom Xml, Inc. (46%) - 10/05
2490 Boulevard of the Generals 15.17 Commonwealth of Pennsylvania (100%) - 6/01
500 Nationwide Drive 17.00 Paychex, Inc. (51%) - 9/07
600 Corporate Circle Drive 14.94 Clear Channel, Incorporated (100%) - 7/02
300 Welsh Road - Building II 21.05 AG Edwards & Sons (45%) - 12/03
Abington Memorial Hospital (37%) - 10/01
SRS Marketing Company (18%) - 9/05
748 Springdale Drive 17.64 Great American Insurance (46%) - 1/05
Chester County District Court - (32%) - 1/04
2404 Park Drive 14.66 Tracking Systems Corporation (65%) - 3/04
Albright College (35%) - 7/03
2401 Park Drive 15.70 Med Media, Inc. (46%) - 8/03
Moore Business Forms, Inc. (44%) - 6/02
Judy Carhart, MD (10%) - 10/01
200 Nationwide Drive 24.00 Fulton Bank (100 %) - 8/03
George Kachel Farmhouse 20.03 Salient 3 Communications (100%) - 12/03
301 North Walnut Street 18.44 First USA Bank (93%) - 12/15
201 North Walnut Street 19.56 First USA Bank (91%) - 1/17
4550 New Linden Hill Road 16.09 American International Insurance (53%) - 6/05
The Whitaker Corporation (23%) - 8/02
One Righter Parkway 20.91 Kimberly Clark (89 %) - 12/05
Zeneca, Inc. (11%) -12/05
100 Commerce Drive 14.36 The Travelers Bank (76%) - 12/01
258 Chapman Road 15.38 Conectiv Solutions (30%) - 4/01
Mia Shoes, Inc. (23%) - 6/04
Phillips & Cohen Associates (14%) - 7/05
256 Chapman Road 15.66 Chesapeake Decision (27%) - 2/01,8/04 & 11/05
Delaware Department of Admin. Services (20%) - 10/04
Key Enterprises (16%) - 3/05
262 Chapman Road 16.66 On-Board Chemical (41%) - 3/001
260 Chapman Road 14.41 Conectiv Communications (10%) - 7/01 & 7/04
Health Insurance Associates (10%) - 7/05 & 7/06
263 Chapman Road 14.84 Delaware Department of Admin. Services (92%) - 7/01 & 9/06
261 Chapman Road 14.04 Delaware Department of Admin. Services (100%) - 10/01 & 5/02
NEW JERSEY / NEW YORK SEGMENT
50 East State Street 24.60 State of N.J. Dept. of Human Services (73%) - 9/09
Park 80 West Plaza II 25.36 Vornado Realty Trust (10%) - 4/02
Lexington Management Corp. (10%) - 8/03
Park 80 West Plaza I 24.42 New York Life Insurance Co. (12%) - 10/04
1009 Lenox Drive 25.98 Uniform Code Council, Inc. (21%) - 11/08
N.J. State Medical Underwriters (16%) - 5/01
10000 Midlantic Drive 21.50 QAD, Inc. (37%) - 8/01
Automotive Rentals (13%) - 8/02
33 West State Street 23.73 The State of New Jersey (96%) - 7/05 & 8/08
-18-
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
Main Street - Plaza 1000 Voorhees NJ 1988 162,364 100.0% 2,847
55 U.S. Avenue Gibbsboro NJ 1982 138,982 100.0% 657
457 Haddonfield Road Cherry Hill NJ 1990 121,737 91.5% 1,896
2000 Midlantic Drive Mt. Laurel NJ 1989 121,658 100.0% 1,670
2000 Lenox Drive Lawrenceville NJ 2000 119,114 100.0% 1,839
700 East Gate Drive Mt. Laurel NJ 1984 118,899 77.7% 1,994
993 Lenox Drive Lawrenceville NJ 1985 111,137 100.0% 2,294
1000 Howard Boulevard Mt. Laurel NJ 1988 105,312 100.0% 2,150
One South Union Place Cherry Hill NJ 1982 99,573 100.0% 1,237
997 Lenox Drive Lawrenceville NJ 1987 97,277 100.0% 1,869
1000 Atrium Way Mt. Laurel NJ 1989 97,158 91.6% 1,626
1120 Executive Boulevard Marlton NJ 1987 95,122 99.4% 1,793
15000 Midlantic Drive Mt. Laurel NJ 1991 84,056 100.0% 1,164
1007 Laurel Oak Road Voorhees NJ 1996 78,205 100.0% 621
Three Greentree Centre Marlton NJ 1984 69,300 100.0% 1,187
King & Harvard Cherry Hill NJ 1974 67,397 85.8% 943
9000 Midlantic Drive Mt. Laurel NJ 1989 67,299 100.0% 768
6 East Clementon Road Gibbsboro NJ 1980 66,236 87.8% 1,025
104 Windsor Center Drive East Windsor NJ 1987 65,980 100.0% 1,118
701 East Gate Drive Mt. Laurel NJ 1986 60,711 97.4% 1,152
4000/5000 West Lincoln Drive Marlton NJ 1982 59,891 98.0% 798
308 Harper Drive Mt. Laurel NJ 1976 59,500 100.0% 1,197
835 New Durham Road Edison NJ 1974 58,095 100.0% 323
305 Fellowship Drive Mt. Laurel NJ 1980 56,824 100.0% 972
Two Greentree Centre Marlton NJ 1983 56,075 100.0% 1,005
309 Fellowship Drive Mt. Laurel NJ 1982 55,911 67.3% 1,038
One Greentree Centre Marlton NJ 1982 55,838 94.2% 941
8000 Lincoln Drive Marlton NJ 1997 54,923 100.0% 964
307 Fellowship Drive Mt. Laurel NJ 1981 54,485 87.0% 1,026
303 Fellowship Drive Mt. Laurel NJ 1979 53,848 88.9% 915
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
Main Street - Plaza 1000 21.21 Morgan Stanley Dean Witter (14%) - 9/04
Credit Lenders (13%) - 12/01
Ballard, Spahr, Andrews & Ingersoll (11%) - 8/10
55 U.S. Avenue 6.63 Micro Warehouse, Inc. (100%) - 8/02
457 Haddonfield Road 21.99 Montgomery McCracken (12%) - 2/05
Cozen & O'Conner (12%) - 5/05
Pepper Hamilton (12%) - 9/06
Dilworth, Paxson (10%) - 5/04
2000 Midlantic Drive 19.32 Lockheed Martin Corporation (59%) - 5/02, 6/02, 10/04, 7/05
Computer Associates International (26%) - 12/02
Telesciences, Inc. (13%) - 4/08
2000 Lenox Drive 26.58 International Thomson Publishing (55%) - 9/10
Nelson Communications, Inc. (17%) - 7/10
Ken Clark International, Inc. (14%) - 9/10
700 East Gate Drive 19.74 Citicorp Vendor Finance (50%) - 3/05
HBO & Company (13%) - 1/05
993 Lenox Drive 22.39 Stark & Stark, Inc. (57%) - 8/04
Office Concierge, Inc. (18%) - 4/04
Navigant Consulting (12%) - 6/03
1000 Howard Boulevard 20.80 Conrail (45%) - 6/05
State of New Jersey (26%) - 12/02
Lincoln Technical Institute (25%) - 11/09
One South Union Place 15.22 Vlasic Foods International, Inc. (100%) - 10/08
997 Lenox Drive 21.65 Fox,Rothschild,O'Brien & Frankel (34%) - 6/03
Dechert Price & Rhoads (25%) - 11/03
Smith Barney, Inc. (13%) - 9/05
1000 Atrium Way 19.53 Navistar Financial (18%) - 12/04
IBM (18%) - 3/01
Summit Insurance Advisors (17%) - 2/04
Janney, Montgomery, Scott (14%) - 6/05
1120 Executive Boulevard 23.29 Computer Sciences Corporation (63%) - 5/02
Fleer Skybox International (19%) - 4/03
15000 Midlantic Drive 18.07 New Jersey Bell Telephone (89%) - 7/06
Gallagher Bassett Services, Inc. (11%) - 11/02
1007 Laurel Oak Road 7.94 R.F. Power Products, Inc. (100%) - 10/06
Three Greentree Centre 19.18 Parker McCay (49%) - 7/10
Surety Title Company (19%) - 12/03
National City Mortgage Company (12%) - 7/03
H&R Block Financial Advisors (12%) - 3/05
King & Harvard 20.45 U.S. Government - Social Security (33%) - 5/10
UFCW Local 56, AFL-CIO (25%) - 3/10
N.J. Department of Law and Public Safety (23%) - 10/09
9000 Midlantic Drive 21.14 Automotive Rentals (100%) - 8/02
6 East Clementon Road 16.65 West Jersey Health Systems (30%) - 3/01
Malvern Marketing (17%) - 12/04
Equifax Credit Information Services (15%) - 12/02
104 Windsor Center Drive 18.63 I-STAT Corporation (57%) - 9/03
Evans East (22%) - 12/05
Green Tree Learning Centers, Inc. (21%) - 9/02
701 East Gate Drive 19.91 Lockheed Martin Corporation (57%) - 4/02
Compaq Computer (16%) - 6/05
American International Recovery, Inc. (11%) - 1/03
4000/5000 West Lincoln Drive 14.92 Bae Systems (18%) - 5/01
308 Harper Drive 20.62 Harleysville Insurance Company (70%) - 4/03
Cisco Systems (31%) - 7/03
835 New Durham Road 5.35 Western Union International, Inc. (100%) - 2/05
305 Fellowship Drive 19.92 Industri-Matematik American Operations, Inc. (68%) - 1/05
Dun & Bradstreet, Inc. (15%) - 9/05
Two Greentree Centre 20.03 Merrill, Lynch, Pierce, Fenner (32%) - 11/05 & 11/08
IBS Interactive (16%) - 12/03
South Jersey Radiology (10%) - 5/01
309 Fellowship Drive 20.79 Morgan Stanley Dean Witter (21%) - 12/09
HQ Mount Laurel, Inc. (20%) - 4/08
Merchants Mutual Insurance (13%) - 6/01
One Greentree Centre 18.72 American Executive Services (30%) - 1/06
Temple University (18%) - 12/02
8000 Lincoln Drive 19.70 Computer Sciences Corporation (67%) - 11/01
Blue Cross (33%) - 5/07
307 Fellowship Drive 20.19 PRC, Incorporated (10%) - 1/01
303 Fellowship Drive 19.43 Larami / Hasbro (22%) - 12/01
Equiva Services (17%) - 12/01
Metro Commercial (15%) - 2/05
The Prudential Insurance Company (14%) - 5/04
-19-
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
2 Foster Avenue Gibbsboro NJ 1974 50,761 100.0% 230
44 National Road Edison NJ 1967 50,000 0.0% 107
1000/2000 West Lincoln Drive Marlton NJ 1982 49,191 95.0% 698
837 New Durham Road Edison NJ 1977 48,200 100.0% 168
4000 Midlantic Drive Mt. Laurel NJ 1998 46,945 100.0% 765
Five Eves Drive Marlton NJ 1986 45,564 95.2% 650
9000 West Lincoln Drive Marlton NJ 1983 43,719 83.8% 543
Main Street - Piazza Voorhees NJ 1990 41,408 100.0% 537
1000 East Lincoln Drive Marlton NJ 1981 40,600 100.0% 162
20 East Clementon Road Gibbsboro NJ 1986 38,260 99.7% 639
Two Eves Drive Marlton NJ 1987 37,532 95.6% 563
1255 Broad Street Bloomfield NJ 1981 37,478 100.0% 589
3000 West Lincoln Drive Marlton NJ 1982 36,070 100.0% 474
304 Harper Drive Mt. Laurel NJ 1975 32,978 100.0% 528
Main Street - Promenade Voorhees NJ 1988 31,445 87.7% 342
168 Franklin Corner Drive Lawrenceville NJ 1976 30,426 80.9% 294
Four B Eves Drive Marlton NJ 1987 27,011 100.0% 340
815 East Gate Drive Mt. Laurel NJ 1986 25,500 100.0% 293
817 East Gate Drive Mt. Laurel NJ 1986 25,351 100.0% 308
Four A Eves Drive Marlton NJ 1987 24,687 100.0% 316
1 Foster Avenue (e) Gibbsboro NJ 1972 24,255 0.0% -
4 Foster Avenue Gibbsboro NJ 1974 23,372 100.0% 171
7 Foster Avenue Gibbsboro NJ 1983 21,843 40.2% 129
10 Foster Avenue Gibbsboro NJ 1983 18,651 100.0% 285
305 Harper Drive Mt. Laurel NJ 1979 14,980 100.0% 109
5 U.S. Avenue Gibbsboro NJ 1987 5,000 100.0% 18
50 East Clementon Road Gibbsboro NJ 1986 3,080 100.0% 121
5 Foster Avenue Gibbsboro NJ 1968 2,000 100.0% -
55 Ames Court Plainview NY 1961 90,000 100.0% 1,191
245 Old Country Road Melville NY 1978 82,308 100.0% 573
125 Jericho Turnpike Jericho NY 1969 75,308 84.3% 1,270
91 North Industry Court Deer Park NY 1965 71,000 100.0% 300
263 Old Country Road Mellevile NY 1999 62,500 100.0% 803
1000 Axinn Avenue Garden City NY 1965 59,000 100.0% 287
336 South Service Road Melville NY 1965 43,600 100.0% 376
645 Stewart Avenue Garden City NY 1962 35,552 100.0% 228
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
2 Foster Avenue 5.06 Harbor Laundry, Inc. (95%) - 8/03
44 National Road -
1000/2000 West Lincoln Drive 15.04 Occupational Training Center (12%) - 7/02
837 New Durham Road 4.27 TLC Warehouse Corporation (50%) -11/01
Lex Associates, Inc. (50%) - 12/02
4000 Midlantic Drive 18.75 Lockheed Martin Corporation (100%) - 4/05
Five Eves Drive 16.17 Virtua Health (36%) - 11/06
Samaritan Hospice (25%) - 2/04
Residential Healthcare, Inc. (18%) - 3/06
9000 West Lincoln Drive 15.95 No Tenants Leasing 10% or More Square Feet
Main Street - Piazza 14.28 Cooper Hospital (40%) - 2/01 & 7/01
Lincoln Investments (20%) - 8/03
Chamber of Commerce (12%) - 8/06
1000 East Lincoln Drive 3.62 Burrups Packard (100%) - 2/06
20 East Clementon Road 18.50 Medaquist Receivables Mgmt Co. (20%) - 4/03
R.Randle Scarborough, Inc. (16%) - 10/02
Serco, Inc. (16%) - 12/05
Feinberg and Associates (16%) - 1/05
The State of New Jersey (14%) - 9/07
Two Eves Drive 18.42 Resolution Management Consultants (14%) - 6/05
1255 Broad Street 20.18 Charles M. Cummins & Elliot Shack (75%) - 2/06
Menno Travel Services (14%) - 10/03
3000 West Lincoln Drive 15.36 Abo, Uris & Allenburger (20%) - 1/02
304 Harper Drive 18.39 Legg Mason Wood Walker (18%) - 6/02
Basic Commerce Industries, Inc. (14%) - 8/05
Panzano & Partners (14%) - 12/04
Tab Products (10%) - 6/02
Redwood Capital, Inc. (10%) - 8/01 & 11/02
Main Street - Promenade 15.35 Morgenstern & Associates (14%) - 5/04
IT Resources (10%) - 4/05
168 Franklin Corner Drive 17.51 Metropolitan Life Insurance (18%) - 10/04
Benecard Services, Inc. (17%) - 12/05
Voxware, Inc. (13%) - 6/03
Four B Eves Drive 16.29 ISO Commercial Risk (67%) - 6/05
Global Industries, Inc. (17%) - 12/00
Broadwing/Eclipse Communications (16%) - 1/05
815 East Gate Drive 13.27 Advanced Communication Systems (67%) - 4/04
Wyle Laboratories (33%) - 11/01
817 East Gate Drive 13.91 Landress Co. - Emtec (62%) - 3/01
Concentra (38%) - 9/04
Four A Eves Drive 15.90 Groundwater Technology (39%) - 5/04
Advanced Systems (33%) - 4/04
Anthony Scialabba, Esq. (18%) - 3/03
Inphoto Surveillance (10%) - 6/03
1 Foster Avenue -
4 Foster Avenue 8.96 Harbor Laundry, Inc. (62%) - 8/03
Medical Data Exchange, Inc. (38%) - 10/02
7 Foster Avenue 14.97 Choice Point Services (35%) - 4/01
10 Foster Avenue 15.73 Dolphin, Inc. (40%) - 5/03
Rottland Homes of New Jersey (29%) - 5/04
305 Harper Drive 8.23 The Jerome Group (100%) - 9/02
5 U.S. Avenue 0.36 Mcfadden Catering, Inc. (100%) - 12/03
50 East Clementon Road 39.17 Corestates Financial Corporation (100%) - 10/02
5 Foster Avenue - Borough of Gibbsboro - Police Station (50%) - 11/02
55 Ames Court 14.21 Cardholder Management Services (100%) - 1/03
245 Old Country Road 7.05 Citicorp Custom Credit, Inc. (100%) - 1/06
125 Jericho Turnpike 20.88 Getty Petroleum Corporation (42%) - 1/02
91 North Industry Court 5.56 Windowrama Warehousing, Inc. (100%) - 6/01
263 Old Country Road 11.67 Ademco Distributing, Inc. (100%) - 2/09
1000 Axinn Avenue 4.86 Fortunoff Fine Jewelry & Silverware, Inc. (100%) - 1/02
336 South Service Road 9.17 Nikon, Inc. (100%) - 4/01
645 Stewart Avenue 9.99 Hearst Business Communications (100%) - 12/03
-20-
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
80 Skyline Drive Plainview NY 1961 29,521 100.0% 182
131 Jericho Turnpike Jericho NY 1967 27,783 91.7% 551
120 Express Street Plainview NY 1962 27,729 100.0% 245
110 Voice Road Carle Place NY 1963 25,920 100.0% 145
100 Voice Road Carle Place NY 1963 25,000 100.0% 211
10 Skyline Drive Plainview NY 1960 22,562 100.0% 163
180 Central Ave. / 2 Engineers Ln. Farmingdale NY 1960 21,700 100.0% 134
111 Ames Court Plainview NY 1959 18,000 100.0% 136
11 Commercial Street Plainview NY 1961 17,548 100.0% 138
8 Engineers Lane Farmingdale NY 1963 15,000 100.0% 80
19 Engineers Lane Farmingdale NY 1962 10,000 100.0% 70
VIRGINIA SEGMENT
600 East Main Street Richmond VA 1986 422,789 68.5% 7,167
300 Arboretum Place Richmond VA 1988 209,576 96.3% 3,390
1900 Gallows Road (g) Vienna VA 1982 205,627 100.0% 4,295
1880 Campus Commons Drive (g) Reston VA 1985 172,448 100.0% 2,285
12015 Lee Jackson Memo(g)l Highway Fairfax VA 1985 150,046 100.0% 3,562
2511 Brittons Hill Road Richmond VA 1987 132,103 100.0% 574
11781 Lee Jackson Memo(g)l Highway Fairfax VA 1985 127,568 96.8% 2,638
2100-2116 West Laburnam Avenue Richmond VA 1976 127,239 91.4% 1,819
1957 Westmoreland Street Richmond VA 1975 121,815 100.0% 529
2201-2245 Tomlynn Street Richmond VA 1989 85,860 96.9% 661
9011 Arboretum Parkway Richmond VA 1991 72,817 96.3% 1,210
4805 Lake Brooke Drive Glen Allen VA 1996 61,632 100.0% 1,159
9100 Arboretum Parkway Richmond VA 1988 57,481 94.2% 948
2812 Emerywood Parkway Henrico VA 1980 56,076 100.0% 552
2277 Dabney Road Richmond VA 1986 50,400 100.0% 244
9200 Arboretum Parkway Richmond VA 1988 49,542 77.0% 533
9210 Arboretum Parkway Richmond VA 1988 47,943 100.0% 547
2212-2224 Tomlynn Street Richmond VA 1985 45,353 100.0% 282
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
80 Skyline Drive 9.46 Scientific Cell Company, Inc. (29%) - 8/10
Aviarms Support Corporation (27%) - 2/05
Gentiva Health Services (27%) - 2/03
Marketing Congress, Inc. (10%) - 6/02
Blaise Advertising, Inc. (10%) - 5/03
131 Jericho Turnpike 23.82 Katzman Weinstein Company (23%) - 11/04
120 Express Street 10.06 Tyz - All Plastics, Inc. (55%) - 11/08
Henderson & Bodwell (45%) - 9/02
110 Voice Road 8.65 Scales Air Compressor Corp. (100%) - 12/01
100 Voice Road 11.35 Nuclear Associates (100%) - 12/00
10 Skyline Drive 9.02 Shore Pharmaceutical (39%) - 6/05
Cold Spring Harbor Laboratories (29%) - 5/01
Tomra Metro, LLC (25%) - 4/05
180 Central Ave. / 2 Engineers Ln. 6.15 Yaleet, Inc. (100%) - 5/05
111 Ames Court 8.23 Centroid, Inc. (45%) - 4/05
Alarmguard, Inc. (41%) - 12/00
International Bonded Courier (13%) - 11/01
11 Commercial Street 10.36 Shore Pharmeceutical Providers, Inc. (100%) - 6/05
8 Engineers Lane 6.48 The Furniture Outlet (100%) - 9/04
19 Engineers Lane 7.00 First Commercial Asset Management (100%) - 1/03
VIRGINIA SEGMENT
600 East Main Street 21.09 GSA Department of Taxation (23%) - 11/01
Verizon (18%) - 11/03
300 Arboretum Place 16.22 The Travelers (40%) - 1/04
Trailblazer Health Enterprises (16%) - 12/08
1900 Gallows Road 22.35 GRC International (81%) - 5/09
National Captioning (18%) - 12/04
1880 Campus Commons Drive 16.08 Verizon Video Systems (100%) - 4/01
12015 Lee Jackson Memo(g)l Highway 23.76 Mantech (35%) - 5/07
Logicon Geodynamic (13%) - 8/07
Aerotek (13%) - 9/03
Walcoff & Associates (13%) - 5/05
Greenpoint Mortgage Funding, Inc. (10%) - 1/05
2511 Brittons Hill Road 5.44 Colortree, Inc. (56%) - 7/07
Circuit City Stores, Inc. (44%) - 6/01
11781 Lee Jackson Memo(g)l Highway 21.42 Logicon Geodynamic (32%) - 8/07 & 6/07
Oracle (30%) - 12/04
2100-2116 West Laburnam Avenue 15.71 Chesapeake Packaging Corp. (15%) - 12/02
Commercial Union Insurance (10%) - 9/01
1957 Westmoreland Street 4.61 Capital One Bank (100%) - 2/06
2201-2245 Tomlynn Street 7.66 Information Integration (27%) - 11/06
Halifax Corporation (24%) - 1/04
Micro View (13%) -3/01
Leonard Fishman & Son, Inc. (13%) - 4/04
9011 Arboretum Parkway 17.38 Elliptus Software (30%) - 8/03
Primeco Personal Communications (24%) - 7/05
4805 Lake Brooke Drive 18.27 Kemper Insurance (51%) - 10/10
Target (34%) - 2/03
J. Sargeant Reynolds (11%) - 9/01
9100 Arboretum Parkway 17.64 New York Life Insurance Co. (15%) - 3/04
Columbia HCA (13%) - 6/01
2812 Emerywood Parkway 11.14 Charter One (100%) - 1/03
2277 Dabney Road 5.12 West Home Health (48%) - 10/10
KAP, Inc. (33%) - 2/01
Goodall Rubber Company (17%) - 5/01
9200 Arboretum Parkway 13.40 Columbia Propane (29%) - 6/05
General Dynamics Govt. Systems Corp. (11%) - 11/03
Crown Castle USA, Inc. (10%) - 5/05
DR2DR.Com, Inc. (10%) - 3/03
9210 Arboretum Parkway 14.35 Triton PCS Property (25%) - 11/01
U.S. Marine Corps (17%) - 6/01
Land America Financial Group (17%) - 1/01
West End Orthopedic Clinic, Inc. (15%) - 7/04
Whiting Turner Contracting Co. (11%) - 12/05
2212-2224 Tomlynn Street 6.32 Carriage House (40%) - 7/01
Office Masters (12%) - 4/02
Alkat Electric, Inc. (11%) - 7/01
-21-
[Enlarge/Download Table]
Total Base Rent
Net Percentage for the Twelve
Rentable Leased as of Months Ended
Year Square December December 31,
Property Name Location State Built Feet 31, 2000 (a) 2000 (b) (000's)
------------- -------- ----- ----- -------- ------------- -----------------
2221-2245 Dabney Road Richmond VA 1994 45,250 100.0% 270
2201 Dabney Street Richmond VA 1962 45,000 100.0% -
2251 Dabney Road Richmond VA 1983 42,000 100.0% 166
2161-2179 Tomlynn Street Richmond VA 1985 41,550 100.0% 222
2256 Dabney Road Richmond VA 1982 33,560 72.6% 151
2246 Dabney Road Richmond VA 1987 33,271 85.6% 226
2244 Dabney Road Richmond VA 1993 33,050 100.0% 298
9211 Arboretum Parkway Richmond VA 1991 30,791 100.0% 413
2248 Dabney Road Richmond VA 1989 30,184 72.0% 186
2130-2146 Tomlynn Street Richmond VA 1988 29,700 100.0% 197
2120 Tomlyn Street Richmond VA 1986 23,850 100.0% 134
2110 Tomlynn Street Richmond VA 1965 15,910 0.0% 31
2240 Dabney Road Richmond VA 1984 15,389 100.0% 146
4364 South Alston Avenue Durham NC 1985 56,601 100.0% 1,048
----------- ---------
TOTAL ALL PROPERTIES / WEIGHTED AVG. 16,414,023 95.6% $ 235,274
=========== =========
[Enlarge/Download Table]
Average Tenants Leasing 10%
Annualized or More of Rentable
Rental Rate Square Footage per
as of Property as of
December December 31, 2000 and
31, 2000 (c) Lease Expiration Date
------------ ----------------------
2221-2245 Dabney Road 6.85 Ademco Distribution (30%) - 7/04
Hearth Services, Inc. (24%) - 6/02
Dal - Tile Corporation (16%) - 9/04
United Power Corporation (16%) - 4/02
DHL Airways (14%) - 8/03
2201 Dabney Street - Smith Turf & Irrigation, Co. (100%) 2/01-1/06
2251 Dabney Road 5.36 Wynne Guild (30%) - 1/01
Ultrabronz (30%) - 10/05
Cavalier Flooring Systems, Inc. (20%) - 4/03
Dominion Restoration (10%) - 7/05
Unit Instruments (10%) - 7/02
2161-2179 Tomlynn Street 5.98 United Power Corporation (40%) - 4/02
Kathleen's Bake Shop (29%) - 4/04
Dillard Paper Company (20%) - 11/01
KCI USA, Inc. (10%) - 6/02
2256 Dabney Road 5.72 Daycon Products (25%) - 5/04
Visual Aids (25%) - 5/01
Stanley Stephens Co. (23%) - 2/07
2246 Dabney Road 7.55 McKinney & Company (20%) - 12/00
Xerox Corporation (15%) - 6/02
Suitable for Framing (14%) - 8/01
Canning Corporation (14%) - 3/02
2244 Dabney Road 9.41 Pharmaco LSR International, Inc. (100%) - 8/04
9211 Arboretum Parkway 13.59 Bell Industries (50 %) - 12/02
Triton Property Management (30%) - 2/01
Jess Duboy Advertising (10%) - 2/02
KCI Technologies (10%) - 8/03
2248 Dabney Road 8.75 A&J Telephone Systems (21%) - 1/03
Pharmaco, Inc. (14%) - 8/04
2130-2146 Tomlynn Street 6.86 United Power Corporation (100%) - 4/02
2120 Tomlyn Street 6.21 United Power Corporation (42%) - 8/01
Unijax (30%) - 11/00
Fred & Gladys Connaster (15%) - 6/03
West End Signs (14%) - 11/01
2110 Tomlynn Street -
2240 Dabney Road 9.33 PDD Development, Inc. (100%) - 8/04
4364 South Alston Avenue 19.97 Cato Research (70%) - 7/01
Sandler & Recht (25%) - 2/01
TOTAL ALL PROPERTIES / WEIGHTED AVG. $ 16.77
-22-
(a) Calculated by dividing net rentable square feet included in leases signed
on or before December 31, 2000 at the property by the aggregate net
rentable square feet of the Property.
(b) "Total Base Rent" for the twelve months ended December 31, 2000 represents
base rents received during such period, excluding tenant reimbursements,
calculated in accordance with generally accepted accounting principles
(GAAP) determined on a straight-line basis. Tenant reimbursements generally
include payment of real estate taxes, operating expenses and common area
maintenance and utility charges.
(c) "Average Annualized Rental Rate" is calculated as follows: (i) for office
leases written on a triple net basis, the sum of the annualized contracted
base rental rates payable for all space leased as of December 31, 2000
(without giving effect to free rent or scheduled rent increases that would
be taken into account under GAAP) plus the 2000 budgeted operating expenses
excluding tenant electricity; and (ii) for office leases written on a full
service basis, the annualized contracted base rent payable for all space
leased as of December 31, 2000. In both cases the annualized rental rate is
divided by the total square footage leased as of December 31, 2000 without
giving effect to free rent or scheduled rent increases that would be taken
into account under GAAP.
(d) "Total Base Rent" reflected for these properties is presented on a
consolidated basis.
(e) These properties are under redevelopment and are excluded from the
percentages for Weighted Average Percentage Leased and Average Annualized
Rental Rate information.
(f) This property is subject to a ground lease.
(g) The Company has agreed to convey these properties to Prentiss as part of
the transaction referred to in Item 1. Business - Subsequent Event.
The following table shows certain information regarding rental rates and lease
expirations for the Properties at December 31, 2000, assuming none of the
tenants exercises renewal options or termination rights, if any, at or prior to
scheduled expirations:
[Enlarge/Download Table]
Final Percentage
Rentable Final Annualized of Total Final
Number of Square Annualized Base Rent Annualized
Year of Leases Footage Base Rent Per Square Base Rent
Lease Expiring Subject to Under Foot Under Under
Expiration Within the Expiring Expiring Expiring Expiring Cumulative
December 31, Year Leases Leases (a) Leases Leases Total
------------ ----------- ---------- ----------- ---------- -------------- ----------
2001 415 2,790,586 39,154,183 14.03 15.2% 15.2%
2002 309 2,488,509 36,167,158 14.53 14.0% 29.2%
2003 324 2,121,839 35,567,001 16.76 13.8% 43.0%
2004 232 1,760,012 30,620,998 17.40 11.9% 54.9%
2005 246 2,251,900 41,943,323 18.63 16.3% 71.2%
2006 54 1,077,608 12,755,729 11.84 4.9% 76.1%
2007 30 469,367 10,507,868 22.39 4.1% 80.2%
2008 20 463,492 8,697,723 18.77 3.4% 83.6%
2009 66 664,130 13,776,972 20.74 5.3% 88.9%
2010 40 652,112 16,497,439 25.30 6.4% 95.3%
2011 and thereafter 73 957,607 12,134,186 12.67 4.7% 100.0%
----- ---------- ----------- ----- -----
1,809 15,697,162 257,822,580 16.42 100.0%
===== ========== =========== ===== =====
(a) "Final Annualized Base Rent" for each lease scheduled to expire represents
the cash rental rate of base rents, excluding tenant reimbursements, in the
final month prior to expiration multiplied by 12. Tenant reimbursements
generally include payment of real estate taxes, operating expenses and
common area maintenance and utility charges.
-23-
At December 31, 2000, the Properties were leased to 1,246 tenants that are
engaged in a variety of businesses. The following table sets forth information
regarding leases at the Properties with the 20 tenants with the largest amounts
leased based upon Annualized Escalated Rent from the Properties as of December
31, 2000:
[Enlarge/Download Table]
Percentage of
Remaining Aggregate Percentage Annualized Aggregate
Number Lease Square of Aggregate Escalated Annualized
of Term in Feet Leased Rent (in Escalated
Tenant Name (a) Leases Months Leased Square Feet 000) (b) Rent
--------------- ------ --------- --------- ------------ ---------- -------------
First USA Bank 8 (c) 619,370 3.9% $13,014 4.4%
State of New Jersey 5 (d) 415,945 2.6% 11,133 3.8%
Verizon 6 (e) 429,916 2.7% 8,976 3.0%
General Electric 3 (f) 226,102 1.4% 4,762 1.6%
Penske Truck Leasing 1 60 233,824 1.5% 4,499 1.5%
Lockheed Martin 7 (g) 311,722 2.0% 4,094 1.4%
GRC International 1 101 166,597 1.1% 4,033 1.4%
Omnicare Clinical Research 1 115 150,000 1.0% 3,638 1.2%
The Hartford 4 (h) 182,481 1.2% 3,599 1.2%
Parsons Corporation 3 (i) 174,689 1.1% 3,387 1.1%
Tiavelets 3 (j) 182,717 1.2% 3,254 1.1%
A, entis Behring 4 (k) 122,013 0.8% 2,781 0.9%
Highinark Corporation 3 (1) 127,679 0.8% 2,672 0.9%
Keystone Health Plan Central 1 44 122,101 0.8% 2,522 0.9%
American Business Financial Services 1 31 89,799 0.6% 2,499 0.8%
Decision One 1 60 109,800 0.7% 2,326 0.8%
Computer Sciences Corporation 3 (m) 96,733 0.6% 2,305 0.8%
Kimberly Clark Corporation (Scott Paper) 1 60 93,014 0.6% 2,282 0.8%
Reliance Insurance Company 5 (n) 83,979 0.5% 2,161 0.7%
Virginia Department ofTaxation 1 11 91,945 0.6% 2,044 0.7%
-- --- --------- ---- ------- ----
Consolidated Total/Weighted Average 62 71 4,030,426 25.7% $85,981 29.0%
== === ========= ==== ======= ====
(a) The identified tenant includes affiliates in certain circumstances.
(b) Annualized Escalated Rent represents the monthly Escalated Rent for each
lease in effect at December 31, 2000 multiplied by 12. Escalated Rent
represents fixed base rental amounts plus pass-throughs of operating
expenses, including electricity costs. The Company estimates operating
expense pass-throughs based on historical amounts and comparable market
data.
(c) Consists of eight leases: a lease representing 274,531 net rentable square
feet that expires in January 2017, a lease representing 244,080 net
rentable square feet that expires in December 2015, two leases representing
53,894 net rentable square feet that expire in June 2010, a lease
representing 7,088 net rentable square feet that expires in December 2010,
a lease representing 19,708 net rentable square feet that expires in April
2005, a lease representing 19,666 net rentable square feet that expires in
June 2005 and a lease representing 403 net rentable square feet that the
tenant occupies on a month-to-month basis.
(d) Consists of five leases: a lease representing 222,987 net rentable square
feet that expires in September 2009, a lease representing 117,428 net
rentable square feet that expires in August 2008, a lease representing
5,280 net rentable square feet that expires in September 2007, a lease
representing 43,201 square feet that expires in July 2005 and a lease
representing 27,049 net rentable square feet that expires in December 2002.
(e) Consists of six leases: a lease representing 74,728 net rentable square
feet that expires in July 2006, a lease representing 17,179 net rentable
square feet that expires in October 2004, a lease representing 85,561 net
rentable square feet that expires in August 2004, a lease representing
80,000 net rentable square feet that expires in November 2003, a lease
representing 172,448 net rentable square feet that expires in April 2001and
a rooftop lease that expired in February 2001.
(f) Consists of three leases: two leases representing 94,102 net rentable
square feet that expire in September 2003 and a lease representing 132,000
net rentable square feet that expires in September 2001.
(g) Consists of seven leases: a lease representing 15,237 net rentable square
feet that expires in July 2007, a lease representing 46,945 net rentable
square feet that expires in April 2005, a lease representing 13,956 net
rentable square feet that expires in October 2004, a lease representing
158,000 net rentable square feet that expires in September 2002, a lease
representing 12,498 net rentable square feet that expires in June 2002, a
lease representing 30,280 net rentable square feet that expires in May 2002
and a lease representing 34,806 net rentable square feet that expires in
April 2002 .
(h) Consists of four leases: three leases representing 147,461 net rentable
square feet that expire in December 2007 and a lease representing 35,020
net rentable square feet that expires in December 2004.
(i) Consists of three leases: a lease representing 169,013 net rentable square
feet that expires in March 2010, a lease representing 4,474 net rentable
square feet that expires in March 2005 and a license agreement representing
1,202 net rentable square feet that the tenant occupies on a month-to-month
basis.
-24-
(j) Consists of three leases: a lease representing 82,875 net rentable square
feet that expires in January 2004, a lease representing 51,314 net rentable
square feet that expires in February 2002 and a lease representing 47,988
net rentable square feet that expires in December 2001.
(k) Consists of four leases: two leases that represent 26,652 net rentable
square feet that expire in January 2003 and two leases that represent
95,361 net rentable square feet that expire in October 2002.
(l) Consists of three leases: a lease representing 53,179 net rentable square
feet that expires in August 2004, a lease representing 14,500 net rentable
square feet that expires in December 2003 and a lease representing 60,000
net rentable square feet that expires in May 2001.
(m) Consists of three leases: two leases representing 59,903 net rentable
square feet that expire in May 2002 and a lease representing 36,830 net
rentable square feet that expires in November 2001.
(n) Consists of five leases: two leases representing 4,907 net rentable square
feet that expire in January 2003, a lease representing 68,841 net rentable
square feet that expires in October 2002, a lease representing 3,848 net
rentable square feet that expires in June 2002 and a lease representing
6,383 net rentable square feet that expired in February 2001.
Real Estate Ventures
Through December 31, 2000, the Company had invested approximately $33.6 million
in thirteen Real Estate Ventures (net of returns of investment received by the
Company). The Company, through subsidiaries, formed these ventures with
unaffiliated third parties to develop office properties or to acquire land in
anticipation of possible development of office properties. Nine of the Real
Estate Ventures own ten office buildings that contain an aggregate of
approximately 1.3 million net rentable square feet; two Real Estate Ventures are
developing two office buildings that will contain, upon completion, an aggregate
of approximately 316,000 net rentable square feet; one Real Estate Venture is
developing a hotel property that will contain, upon completion, approximately
137 rooms; and one Real Estate Venture holds approximately six acres of land for
future development. At December 31, 2000, the operating properties owned by the
Real Estate Ventures were approximately 98% leased to 58 tenants.
Item 3. Legal Proceedings
The Company is involved from time to time in litigation on various matters,
which include disputes with tenants and disputes arising out of agreements to
purchase or sell properties. Given the nature of the Company's business
activities, these lawsuits are considered routine to the conduct of its
business. The result of any particular lawsuit cannot be predicted, because of
the very nature of litigation, the litigation process and its adversarial
nature, and the jury system.
Reference is made to the litigation disclosed in Part II, Item 1 of the
Company's Form 10-Q for the quarter ended September 30, 2000. On July 9, 1999,
the Superior Court of New Jersey, Camden County, dismissed the complaint against
the Company with prejudice. The plaintiffs subsequently filed a motion for
reconsideration, which motion the Superior Court denied. Plaintiffs then
appealed to the Appellate Division, which is the intermediate appellate level
court in New Jersey. In December 2000, the Appellate Division affirmed in part
and reversed in part the Chancery Division's earlier dismissal of the entire
action. The Appellate Division affirmed the dismissal of the fraud and other
non-contractual counts in the Complaint, but reversed the contract and
reformation counts and remanded these to the lower court for further
proceedings. The Company sought review of this decision by the Supreme Court of
New Jersey, but in March 2001, that Court declined to consider the appeal. The
case will therefore return to the Chancery Division, where it is expected to
proceed through the discovery process.
In November 1999, a third-party complaint was filed in the Superior Court of New
Jersey, Burlington County, by BRI OP Limited Partnership ("BRI OP") against the
Company and several other persons and entities, including several former
affiliates of the Company, relative to Greentree Shopping Center located in
-25-
Marlton, New Jersey ("Subject Property"). The Subject Property was owned and
managed by a subsidiary of the Company between 1986 and 1988. BRI OP, also a
former owner of the Subject Property, has been sued by the present owner and
manager of the Subject Property, seeking indemnification and contribution for
costs related to the remediation of environmental contamination allegedly caused
by a dry cleaning business, which was a tenant of the Subject Property. BRI OP,
in turn, brought a third-party action against the Company and others seeking
indemnification for environmental remediation and clean up costs for which it
may be held liable. This legal proceeding remains in the early stages of
discovery, as the plaintiff has yet to complete testing that would document its
alleged damages. However, the Company believes, based on its assessment of the
potential cost of any required remediation, the availability of other parties
that are potentially responsible for all or a portion of such cost, and defenses
that may be available to the Company, that this proceeding will not have a
material adverse effect on the Company's financial position or results of
operations.
Item 4. Submission of Matters to a Vote of Security Holders
The Company did not submit any matters to a vote of security holders in the
fourth quarter of the fiscal year ended December 31, 2000.
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters
The Common Shares are traded on the New York Stock Exchange ("NYSE") under the
symbol "BDN." On March 27, 2001, there were approximately 305 holders of record
of the Common Shares. On March 27, 2001, the last reported sales price of the
Common Shares on the NYSE was $19.55. The following table sets forth the
quarterly high and low closing sales price per share reported on the NYSE for
the indicated periods and the distributions paid by the Company with respect to
each such period.
Share Price Share Price Distributions
High Low Declared For Quarter
----------- ----------- --------------------
First Quarter 1999 $18 2/16 $16 3/16 $0.39
Second Quarter 1999 $20 7/16 $16 $0.39
Third Quarter 1999 $20 1/8 $16 1/4 $0.39
Fourth Quarter 1999 $17 1/2 $15 1/8 $0.40
First Quarter 2000 $17 1/8 $15 6/16 $0.40
Second Quarter 2000 $19 6/16 $16 13/16 $0.40
Third Quarter 2000 $21 5/8 $19 1/2 $0.41
Fourth Quarter 2000 $21 3/8 $18 3/8 $0.41
Future distributions by the Company will be declared at the discretion of the
Board of Trustees and will depend on the actual cash flow of the Company, its
financial condition, capital requirements, the annual distribution requirements
under the REIT provisions of the Internal Revenue Code of 1986 and such other
factors as the Board of Trustees deems relevant.
During 2000 and through the date of this Annual Report on Form 10-K, the Company
did not issue any securities, and equity awards to Company employees were funded
through open market acquisitions of Common Shares.
-26-
Item 6. Selected Financial Data
(in thousands, except per Common Share data and number of properties)
[Enlarge/Download Table]
Year Ended December 31, 2000 1999 1998 1997 1996
-------------------------------------------------------------------------------
Operating Results
Total revenue $ 287,084 $ 283,220 192,861 $ 61,060 $ 10,030
Net income (loss) 52,158 34,606 33,025 15,001 (162)
Income (loss) allocated to Common Shares 40,252 29,816 32,323 14,502 (563)
Earnings per Common Share
Basic $ 1.12 $ 0.80 $ 0.90 $ 0.96 $ (0.44)
Diluted $ 1.12 $ 0.80 $ 0.89 $ 0.95 $ (0.44)
Cash distributions declared per Common Share $ 1.62 $ 1.57 $ 1.52 $ 1.44 $ 0.82
Balance Sheet Data
Real estate investments, net of
accumulated depreciation $ 1,674,341 $ 1,702,353 $ 1,840,618 $ 563,557 $ 151,901
Total assets 1,825,440 1,829,916 1,911,680 621,481 178,326
Total indebtedness 866,202 839,634 1,000,560 163,964 36,644
Total liabilities 923,961 895,083 1,040,828 181,576 43,558
Minority interest 144,974 145,941 127,198 14,377 6,398
Beneficiaries' equity 756,505 788,892 706,154 425,528 101,926
Other Data
Funds from operations $ 120,505 $ 110,042 $ 84,569 $ 30,035 $ 2,589
Cash flows from:
Operating activities 102,243 80,400 73,116 33,124 2,559
Investing activities (32,372) 69,195 (903,193) (418,256) (35,401)
Financing activities (59,523) (156,978) 813,710 396,295 50,281
Property Data
Number of properties owned at year end 250 251 272 117 37
Net rentable square feet owned at year end 16,471 16,607 18,834 7,131 1,994
-27-
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion should be read in conjunction with the financial
statements appearing elsewhere herein. The results of operations, liquidity and
capital resources and cash flows of the Company include the historical results
of operations of the Properties held by the Company during the years ended
December 31, 2000, 1999 and 1998. This Annual Report on Form 10-K contains
forward-looking statements for purposes of the Securities Act of 1933 and the
Securities Exchange Act of 1934 and as such may involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions, there can
be no assurance that these expectations will be realized. See Item 1. Business -
Risk Factors.
OVERVIEW
The Company currently manages its portfolio within three geographic segments:
(1) Pennsylvania, (2) New Jersey/New York and (3) Virginia. The Company believes
it has established an effective platform in these office and industrial markets
that provides a foundation for achieving its goals of maximizing market
penetration and optimizing operating economies of scale.
During 2000, the Company sold seven office properties, containing 630,000 net
rentable square feet, and two parcels of land, containing 5.0 acres, for $101.1
million. In addition, the Company acquired two parcels of land, containing 36.0
acres, for $7.0 million.
The Company receives income primarily from rental revenue (including tenant
reimbursements) from the Properties and, to a lesser extent, from the management
of certain properties owned by third parties and from investments in the Real
Estate Ventures. The Company expects that revenue growth in the next two years
will result primarily from rent increases in its current portfolio, the
development or redevelopment of office properties and, if consummated, the
pending transaction with Prentiss. As of December 31, 2000, the Company had
seven buildings in development or redevelopment aggregating 577,000 square feet.
RESULTS OF OPERATIONS
Comparison of the Year Ended December 31, 2000 to the Year Ended December 31,
1999
Revenue (which includes rental income, recoveries from tenants, and other
income) increased to $287.1 million for 2000 as compared to $283.2 million for
1999, primarily due to increased rental rates and occupancy, partially offset by
property dispositions in 2000. The straight-line rent adjustment increased
revenues by $6.4 million in 2000 and $8.1 million in 1999. Average occupancy
increased to 95.0% in 2000 as compared to 93.6% for 1999.
Property operating expenses increased to $65.6 million in 2000 as compared to
$64.6 million in 1999, primarily due to increased repair and maintenance
expenses and the start-up of e-Tenants.com in 2000. e-Tenants is a web-based
service that provides tenants with comprehensive business-to-business,
business-to-consumer and on-line work order placement capabilities.
Real estate taxes increased to $26.2 million in 2000 as compared to $25.5
million in 1999, primarily due to increased real estate tax assessments in 2000,
partially offset by property dispositions in 2000.
Interest expense decreased to $64.7 million in 2000 as compared to $69.8 million
in 1999, primarily due to decreased average borrowings resulting from property
dispositions in 2000, partially offset by increased interest rates. Average
outstanding debt balances for 2000 were $871.3 million as compared to $927.3
million for 1999. The Company's weighted-average interest rate on unsecured
credit facilities increased to 7.84% in 2000 from 6.95% in 1999 and on mortgage
notes payable increased to 7.92% in 2000 from 7.1% in 1999.
-28-
Depreciation decreased to $64.0 million in 2000 as compared to $66.5 million in
1999 primarily due to property dispositions in 2000. Amortization, related to
deferred leasing costs, increased to $3.0 million in 2000 as compared to $2.8
million in 1999, primarily due to increased leasing activity.
Management fees increased slightly to $12.1 million in 2000 as compared to $12.0
million in 1999, primarily due to increased revenue on which management fees are
calculated, partially offset by property dispositions in 2000.
Administrative expenses increased to $4.2 million in 2000 as compared to $3.6
million in 1999, primarily due to amortization of deferred compensation costs
related to additional restricted Common Shares awarded in 2000 and a
compensation accrual for loans made to executives to purchase Common Shares
which will be forgiven over a three year period.
Equity in income of Real Estate Ventures increased to $2.8 million in 2000 as
compared to $1.0 million in 1999, primarily due to an increase in the number of
ventures commencing operations.
During 2000, the Company sold seven office properties and two land parcels for
$101.1 million, realizing a net gain of $11.6 million. During 1999, the Company
sold seven office properties and 20 industrial facilities, realizing a net gain
of $3.1 million.
Minority interest represents the equity in income attributable to the portion of
the Operating Partnership not owned by the Company. Minority interest increased
to $9.6 million in 2000 as compared to $8.0 million in 1999, primarily due to
the allocation of the net gain from sales of property in 2000.
Comparison of the Year Ended December 31, 1999 to the Year Ended December 31,
1998
Revenue increased to $283.2 million for 1999 as compared to $192.9 million for
1998, primarily due to property acquisitions made during the latter part of 1998
and, to a lesser extent, increased rental rates. The straight-line rent
adjustment increased revenues by $8.1 million in 1999 and $6.3 million in 1998.
Property operating expenses increased to $64.6 million in 1999 as compared to
$44.5 million in 1998, primarily due to property acquisitions during the latter
part of 1998.
Real estate taxes increased to $25.5 million in 1999 as compared to $16.4
million in 1998, primarily due to property acquisitions during the latter part
of 1998.
Interest expense increased to $69.8 million in 1999 as compared to $36.9 million
in 1998, primarily due to increased borrowings incurred in connection with
property acquisitions made during the latter part of 1998, partially offset by
reduced interest rates. Average outstanding debt balances for 1999 were $927.3
million as compared to $575.6 million for 1998. The Company's weighted-average
interest rate on unsecured credit facilities decreased to 6.95% in 1999 from
7.05% in 1998 and on mortgage notes payable to 7.1% in 1999 from 7.6% in 1998.
Depreciation decreased to $66.5 million in 1999 as compared to $45.3 million in
1998, primarily due to property acquisitions made during the latter part of
1998. Amortization, related to deferred leasing costs, increased to $2.8 million
in 1999 as compared to $2.7 million in 1998, primarily due to increased leasing
activity.
Management fees increased to $12.0 million in 1999 as compared to $6.9 million
in 1998, primarily due to property acquisitions made during the latter part of
1998.
-29-
Administrative expenses increased to $3.6 million in 1999 as compared to $3.2
million in 1998, primarily due to the amortization of deferred compensation
costs related to additional restricted stock awarded in 1999.
Equity in income of Real Estate Ventures increased to $1.0 million in 1999 as
compared to $.1 million in 1998, primarily due to an increase in the number of
ventures commencing operations.
During 1999, the Company sold seven office properties and 20 industrial
facilities, realizing a net gain of $3.1 million. During 1998, the Company sold
one office property for $14.7 million, realizing a net gain of $.2 million.
Minority interest income increased to $8.0 million in 1999 as compared to $2.4
million in 1998, primarily due to the property acquisitions made during the
latter part of 1998.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
During 2000, the Company generated $102.2 million in cash flow from operating
activities. Other sources of cash in-flows consisted of: (i) $107.4 million of
additional mortgage notes payable, (ii) $101.1 million of net proceeds from
property sales and (iii) $71.0 million of proceeds from draws on the Credit
Facility. During 2000, cash out-flows consisted of: (i) $113.1 million to fund
capital expenditures, (ii) $109.5 million to repay borrowings under the Credit
Facility, (iii) $69.0 million of distributions to shareholders, (iv) $42.4
million of mortgage note repayments, (v) $15.3 million to repurchase Common
Shares, (vi) $7.0 million for property acquisitions, (vii) $6.6 million of
leasing costs, (viii) $4.0 million of escrowed cash, (ix) $2.7 million of
additional investment in Real Estate Ventures and (x) $1.7 million of debt
costs.
Capitalization
At December 31, 2000, the Company maintained a $450.0 million Credit Facility.
(See Item 1. Business-Credit Facility)
As of December 31, 2000, the Company had approximately $866.2 million of debt
outstanding, consisting of $338.3 million of borrowings under the Credit
Facility and $527.9 million of mortgage notes payable. The mortgage notes
payable consists of $401.5 million of fixed rate loans and $126.4 million of
variable rate loans. Additionally, the Company has entered into interest rate
swap and cap agreements to fix the interest rate on $253.0 million of the Credit
Facility and variable rate loans. The mortgage loans mature or matured between
January 2001 and July 2027. As of December 31, 2000, the Company also had $15.1
million of letters-of-credit outstanding and $96.6 million of unused
availability under the Credit Facility. For the year ended December 31, 2000,
the weighted-average interest rate under the Company's Credit Facility was
7.84%, and the weighted-average interest rate for borrowings under mortgage
notes payable was 7.92%.
As of December 31, 2000, the Company's debt-to-market capitalization ratio was
46.9%. As a general policy, the Company intends, but is not obligated, to adhere
to a policy of maintaining a long-term average debt-to-market capitalization
ratio of no more than 50%.
The Company's Board of Trustees approved a share repurchase program authorizing
the Company to repurchase up to 3,000,000 of its outstanding Common Shares. No
time limit has been placed on the duration of the share repurchase program.
During 2000, the Company repurchased 957,729 Common Shares for an aggregate of
$15.3 million (an average price of $15.95 per share). The Company may purchase
an additional 611,232 Common Shares under this program.
-30-
Short- and Long-Term Liquidity
The Company believes that cash flow from operations and current financing
alternatives are adequate to fund its short-term liquidity requirements for
2001. Cash flow from operations is generated primarily from rental revenues,
operating expense reimbursements from tenants, and provision of management
services to third parties. The Company intends to use these funds to meet its
principal short-term liquidity needs, which are to fund operating expenses, debt
service requirements, recurring capital expenditures, tenant allowances, leasing
commissions and the minimum distributions required to maintain the Company's
REIT qualifications under the Internal Revenue Code.
On December 8, 2000, the Board of Trustees declared a quarterly dividend
distribution of $0.41 per share, paid on January 15, 2001 to shareholders of
record as of December 31, 2000. Distributions declared in 2000 totaled $1.62 per
share as compared to $1.57 per share in 1999, representing an increase of
approximately 3.2%.
The Company expects to meet its long-term liquidity requirements, such as for
property acquisitions, development, investments in real estate ventures,
scheduled debt maturities, major renovations, expansions and other significant
capital improvements, through borrowings under its Credit Facility, long-term
secured and unsecured indebtedness, the issuance of equity securities and the
disposition of certain properties.
Funds from Operations
Management considers Funds from Operations ("FFO") as one measure of REIT
performance. FFO is calculated as net income (loss) adjusted for depreciation
expense attributable to real property, amortization expense attributable to
capitalized leasing costs, gains on sales of land interests, and extraordinary
items and comparable adjustments for real estate ventures accounted for using
the equity method. Management believes that FFO is a useful disclosure in the
real estate industry; however, the Company's disclosure may not be comparable to
other REITs'. FFO should not be considered an alternative to net income as an
indication of the Company's operating performance or to operating cash flows as
a measure of liquidity.
The following table summarizes FFO for the years ended December 31, 2000 and
1999 (in thousands, except share data):
[Enlarge/Download Table]
2000 1999
----------- -----------
Income before gains on sale, minority interest and extraordinary item 50,118 $ 39,487
Add (deduct):
Depreciation:
Attributable to real property 64,041 66,493
Attributable to real estate ventures 2,513 1,242
Amortization attributable to leasing costs 2,971 2,820
Gain on sale of land interests 862 -
Funds from operations before minority interest $ 120,505 $ 110,042
=========== ===========
We ighted -average Common Shares (including Common
Share equivalents) and Operating Partnership units 47,449,673 45,190,881
=========== ===========
Inflation
A majority of the Company's leases provide for escalations of real estate taxes
and operating expenses either on a triple net basis or over a base amount. In
addition, many of the office leases provide for fixed base rent increases or
indexed escalations (based on the CPI or other measure). The Company believes
that inflationary increases in expenses will be significantly offset by expense
reimbursement and contractual rent increases.
-31-
Interest Rate Risk and Sensitivity Analysis
The analysis below presents the sensitivity of the market value of the Company's
financial instruments to selected changes in market rates. The range of changes
chosen reflects the Company's view of changes which are reasonably possible over
a one-year period. Market values are the present value of projected future cash
flows based on the market rates chosen.
The Company's financial instruments consist of both fixed and variable rate
debt. As of December 31, 2000, the Company's consolidated debt consisted of
$401.5 million in fixed rate mortgages and $126.4 million in variable rate
mortgage notes, and $338.3 million borrowed under its Credit Facility. All
financial instruments were entered into for other than trading purposes and the
net market value of these financial instruments is referred to as the net
financial position. Changes in interest rates have different impacts on the
fixed and variable rate portions of the Company's debt portfolio. A change in
interest rates on the fixed portion of the debt portfolio impacts the net
financial instrument position, but has no impact on interest incurred or cash
flows. A change in interest rates on the variable portion of the debt portfolio
impacts the interest incurred and cash flows, but does not impact the net
financial instrument position.
The Company has entered into interest rate swap and rate cap agreements designed
to reduce the impact of interest rate changes on its variable rate debt. At
December 31, 2000, the Company had two interest rate swap agreements for
notional principal amounts aggregating $150 million. The swap agreements
effectively fix the interest rate on $50 million of Credit Facility borrowings
at 6.08% and on $100 million of Credit Facility borrowings at 6.383% until
September 2002. The interest rate caps effectively fix the interest rate on two
variable rate mortgages. One rate cap fixes the interest rate on a mortgage with
a notional value of $75 million at 6.25% until April 2001 and then at 7% until
maturity in April 2002. The second interest rate cap fixes the interest rate on
a mortgage with a notional value of $28 million at 8.7% until July 2004.
The sensitivity analysis related to the fixed portion of the Company's debt
portfolio assumes an instantaneous 1% move in interest rates from their actual
levels at December 31, 2000 with all other variables held constant. As of
December 31, 2000, a 1% increase in actual interest rates would result in a
decrease in beneficiaries' equity of $21.3 million and a 1% decrease in actual
interest rates would result in an increase in beneficiaries' equity of $23.9
million.
Based on the Company's variable rate debt as of December 31, 2000, a 1% increase
in interest rates would result in an additional $2.2 million in interest expense
per year and a 1% decrease would reduce interest expense by $4.6 million per
year.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
See discussion in Management's Discussion and Analysis included in Item 7
herein.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary financial data are listed under Item
14(a) and filed as part of this Annual Report on Form 10-K. See Item 14.
-32-
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Trustees and Executive Officers of the Company
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with respect to its Annual Meeting of Shareholders expected to be held
on May 7, 2001.
Item 11. Executive Compensation
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with respect to its Annual Meeting of Shareholders expected to be held
on May 7, 2001.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with respect to its Annual Meeting of Shareholders expected to be held
on May 7, 2001.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with respect to its Annual Meeting of Shareholders expected to be held
on May 7, 2001.
-33-
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
(a) 1. and 2. Financial Statements and Schedules
The financial statements and schedules listed below are filed as part of this
annual report on the pages indicated.
Index to Financial Statements and Schedules
Page
----
Report of Independent Public Accountants....................................F-1
Consolidated Balance Sheets as of December 31, 2000 and December 31, 1999...F-2
Consolidated Statements of Operations for the Years
Ended December 31, 2000, 1999 and 1998....................................F-3
Consolidated Statements of Beneficiaries' Equity for the Years
Ended December 31, 2000, 1999 and 1998....................................F-4
Consolidated Statements of Cash Flows for the Years
Ended December 31, 2000, 1999 and 1998....................................F-5
Notes to Consolidated Financial Statements..................................F-6
Schedule II - Valuation and Qualifying Accounts.............................F-19
Schedule III - Real Estate and Accumulated Depreciation.....................F-20
3. Exhibits
[Enlarge/Download Table]
Exhibits No. Description
------------ -----------
(1) 3.1.1 Amended and Restated Declaration of Trust of the Company (amended and restated as of May 12, 1997).
(2) 3.1.2 Articles of Amendment to Declaration of Trust of the Company (September 4, 1997).
(3) 3.1.3 Articles of Amendment to Declaration of Trust of the Company (No. 2).
(4) 3.1.4 Articles Supplementary to Declaration of Trust of the Company (September 28, 1998)
(5) 3.1.5 Articles of Amendment to Declaration of Trust of the Company (March 19, 1999)
3.2 Amended and Restated Bylaws of the Company.
(6) 10.01 Brandywine Realty Partners General Partnership Agreement.
(6) 10.02 Second Amended and Restated Partnership Agreement of Brandywine Realty Services Partnership.
(7) 10.03 Amendment to Brandywine Realty Partners General Partnership Agreement.
(8) 10.04 Third Amendment to Brandywine Realty Partners General Partnership Agreement.
(8) 10.05 Form of Warrant issued to Executive Officers. **
(8) 10.06 Environmental Indemnity Agreement between the Company and SSI.
(8) 10.07 Articles of Incorporation of Brandywine Realty Services Corporation, as amended.
(9) 10.08 Amended and Restated Agreement of Limited Partnership of Brandywine Operating Partnership, L.P. (the
"Operating Partnership").
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[Enlarge/Download Table]
(9) 10.09 Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of the Operating Partnership.
(9) 10.10 First Amendment to Amended and Restated Agreement of Limited Partnership of the Operating Partnership
(9) 10.11 Tax Indemnification Agreement - PWCC
(9) 10.12 Tax Indemnification Agreement - Laurel Oak
(9) 10.13 Tax Indemnification Agreement - English Creek
(10) 10.14 Second Amendment, dated March 31, 1998, to the Amended and Restated Agreement of Limited Partnership
Agreement of Brandywine Operating Partnership, L.P.
(10) 10.15 Tax Indemnification Agreement, dated March 31, 1998, by and between Brandywine Operating Partnership,
L.P. and Brookstone Investors, L.L.C.
(10) 10.16 Tax Indemnification Agreement, dated March 31, 1998, by and between Brandywine Operating Partnership,
L.P. and Brookstone Holdings of Del. -4, L.L.C.
(10) 10.17 Tax Indemnification Agreement, dated March 31, 1998, by and between Brandywine Operating Partnership,
L.P. and Brookstone Holdings of Del. -5, L.L.C.
(10) 10.18 Tax Indemnification Agreement, dated March 31, 1998, by and between Brandywine Operating Partnership,
L.P. and Brookstone Holdings of Del. -6, L.L.C.
(11) 10.19 Contribution Agreement, dated April 7, 1998, by and between the entities listed on Schedule thereto
and Brandywine Operating Partnership, L.P.
(11) 10.20 First Amendment to Contribution Agreement dated May 8, 1998.
(11) 10.21 Third Amendment, dated May 8, 1998, to the Amended and Restated Agreement of Limited Partnership of
Brandywine Operating Partnership, L. P.
(11) 10.22 Tax Indemnification Agreement dated May 8, 1998, by and between Brandywine Operating Partnership,
L.P. and the parties identified on the signature page.
(12) 10.23 Contribution Agreement (Axinn)
(12) 10.24 Form of Axinn Options **
(12) 10.26 Form of Hamer Options **
(4) 10.27 Second Amended and Restated Credit Agreement
(4) 10.28 Pledge Agreement
(4) 10.29 Credit Agreement
(4) 10.30 Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership creating the Series A Preferred Mirror Units.
(4) 10.31 Fifth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership creating the Series B Preferred Units.
(4) 10.32 Sixth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership
(4) 10.33 First Amendment to Contribution Agreement (Axinn)
(13) 10.34 Contribution and Purchase Agreement (Lazard)
(13) 10.35 Form of Board of Trustees Designation Letter
10.36 Amended and Restated Employment Agreement dated as of December 8, 2000 of Anthony A. Nichols, Sr.**
10.37 Amended and Restated Employment Agreement dated as of December 8, 2000 of Gerard H. Sweeney**
(5) 10.38 Amended and Restated Non-Qualified Stock Option Award to Anthony A. Nichols, Sr. **
(5) 10.39 Amended and Restated Non-Qualified Stock Option Award to Gerard H. Sweeney **
(5) 10.40 Non-Qualified Stock Option Award to Jeffrey F. Rogatz **
(14) 10.41 Restricted Share Awards to Anthony A. Nichols, Sr. **
(14) 10.42 Restricted Share Awards to Gerard H. Sweeney **
(5) 10.43 Long-Term Performance Award for Anthony A. Nichols, Sr. **
(5) 10.44 Long-Term Performance Award for Gerard H. Sweeney**
(5) 10.45 Long-Term Performance Award for Anthony S. Rimikis **
(5) 10.46 Severance Agreement (Jeffrey F. Rogatz) **
(5) 10.47 Severance Agreement (Anthony S. Rimikis) **
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[Enlarge/Download Table]
(5) 10.48 Third Amendment to Restricted Share Award to Anthony A. Nichols, Sr.**
(5) 10.49 Third Amendment to Restricted Share Award to Gerard H. Sweeney.**
(5) 10.50 Restricted Share Award to Jeffrey F. Rogatz (May 1999).**
(5) 10.51 Restricted Share Award to Anthony S. Rimikis.**
(5) 10.52 Restricted Share Award to Jeffrey F. Rogatz (January 2000).**
(5) 10.53 Loan Agreement with Gerard H. Sweeney.**
(5) 10.54 Loan Agreement with Anthony A. Nichols, Sr.**
10.55 Fourth Amendment to Restricted Share Award to Anthony A. Nichols, Sr.**
10.56 Fourth Amendment to Restricted Share Award to Gerard H. Sweeney**
10.57 Severance Agreement (Barbara L. Yamarick)**
10.58 Severance Agreement (Anthony A. Nichols, Jr.)**
10.59 Severance Agreement (H. Jeffrey De Vuono)**
10.60 Severance Agreement (George Sowa)**
10.61 Severance Agreement (Bradley W. Harris)**
10.62 Restricted Share Award to Anthony A. Nichols, Sr.**
10.63 Restricted Share Award to Gerard H. Sweeney**
10.64 Restricted Share Award to Anthony S. Rimikis**
10.65 Restricted Share Award to Barbara L. Yamarick
10.66 Restricted Share Award to Anthony A. Nichols, Jr.**
10.67 Restricted Share Award to H. Jeffrey De Vuono**
10.68 Restricted Share Award to George Sowa**
10.69 Restricted Share Award to Bradley W. Harris**
10.70 Restricted Share Award to Jeffrey F. Rogatz**
(15) 10.71 Exchange Agreement (Virginia properties) - Prentiss Transaction
(15) 10.72 Exchange Agreement (Pennsylvania/New Jersey properties) - Prentiss Transaction
(15) 10.73 Agreement of Purchase and Sale (Fee Transfer properties) - Prentiss Transaction
(15) 10.74 Agreement of Purchase and Sale (Entity Transfer properties) - Prentiss Transaction
(15) 10.75 Contribution Agreement (Joint Venture Interest) - Prentiss Transaction
(15) 10.76 Agreement of Purchase and Sale (935) First Avenue) - Prentiss Transaction
(15) 10.77 Form of Fourteenth Amendment to Second Amended and Restated Agreement of Limited Partnership of
Prentiss - Prentiss Transaction
21.1 List of Subsidiaries of the Company
23.1 Consent of Arthur Andersen LLP
(1) Previously filed as an exhibit to the Company's Form 8-K dated June 9, 1997
and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Form 8-K dated September
10, 1997 and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's Form 8-K dated June 3, 1998
and incorporated herein by reference.
(4) Previously filed as an exhibit to the Company's Form 8-K dated October 13,
1998 and incorporated herein by reference.
(5) Previously filed as an exhibit to the Company's Form 10-K for the fiscal
year ended December 31, 1999 and incorporated herein by reference.
(6) Previously filed as an exhibit to the Company's Registration statement of
Form S-11 (File No. 33-4175) and incorporated herein by reference.
(7) Previously filed as an exhibit to the Company's Form 10-K for the fiscal
year ended December 31, 1993 and incorporated herein by reference.
(8) Previously filed as an exhibit to the Company's Form 8-K dated August 22,
1996 and incorporated herein by reference.
(9) Previously filed as an exhibit to the Company's Form 8-K dated December 17,
1997 and incorporated herein by reference.
-36-
(10) Previously filed as an exhibit to the Company's Form 8-K dated April 13,
1998 and incorporated herein by reference.
(11) Previously filed as an exhibit to the Company's Form 8-K dated May 14, 1998
and incorporated herein by reference.
(12) Previously filed as an exhibit to the Company's Form 8-K dated July 30,
1998 and incorporated herein by reference.
(13) Previously filed as an exhibit to the Company's Form 8-K dated August 13,
1998 and incorporated herein by reference.
(14) Previously filed as an exhibit to the Company's Form 10-K for the fiscal
year ended December 31, 1997 and incorporated herein by reference.
(15) Previously filed as an exhibit to the Company's Form 8-K dated March 23,
2001 and incorporated herein by reference.
** Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
During the fourth quarter of the year ended December 31, 2000, the
Company did not file any reports on Form 8-K. On March 23, 2001, the Company
filed a report on Form 8-K to report, under Item 5, a pending acquisition.
-37-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
-------------------------------------
Gerard H. Sweeney
President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
[Enlarge/Download Table]
Signature Title Date
--------- ----- ----
/s/ Anthony A. Nichols, Sr. Chairman of the Board and Trustee March 30, 2001
-------------------------------
Anthony A. Nichols, Sr.
/s/ Gerard H. Sweeney President, Chief Executive Officer and Trustee March 30, 2001
------------------------------- (Principal Executive Officer)
Gerard H. Sweeney
/s/ Jeffrey F. Rogatz Senior Vice President and Chief Financial March 30, 2001
------------------------------- Officer (Principal Financial Officer)
Jeffrey F. Rogatz
/s/ Bradley W. Harris Vice President and Chief Accounting Officer March 30, 2001
------------------------------- (Principal Accounting Officer)
Bradley W. Harris
/s/ Warren V. Musser Trustee March 30, 2001
-------------------------------
Warren V. Musser
/s/ Walter D'Alessio Trustee March 30, 2001
-------------------------------
Walter D'Alessio
/s/ Charles P. Pizzi Trustee March 30, 2001
-------------------------------
Charles P. Pizzi
/s/ Donald E. Axinn Trustee March 30, 2001
-------------------------------
Donald E. Axinn
/s/ Robert C. Larson Trustee March 30, 2001
-------------------------------
Robert C. Larson
/s/ D. Pike Aloian Trustee March 30, 2001
-------------------------------
D. Pike Aloian
-38-
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Brandywine Realty Trust:
We have audited the consolidated balance sheets of Brandywine Realty Trust (a
Maryland real estate investment trust) and subsidiaries as of December 31, 2000
and 1999, and the related consolidated statements of operations, beneficiaries'
equity and cash flows for each of the three years for the period ended December
31, 2000. These financial statements and the schedules referred to below are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brandywine Realty Trust and
subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years for the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedules listed in the index to financial
statements and schedules in Item 14 are presented for purposes of complying with
the Securities and Exchange Commission's rules and are not a required part of
the basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and
in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
March 1, 2001
F-1
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except number of shares)
[Enlarge/Download Table]
December 31,
----------------------------
2000 1999
----------- -----------
ASSETS
Real estate investments:
Operating properties $ 1,754,895 $ 1,771,475
Accumulated depreciation (179,558) (125,744)
----------- -----------
1,575,337 1,645,731
Construction-in-progress 54,311 24,742
Land held for development 44,693 31,880
----------- -----------
1,674,341 1,702,353
Cash and cash equivalents 16,040 5,692
Escrowed cash 14,788 10,814
Accounts receivable, net 7,322 9,249
Accrued rent receivable, net 21,221 16,644
Due from affiliates 5,781 7,361
Investment in management company, at equity 392 228
Investment in real estate ventures, at equity 33,566 35,682
Deferred costs, net 19,828 17,960
Other assets 32,161 23,933
----------- -----------
Total assets $ 1,825,440 $ 1,829,916
=========== ===========
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable $ 527,877 $ 462,809
Borrowings under Credit Facility 338,325 376,825
Accounts payable and accrued expenses 20,099 17,596
Distributions payable 20,428 18,982
Tenant security deposits and deferred rents 17,232 18,871
----------- -----------
Total liabilities 923,961 895,083
Minority interest 144,974 145,941
Commitments and contingencies
Beneficiaries' equity:
Preferred Shares of beneficial interest, (shares authorized-10,000,000):
7.25% Series A Preferred Shares, $0.01 par value;
issued and outstanding-750,000 in 2000 and 1999 8 8
8.75% Series B Preferred Shares, $0.01 par value;
issued and outstanding-4,375,000 in 2000 and 1999 44 44
Common Shares of beneficial interest, $0.01 par value;
shares authorized-100,000,000; issued and
outstanding-35,681,314 in 2000 and 36,372,590 in 1999 357 364
Additional paid-in capital 851,875 863,962
Share warrants 908 908
Cumulative earnings 131,256 79,384
Accumulated other comprehensive loss (1,731) -
Cumulative distributions (226,212) (155,778)
----------- -----------
Total beneficiaries' equity 756,505 788,892
----------- -----------
Total liabilities and beneficiaries' equity $ 1,825,440 $ 1,829,916
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-2
BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
[Enlarge/Download Table]
Year ended December 31,
---------------------------------------------
2000 1999 1998
---------- --------- ----------
Revenue:
Rents $ 245,460 $ 240,979 $ 163,865
Tenant reimbursements 34,506 35,270 24,140
Other 7,118 6,971 4,856
--------- --------- ---------
Total revenue 287,084 283,220 192,861
Operating Expenses:
Property operating expenses 65,597 64,586 44,459
Real estate taxes 26,200 25,497 16,365
Interest 64,746 69,800 36,886
Depreciation and amortization 67,012 69,313 48,002
Management fees 12,123 11,998 6,922
Administrative expenses 4,249 3,598 3,199
--------- --------- ---------
Total operating expenses 239,927 244,792 155,833
--------- --------- ---------
Income before equity in income of management company, equity in income of real
estate ventures, net gains on sales, minority interest
and extraordinary items 47,157 38,428 37,028
Equity in income of management company 164 80 74
Equity in income of real estate ventures 2,797 979 144
--------- --------- ---------
Income before net gains on sales, minority interest
and extraordinary items 50,118 39,487 37,246
Net gains on sales of interests in real estate 11,638 3,115 209
--------- --------- ---------
Income before minority interest and extraordinary items 61,756 42,602 37,455
Minority interest (9,598) (7,996) (2,427)
--------- --------- ---------
Income before extraordinary items 52,158 34,606 35,028
Extraordinary items - - (2,003)
--------- --------- ---------
Net income 52,158 34,606 33,025
Income allocated to Preferred Shares (11,906) (4,790) (702)
--------- --------- ---------
Income allocated to Common Shares $ 40,252 $ 29,816 $ 32,323
========= ========= =========
Earnings per Common Share before extraordinary item:
Basic $ 1.12 $ 0.80 $ 0.95
========= ========= =========
Diluted $ 1.12 $ 0.80 $ 0.95
========= ========= =========
Earnings per Common Share after extraordinary item:
Basic $ 1.12 $ 0.80 $ 0.90
========= ========= =========
Diluted $ 1.12 $ 0.80 $ 0.89
========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-3
BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF BENEFICIARIES' EQUITY
For the years ended December 31, 2000, 1999 and 1998
(in thousands, except number of shares)
[Enlarge/Download Table]
Number of Par Value of Number of Par Value of Number of
Preferred A Preferred A Preferred B Preferred B Common
Shares Shares Shares Shares Shares
----------- ------------ ----------- ------------ ---------
BALANCE, January 1, 1998 - $ - - $ - 24,087,315
Net income - - -
Issuance of Preferred Shares 750,000 8 -
Issuance of Common Shares - - 13,572,810
Repurchase of Common Shares - - (86,744)
Preferred Share distributions - - -
Distributions ($1.52 per share) - - - - -
------- --- --------- ---- ----------
BALANCE, December 31, 1998 750,000 8 - - 37,573,381
Net income - - -
Vesting of Restricted Stock - - 143,504
Issuance of Preferred Shares 4,375,000 44
Repurchase of Common Shares - - (1,344,295)
Expiration of Common Share warrants - - -
Preferred Share distributions - - -
Distributions ($1.57 per share) - - - - -
------- --- --------- ---- ----------
BALANCE, December 31, 1999 750,000 8 4,375,000 44 36,372,590
Net income
Unrealized loss on available-for-sale
securities
Comprehensive income
Vesting of Restricted Stock - - 106,453
Repurchase of Common Shares - - (957,729)
Executive stock loans used to
purchase Common Shares 160,000
Accretion of Preferred Share discount
Preferred Share distributions - - -
Distributions ($1.62 per share) - - - - -
------- --- --------- ---- ----------
BALANCE, December 31, 2000 750,000 $ 8 4,375,000 $ 44 35,681,314
======= === ========= ==== ==========
[Enlarge/Download Table]
Accumulated
Par Value of Other
Common Additional Paid Executive Share Cumulative Comprehensive
Shares in Capital Stock Loans Warrants Earnings Income
------------ --------------- ----------- -------- ---------- -------------
BALANCE, January 1, 1998 $ 241 $ 446,054 $ - $ 962 $ 11,753 $ -
Net income - - - - 33,025
Issuance of Preferred Shares - 37,492 - - -
Issuance of Common Shares 136 307,491 - - -
Repurchase of Common Shares (1) (1,656) - - -
Preferred Share distributions - - - -
Distributions ($1.52 per share) - - - - - -
----- --------- ------- ----- -------- - --------
BALANCE, December 31, 1998 376 789,381 - 962 44,778 -
Net income - - - - 34,606
Vesting of Restricted Stock 1 1,894 - - -
Issuance of Preferred Shares 94,797
Repurchase of Common Shares (13) (22,164) - - -
Expiration of Common Share warrants - 54 - (54) -
Preferred Share distributions - - - -
Distributions ($1.57 per share) - - - - - -
----- --------- ------- ----- -------- - --------
BALANCE, December 31, 1999 364 863,962 - 908 79,384 -
Net income 52,158
Unrealized loss on available-for-sale
securities (1,731)
Comprehensive income
Vesting of Restricted Stock - 2,897 - - -
Repurchase of Common Shares (9) (15,268) - - -
Executive stock loans used to
purchase Common Shares 2 2,498 (2,500)
Accretion of Preferred Share discount 286 (286)
Preferred Share distributions - - - - -
Distributions ($1.62 per share) - - - - - -
----- --------- ------- ----- -------- --------
BALANCE, December 31, 2000 $ 357 $ 854,375 $(2,500) $ 908 $ 131,256 $ (1,731)
===== ========= ======= ===== ========= ========
[Download Table]
Cumulative
Distributions Total
------------- ---------
BALANCE, January 1, 1998 $ (33,482) $ 425,528
Net income - 33,025
Issuance of Preferred Shares - 37,500
Issuance of Common Shares - 307,627
Repurchase of Common Shares - (1,657)
Preferred Share distributions (702) (702)
Distributions ($1.52 per share) (57,667) (57,667)
---------- ---------
BALANCE, December 31, 1998 (91,851) 743,654
Net income - 34,606
Vesting of Restricted Stock - 1,895
Issuance of Preferred Shares 94,841
Repurchase of Common Shares - (22,177)
Expiration of Common Share warrants - -
Preferred Share distributions (4,790) (4,790)
Distributions ($1.57 per share) (59,137) (59,137)
---------- ---------
BALANCE, December 31, 1999 (155,778) 788,892
Net income 52,158
Unrealized loss on available-for-sale
securities (1,731)
Comprehensive income 50,427
Vesting of Restricted Stock - 2,897
Repurchase of Common Shares - (15,277)
Executive stock loans used to
purchase Common Shares -
Accretion of Preferred Share discount -
Preferred Share distributions (11,906) (11,906)
Distributions ($1.62 per share) (58,528) (58,528)
---------- ---------
BALANCE, December 31, 2000 $ (226,212) $ 756,505
========== =========
The accompanying notes are an intergral part of these financial statements.
F-4
BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
[Enlarge/Download Table]
Year ended December 31,
-----------------------------------------------------
2000 1999 1998
-------- -------- ---------
Cash flows from operating activities:
Net income $ 52,158 $ 34,606 $ 33,025
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation 64,041 66,493 45,304
Amortization:
Deferred financing costs 3,478 3,303 229
Deferred leasing costs 2,971 2,820 2,698
Deferred compensation costs 2,685 1,758 1,488
Straight line rental income (6,396) (8,100) (6,300)
Provision for doubtful accounts 332 1,034 2,710
Equity in income of management company (164) (80) (74)
Equity in income of real estate ventures,
net of cash distributions received (354) - -
Issuance of shares to trustees 65 67 29
Net gain on sales of interests in real estate (11,638) (3,115) (209)
Minority interest 9,598 7,996 2,427
Distributions paid to minority partners (10,543) (9,158) (981)
Extraordinary items - - 2,003
Changes in assets and liabilities:
Accounts receivable 3,414 (8,058) (3,490)
Due from affiliates 1,580 (1,887) (5,260)
Other assets (10,060) (19,194) (14,775)
Accounts payable and accrued expenses 2,715 5,167 7,704
Tenant security deposits and deferred rents (1,639) 6,748 6,588
-------- -------- --------
Net cash from operating activites 102,243 80,400 73,116
Cash flows from investing activities:
Acquisition of properties (7,010) (20,000) (878,484)
Sales of properties 101,075 147,700 14,704
Capital expenditures (113,137) (23,547) (20,184)
Investment in real estate ventures (2,748) (21,059) (10,158)
Increase in escrowed cash (3,974) (7,325) (3,277)
Cash distributions from real estate ventures - 692 323
Leasing costs (6,578) (7,266) (6,117)
-------- -------- --------
Net cash from investing activities (32,372) 69,195 (903,193)
Cash flows from financing activites:
Proceeds from notes payable, Credit Facility 71,000 67,000 1,374,467
Repayment of notes payable, Credit Facility (109,500) (371,500) (808,375)
Proceeds from mortgage notes payable 107,397 203,415 19,277
Repayment of mortgage notes payable (42,412) (60,003) (14,669)
Debt financing costs (1,656) (5,868) (4,916)
Proceeds from issuance of shares, net - 95,366 301,023
Repurchases of Common Shares (15,342) (22,244) (1,657)
Distributions paid to shareholders (69,010) (63,144) (51,440)
-------- -------- --------
Net cash from financing activities (59,523) (156,978) 813,710
-------- -------- --------
Increase (decrease) in cash and cash equivalents 10,348 (7,383) (16,367)
Cash and cash equivalents at beginning of year 5,692 13,075 29,442
-------- -------- --------
Cash and cash equivalents at end of year $ 16,040 $ 5,692 $ 13,075
========= ======== ========
The accompanying notes are an integral part of these financial statements.
F-5
BRANDYWINE REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
1. ORGANIZATION AND NATURE OF OPERATIONS
Brandywine Realty Trust, a Maryland Real Estate Investment Trust (collectively
with its subsidiaries, the "Company"), is a self-administered and self-managed
real estate investment trust (a "REIT") active in acquiring, developing,
redeveloping, leasing and managing office and industrial properties. As of
December 31, 2000, the Company's portfolio included 197 office properties, 52
industrial facilities and one mixed-use property (collectively, the
"Properties") that contained an aggregate of approximately 16.5 million net
rentable square feet. The Properties are located in the office and industrial
markets surrounding Philadelphia, Pennsylvania, New Jersey and Long Island, New
York and Richmond, Virginia. As of December 31, 2000, the Company also held
economic interests in thirteen real estate ventures (the "Real Estate
Ventures").
The Company's interest in its assets is held through Brandywine Operating
Partnership, L.P., a Delaware limited partnership (the "Operating Partnership").
The Company is the sole general partner of the Operating Partnership and, as of
December 31, 2000, was entitled to approximately 94.3% of the Operating
Partnership's distributions after distributions to holders of Series B Preferred
Units (as defined in Note 3 below). As of December 31, 2000, the Operating
Partnership held a 95% economic interest in Brandywine Realty Services
Corporation, a Pennsylvania corporation (the "Management Company"), through its
ownership of 100% of the Management Company's non-voting preferred stock and 5%
of its voting common stock. As of December 31, 2000, the Management Company was
managing properties containing an aggregate of approximately 20.3 million net
rentable square feet, of which 16.3 million net rentable square feet related to
properties owned by the Company and approximately 4.0 million net rentable
square feet related to properties owned by unaffiliated third parties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
the Operating Partnership. The portion of the Operating Partnership not owned by
the Company is presented as minority interest. Intercompany accounts and
transactions have been eliminated. Certain amounts reported in prior years have
been reclassified for comparative purposes.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Real Estate Investments
Real estate investments are carried at cost. Depreciation is computed using the
straight-line method based on the following useful lives: buildings and
improvements (25 to 35 years) and tenant improvements over the shorter of the
lease term or the life of the asset. Direct construction costs totaling $1.8
million in 2000, $882,000 in 1999 and $598,000 in 1998 and interest totaling
$8.2 million in 2000, $2.1 million in 1999 and $1.2 million in 1998 were
capitalized related to the development of certain Properties and land holdings.
The Company expenses routine repair and maintenance expenditures.
Real estate investments will be reviewed for impairment if facts and
circumstances indicate that the carrying value of such assets may not be
recoverable. Measurement of any impairment loss will be based on the fair value
of the asset; generally, determined using valuation techniques, such as the
present value of expected future cash flows. No impairment adjustments have been
made as a result of this review process during 2000, 1999 and 1998.
F-6
Cash Equivalents
Cash equivalents are highly-liquid investments with original maturities of three
months or less. The Company maintains cash equivalents in financial institutions
in excess of insured limits.
Accounts Receivable
Accounts receivable and accrued rent receivable are presented net of allowances
for doubtful accounts of $1.3 million and $1.1 million in 2000 and $2.9 million
and $0.5 million in 1999. As of December 31, 2000 and 1999, no tenant represents
more than 10% of accounts receivable.
Other Assets
As of December 31, 2000, other assets included deposits on properties purchased
in January 2001 totaling $21.6 million, prepaid real estate taxes of $4.5
million, an investment in US RealTel, Inc. of $769,000 and other assets.
The Company accounts for its investments in equity securities according to the
provisions of Statement of Financial Accounting Standards No. 115 ("SFAS 115"),
Accounting for Certain Investments in Debt and Equity Securities, which requires
securities classified as "available-for-sale" to be stated at fair value.
Adjustments to fair value of available-for-sale securities are recorded as a
component of other comprehensive income in beneficiaries' equity.
Management Company
The Company's investment in the Management Company is accounted for using the
equity method. The Management Company provides management, leasing,
construction, development, redevelopment and other real estate related services
for the Company's Properties and for third parties. (See Note 5 below.)
Deferred Costs
Certain expenditures related to the financing and leasing of the Properties are
capitalized. Capitalized financing fees are amortized over the related loan term
and capitalized leasing costs are amortized over the related lease term.
Accumulated amortization related to these costs was $13.1 million in 2000 and
$9.7 million in 1999. Deferred costs include internal direct leasing costs
totaling $2.5 million in 2000 and $.9 million in 1999.
Fair Value of Financial Instruments
Carrying amounts reported in the balance sheet for cash, accounts receivable,
other assets, accounts payable and accrued expenses, and borrowings under the
Credit Facility approximate fair value due to the nature of these instruments.
Accordingly, these items have been excluded from the fair value disclosures.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the lease term
regardless of when payments are due. The straight-line rent adjustment increased
revenue by approximately $6.4 million in 2000, $8.1 million in 1999 and $6.3
million in 1998. Certain lease agreements contain provisions that require
tenants to reimburse a pro rata share of real estate taxes and certain common
area maintenance costs.
No tenant represented 10% or more of the Company's rental revenue in 2000, 1999
or 1998.
Income Taxes
The Company elects to be taxed as a real estate investment trust under Sections
856-860 of the Internal Revenue Code. In management's opinion, the requirements
to maintain this election are being met. Accordingly, no provision for Federal
income taxes has been reflected in the financial statements.
Earnings and profits, which determine the taxability of distributions to
shareholders, differ from net income reported for financial reporting purposes
due to differences in cost basis, the estimated useful lives used to compute
depreciation, and the allocation of net income and loss for financial versus tax
reporting purposes.
The Company is subject to a 4% Federal excise tax, if sufficient taxable income
is not distributed within prescribed time limits. The excise tax equals 4% of
the annual amount, if any, by which the sum of (a) 85% of the Company's ordinary
income and (b) 95% of the Company's net capital gain exceeds cash distributions
and certain taxes paid by the Company. No excise tax was incurred in 2000, 1999,
or 1998.
F-7
The Management Company is subject to Federal and state income taxes. The
operating results of the Management Company include a provision for income taxes
of $115,000 in 2000, $57,000 in 1999 and $83,000 in 1998.
Earnings Per Share
Basic earnings per share is calculated by dividing income applicable to Common
Shares by the weighted-average number of shares outstanding during the period.
Diluted earnings per share includes the effect of common share equivalents
outstanding during the period.
Stock-Based Compensation Plans
The Company follows Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, in accounting for stock-based compensation plans and
discloses the fair value of options granted and pro forma earnings as permitted
by Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation.
Comprehensive Income
Comprehensive income for the year ended December 31, 2000 includes unrealized
gains and losses on available-for-sale securities. Net income as reported by the
Company reflects total comprehensive income for the years ended December 31,
1999 and 1998.
New Pronouncements
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS 133 establishes accounting and
reporting standards for the recognition and measurement of derivative
instruments and hedging activities. The Company adopted this statement effective
January 1, 2001 and recorded a charge of $1.3 million to comprehensive income
for the cumulative effect of an accounting change to recognize at fair value all
derivatives that are designated as cash flow hedging instruments. Management
believes their hedges are highly effective with changes in effectiveness
expected to be reported in other comprehensive income. The impact of any
ineffective hedges will be reported in current earnings.
3. MINORITY INTEREST
Income allocated to the Minority Interest is based on the percentage ownership
of the Operating Partnership held by third parties throughout the year. Minority
interest is comprised of Class A Units of limited partnership interest ("Class A
Units") and Series B Preferred Units of limited partnership interest ("Series B
Preferred Units"). The Operating Partnership issued these interests to persons
that contributed assets to the Operating Partnership. The Operating Partnership
is obligated to redeem, at the request of a holder, each Class A Unit for cash
or one Common Share, at the option of the Company. Each Series B Preferred Unit
has a stated value of $50.00 and is convertible, at the option of the holder,
into Class A Units at a conversion price of $28.00. The conversion price
declines to $26.50, if the average trading price of the Common Shares during the
60-day period ending December 31, 2003 is $23.00 or less. The Series B Preferred
Units bear a preferred distribution of 7.25% per annum, subject to an increase
in the event quarterly distributions paid to holders of Common Shares exceed
$0.51 per share. The Company declared distributions of $7.1 million in 2000,
$6.1 million in 1999 and $1.5 million in 1998 to the holders of Series B
Preferred Units and $3.5 million in 2000, $3.4 million in 1999 and $1.6 million
in 1998 to holders of Class A Units. As of December 31, 2000 and 1999, there
were 2,156,150 Class A Units and 1,950,000 Series B Preferred Units held by
third party investors.
4. ACQUISITIONS AND DISPOSITIONS OF REAL ESTATE INVESTMENTS
The Company's acquisitions were accounted for by the purchase method. The
results of each acquired property are included in the Company's results of
operations from their respective purchase dates.
2000
During 2000, the Company sold seven office properties, containing 630,000 net
rentable square feet, and two parcels of land, containing 5.0 acres, for $101.1
million, realizing a net gain of $11.6 million. Four of the properties were sold
for $72.1 million realizing an aggregate gain of $15.8 million, three of the
properties were sold for $27.8 million realizing an aggregate loss of $5.1
million, and two land parcels were sold for $1.2 million realizing an aggregate
gain of $.9 million. In addition, the Company purchased 36.0 acres of land for
$7.0 million.
F-8
The results of operations on a pro forma basis on the above acquisitions and
dispositions are not material.
1999
During 1999, the Company sold 27 properties (seven office properties and 20
industrial facilities), containing 2.6 million net rentable square feet, for
$147.7 million, realizing a net gain of $3.1 million, and acquired six
properties (five office properties and one industrial facility), containing
463,000 net rentable square feet, for $42.0 million. The purchase price of these
properties was satisfied with cash of $20.0 million, the issuance of 83,333
Class A Units valued at $2.0 million ($24 per unit), and the issuance of 400,000
Series B Preferred Units valued at $20.0 million ($50 per unit).
The results of operations on a pro forma basis on the above acquisitions and
dispositions were not material.
1998
During 1998, the Company purchased 153 office, industrial and mixed-use
properties, containing 11.6 million net rentable square feet, for $1.3 billion.
The purchase price was satisfied with cash of $848.8 million, debt assumption of
$265.5 million, the issuance of 1,754,763 Class A Units valued at $41.0 million,
the issuance of 1,550,000 Series B Preferred Units with a stated value of $77.5
million; and the issuance of 750,000 Series A Preferred Shares (the "Series A
Preferred Shares") with a stated value of $37.5 million. The Company also sold
one office property, containing 156,000 net rentable square feet, for $14.7
million, resulting in a gain of $209,000.
All pro forma financial information presented herein is unaudited and not
necessarily indicative of the results that would have occurred if the
acquisitions had been consummated on the respective dates indicated, nor does
the pro forma information purport to represent the results of operations for
future periods.
The following unaudited pro forma financial information of the Company for the
year ended December 31, 1998 gives effect to the properties acquired and the
Common Share, Class A Unit, Series B Preferred Unit and Series A Preferred Share
issuances during 1998 as if the purchases and issuances occurred on January 1,
1998.
[Enlarge/Download Table]
Year Ended
December 31, 1998
----------------------------
(unaudited and in thousands,
except per share data)
Pro forma total revenues $ 266,462
Pro forma net income before extraordinary items allocated to Common Shares 25,272
Pro forma net income after extraordinary items allocated to Common Shares 23,269
Pro forma net income per Common Share before extraordinary items (diluted) $ 0.67
Pro forma net income per Common Share after extraordinary items (diluted) $ 0.62
5. MANAGEMENT COMPANY
Management fees paid by the Properties to the Management Company amounted to
$11.9 million in 2000, $11.3 million in 1999, and $6.9 million in 1998. The
Management Company also receives reimbursement of certain costs attributable to
the operations of the Properties. These costs, included in property operating
expenses, amounted to $9.2 million in 2000, $7.3 million in 1999, and $5.3
million in 1998. Summarized unaudited financial information for the Management
Company as of and for the years ended December 31, 2000, 1999 and 1998 is as
follows:
F-9
2000 1999 1998
------- ------- -------
(unaudited and in thousands)
Total assets $ 3,248 $ 3,659 $ 1,763
Total revenue 26,190 22,103 13,011
Net income 173 85 77
Company's share of net income 164 80 74
Effective January 2, 2001, the Operating Partnership acquired the remaining
shares of capital stock of the Management Company formerly owned by two
executives of the Company for approximately $30,000. The Management Company will
be consolidated for financial reporting purposes and became a taxable REIT
subsidiary for tax purposes in 2001.
6. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES
The Company accounts for its non-controlling interests in Real Estate Ventures
using the equity method. Non-controlling ownership interests generally range
from 15% to 65%, subject to specified priority allocations in certain real
estate ventures. These investments, initially recorded at cost, are subsequently
adjusted for the Company's net equity in ventures' income or loss and cash
contributions and distributions. The Company's investment in Real Estate
Ventures is as follows (in thousands):
[Enlarge/Download Table]
Real Estate Company's Share
Ownership Carrying Venture of Real Estate
Percentage (1) Amount Debt at 100% Venture Income
--------------- ---------- ------------ -----------------
Two Tower Bridge Associates 35% $ 2,427 $ 7,844 $ 415
Four Tower Bridge Associates 65% 4,936 11,000 598
Five Tower Bridge Associates (2) 15% - 28,023 -
Six Tower Bridge Associates 65% 1,977 16,500 505
Tower Bridge Inn Associates 50% 2,652 3,852 -
Christiana Center Operating Company I, LLC 50% 2,058 12,786 252
Christiana Center Operating Company II, LLC 50% 299 6,186 21
Christiana Center Operating Company III, LLC 50% 418 - -
Interstate 202, G.P. 50% 962 5,774 182
Brandywine Tysons International Partners (3) 25% 11,745 61,500 240
1000 Chesterbrook Boulevard Partnership 50% 5,994 24,182 584
PJP Building Two, LC 30% 60 3,839 -
PJP Building Five, LC 25% 38 - -
-------- --------- -------
$ 33,566 $ 181,486 $ 2,797
======== ======== =======
(1) Ownership percentage represents the Company's entitlement to residual
distributions after payment by the applicable venture of priority returns.
(2) This percentage gives effect to the dilution that will occur upon funding
by a third party of an equity commitment that will be used to repay a
construction loan upon maturity of the loan in 2001.
(3) The other partner in Brandywine Tysons International Partners has an option
to exchange its partnership interest for Common Shares after December 31,
2004. Upon consummation of the transaction discussed in Note 18 below, the
Company's interest in this partnership will be contributed to Prentiss and
the exchange option will be terminated.
(4) As of December 31, 2000, the Company had guaranteed repayment of
approximately $16.5 million of loans for the Real Estate Ventures. The
Company selectively provides completion guaranties on behalf of Real Estate
Ventures as part of their development activities. As of December 31, 2000,
the Company had provided completion guaranties relating to the construction
of three development projects, two of which were substantially completed
during the first quarter of 2001, the other expected to be completed during
the fourth quarter of 2001.
7. INDEBTEDNESS
The Company utilizes credit facility borrowings for general business purposes,
including the acquisition of properties and the repayment of debt. At December
31, 2000, the Company had a $450.0 million unsecured credit facility (the
"Credit Facility") that matures in September 2001, which can be extended through
September 2002 upon payment of a fee. This debt will either be refinanced or
extended. The Credit Facility bears interest at LIBOR (LIBOR was 6.71% at
December 31, 2000) plus 1.5%, with the spread over LIBOR subject to reductions
from .125% to .35% based on the Company's leverage. As of December 31, 2000, the
Company had $338.3 million of borrowings and $15.1 million of letters-of-credit
F-10
outstanding and $96.6 million of unused availability under the Credit Facility.
The weighted-average interest rate on the Company's unsecured credit facilities
was 7.84% in 2000, 6.95% in 1999, and 7.05% in 1998.
As of December 31, 2000, the Company had $527.9 million of mortgage notes
payable secured by 104 of the Properties and certain land holdings. Fixed rate
mortgages, totaling $401.5 million, require payments of principal and/or
interest (or imputed interest) at rates ranging from 7.18% to 9.88% and mature
or matured at various dates from January 2001 through July 2027. Non-interest
bearing mortgage loans (included with the fixed rate mortgages), totaling $1.3
million in 2000 and $2.5 million in 1999 with interest imputed at 8.0%, have
unamortized discounts of $35,000 in 2000 and $118,000 in 1999. Discount
amortization aggregated $83,000 in 2000, $162,000 in 1999, and $234,000 in 1998.
Variable rate mortgages, totaling $126.4 million, require payments of principal
and/or interest at rates ranging from LIBOR plus .76% to 2.25% or 75% of prime
(the prime rate was 9.50% at December 31, 2000) and mature at various dates from
January 2001 through July 2027. The weighted-average interest rate on the
Company's mortgages was 7.92% in 2000, 7.1% in 1999, and 7.6% in 1998.
The Company has entered into interest rate swap and rate cap agreements designed
to reduce the impact of interest rates changes on its variable rate debt. At
December 31, 2000, the Company had two interest rate swap agreements for
notional principal amounts aggregating $150 million. The swap agreements
effectively fix the interest rate on $50 million of Credit Facility borrowings
at 6.08% and on $100 million at 6.383% until September 2002. The interest rate
caps effectively fix the interest rate on two variable rate mortgages. One rate
cap fixes the interest rate on a mortgage with a notional value of $75 million
at 6.25% until April 2001 and then at 7% until maturity in April 2002. The
second interest rate cap fixes the interest rate on a mortgage with a notional
value of $28 million at 8.7% until July 2004. The impact of the cap agreements
is recorded as a component of interest expense. As of December 31, 2000, the
fair value of the interest rate swap agreements, based on quotes from an
independent third party, was $1.3 million and represents the estimated amount
that the Company would pay if the contracts were terminated.
Aggregate principal payments on mortgage notes payable at December 31, 2000 are
due as follows (in thousands):
2001 $ 43,625
2002 89,030
2003 37,976
2004 119,285
2005 3,778
2006 and thereafter 234,183
---------
$ 527,877
=========
The Credit Facility requires the maintenance as of certain ratios related to
minimum net worth, debt-to-total capitalization and fixed charge coverage. As of
December 31, 2000, the Company was in compliance with all debt covenants. The
Company paid interest totaling $67.7 million in 2000, $67.3 million in 1999, and
$35.0 million in 1998. As of December 31, 2000, the carrying value of the
Company's debt exceeded fair market value by approximately $11.4 million, as
determined by using year-end interest rates and market conditions. During 1998,
the Company wrote-off $2.0 million of unamortized deferred financing costs
accounted for as an extraordinary item.
8. PREFERRED SHARES AND BENEFICIARIES' EQUITY
In 1998, the Company issued $37.5 million of convertible preferred securities
with a 7.25% coupon rate (the Series A Preferred Shares). The Series A Preferred
Shares, with a stated value of $50.00, are convertible into Common Shares, at
the option of the holder, at a conversion price of $28.00. The conversion price
declines to $26.50, if the trading price of the Common Shares during the 60-day
period ending December 31, 2003 is $23.00 or less. The Series A Preferred Shares
distribution is subject to an increase, if quarterly distributions paid to
Common Share holders exceeds $0.51 per share. The Series A Preferred Shares are
perpetual and may be redeemed, at the Company's option, at par beginning in
January 2004 or earlier, if the market price of the Common Shares exceeds
specified levels.
In 1999, the Company issued $105.0 million of convertible preferred securities
(the Series B Preferred Shares) with an 8.75% coupon rate for net proceeds of
$94.8 million. The Company is accreting the discount as a charge to cumulative
earnings through the redemption date in 2007. The Series B Preferred Shares,
convertible into Common Shares at a conversion price of $24.00 per share, are
F-11
entitled to quarterly dividends equal to the greater of $0.525 per share or the
quarterly dividend on the number of Common Shares into which a Series B
Preferred Share is convertible. The Series B Preferred Shares are perpetual and
may be redeemed, at the Company's option, at par, beginning in April 2007. In
addition, the Company may require the conversion of the Series B Preferred
Shares into Common Shares starting in April 2004, if certain conditions are met,
including that the Common Shares are then trading in excess of 130% of the
conversion price. Upon certain changes in control of the Company, the holder may
require the Company to redeem its Series B Preferred Shares. However, the
Company has the ability and intent to cause the Series B Preferred Shares to be
converted into Common Shares rather than redeemed in such circumstances. In
addition, as part of the transaction, the Company issued the holder seven-year
warrants exercisable for 500,000 Common Shares at an exercise price of $24.00
per share.
The Company's Board of Trustees approved a share repurchase program authorizing
the Company to repurchase up to 3,000,000 of its outstanding Common Shares. No
time limit has been placed on the duration of the share repurchase program. The
Company repurchased 957,729 Common Shares for $15.3 million (average price of
$15.95 per share) in 2000, 1,344,295 Common Shares for $22.2 million in 1999
(average price of $16.69 per share) and 86,744 Common Shares for $1.7 million in
1998 (average price of $19.10 per share). As of December 31, 2000, the Company
has repurchased 2,388,768 under the program.
At December 31, 2000, 417,537 "restricted" Common Shares were held by certain
executives of the Company. The restricted shares, valued at $13.0 million at
issuance, are amortized over their respective vesting periods of four to eight
years. The Company recorded compensation expense of $2.0 million in 2000, $1.8
million in 1999 and $1.5 million in 1998 related to these shares.
9. SHARE PURCHASE OPTIONS AND WARRANTS
The Company maintains a plan that authorizes the issuance of incentive stock
options and non-qualified stock options to key employees to purchase five
million Common Shares of the Company. The terms and conditions of option awards
are determined by the Board of Trustees. Incentive stock options may not be
granted at exercise prices less than fair value of the stock at the time of
grant. Options granted by the Company generally vest over two to five years. All
options awarded by the Company to date are non-qualified stock options. Options
were granted at exercise prices ranging from 125% to 165% of fair market value
on the grant date in 1999 and 100% to 115% of fair market value on the grant
date in 1998. As of December 31, 2000, the Company has 1,994,585 shares
available for future issuance under the plan.
The following table summarizes option activity for the three years ended
December 31, 2000:
[Enlarge/Download Table]
Number Weighted-
of Shares Average Grant Price Range
Under Exercise ------------------------
Option Price From To
------------- ------------ ------------------------
Balance at January 1, 1998 290,000 $ 20.09 $ 6.21 $ 19.50
Granted - at fair market value 654,034 25.06 24.00 25.25
Granted - above fair market value 1,589,670 28.29 26.40 29.04
------------
Balance at December 31, 1998 2,533,704 25.51 6.21 29.04
Granted - above fair market value 250,763 27.51 25.25 29.04
Canceled (62,609) 27.93 25.25 29.04
------------
Balance at December 31, 1999 2,721,858 26.38 6.21 29.04
Exercised (5,000) 19.50 19.50 19.50
Canceled (93,144) 27.51 25.25 29.04
------------
Balance at December 31, 2000 2,623,714 26.36 6.21 29.04
============
F-12
Using the Black-Scholes option pricing model, the estimated weighted-average
fair value of stock options granted was $1.21 in 1999 and $2.12 in 1998.
Assumptions made in determining estimates of fair value include: risk-free
interest rates of 5.6% in 1999 and 5.8% in 1998, a volatility factor of .280 in
1999 and .187 in 1998, a dividend yield of 8.9% in 1999 and 6.8% in 1998, and a
weighted-average life expectancy of 10 years in 1999 and 1998.
The following table summarizes stock options outstanding as of December 31,
2000:
[Enlarge/Download Table]
Weighted-
Average Weighted- Weighted-
Range of Number of Remaining Average Number of Average
Exercise Options Contractual Exercise Options Exercise
Prices Outstanding Life Price Exercisable Price
------------------------------------ ------------- ------------ ----------- ------------
$6.21 to $14.31 46,667 3.6 years $ 12.00 46,667 $ 12.00
$19.50 238,333 1.6 19.50 238,333 19.50
$24.00 to $29.04 2,338,714 7.1 27.34 1,086,231 25.24
------------ ---------
$6.21 to $29.04 2,623,714 6.5 26.36 1,371,231 24.62
============ =========
The following table summarizes the pro forma effects assuming compensation cost
for such awards had been recorded based upon estimated fair values (in
thousands, except per share amounts):
Year ended December 31,
-------------------------------------------------
2000 1999 1998
-------------- -------------- -------------
Net income:
As reported $ 40,252 $ 29,816 $ 32,323
Pro forma 39,635 28,852 31,440
Earnings per common share:
As reported
Basic $ 1.12 $ 0.80 $ 0.90
Diluted $ 1.12 $ 0.80 $ 0.89
Pro forma
Basic $ 1.11 $ 0.77 $ 0.87
Diluted $ 1.11 $ 0.77 $ 0.87
Only options granted after December 31, 1994 are reflected in the calculations.
Therefore, the pro forma disclosures are not likely to be representative of
future pro forma amounts.
As of December 31, 2000, there are 838,772 warrants outstanding to purchase
Common Shares of the Company at exercise prices ranging from $19.50 to $25.50.
10. SEGMENT INFORMATION
The Company currently manages its portfolio within three segments: (1)
Pennsylvania, (2) New Jersey/New York and (3) Virginia. Corporate is responsible
for cash and investment management and certain other general support functions.
F-13
Segment information for the three years ended December 31, 2000, 1999 and 1998
is as follows (in thousands):
[Enlarge/Download Table]
New Jersey/
Pennsylvania New York Virginia Corporate Total
------------ ----------- --------- --------- ------------
2000:
Real estate investments, at cost $ 938,602 $ 605,521 $ 309,776 $ - $ 1,853,899
Investment in real estate ventures,
at equity - - - 33,566 33,566
Total revenue 144,943 100,362 39,539 2,240 287,084
Property operating expenses
and real estate taxes 45,198 33,611 11,611 1,377 91,797
Interest 7,581 13,012 2,177 41,976 64,746
Depreciation & amortization 32,157 24,472 10,282 101 67,012
1999:
Real estate investments, at cost $ 895,697 $ 627,441 $ 304,959 $ - $ 1,828,097
Investment in real estate ventures,
at equity - - - 35,682 35,682
Total revenue 142,427 98,507 39,562 2,724 283,220
Property operating expenses
and real estate taxes 44,347 34,065 11,671 - 90,083
Interest 6,861 11,318 2,495 49,126 69,800
Depreciation & amortization 34,610 25,328 9,375 - 69,313
1998:
Real estate investments, at cost $ 987,268 $ 607,434 $ 313,393 $ - $ 1,908,095
Investment in real estate ventures,
at equity - - - 15,315 15,315
Total revenue 110,368 69,271 10,607 2,615 192,861
Property operating expenses
and real estate taxes 33,359 25,080 2,385 - 60,824
Interest 1,335 3,258 833 31,460 36,886
Depreciation & amortization 26,894 17,598 2,726 784 48,002
11. NET INCOME PER COMMON SHARE
The following table details the number of shares and net income used to
calculated basic and diluted earnings per share for the three years ended
December 31, 2000 (in thousands, except per share amounts).
[Enlarge/Download Table]
For the year ended December 31,
----------------------------------------------------------------------
2000 1999
---------------------------------- ----------------------------------
Basic Diluted Basic Diluted
---------------- ---------------- ---------------- ----------------
Net income $ 52,158 $ 52,158 $ 34,606 $ 34,606
Preferred Share discount amortization (286) (286) - -
Income allocated to Preferred Shares (11,906) (11,906) (4,790) (4,790)
----------- ----------- ----------- -----------
Income available to common shareholders $ 39,966 $ 39,966 $ 29,816 $ 29,816
=========== =========== =========== ===========
Weighted-average shares outstanding 35,807,598 35,807,598 37,348,022 37,348,022
Options and warrants - 16,576 - 14,932
----------- ----------- ----------- -----------
Total weighted-average shares outstanding 35,807,598 35,824,174 37,348,022 37,362,954
=========== =========== =========== ===========
Earnings per share $ 1.12 $ 1.12 $ 0.80 $ 0.80
=========== =========== =========== ===========
For the year ended December 31,
-------------------------------
1998
-------------------------------
Basic Diluted
------------ -----------------
Net income $ 33,025 $ 33,025
Preferred Share discount amortization - -
Income allocated to Preferred Shares (702) (702)
----------- -----------
Income available to common shareholders $ 32,323 $ 32,323
=========== ===========
Weighted-average shares outstanding 36,073,773 36,073,773
Options and warrants - 63,580
----------- -----------
Total weighted-average shares outstanding 36,073,773 36,137,353
=========== ===========
Earnings per share $ 0.90 $ 0.89
=========== ===========
F-14
Securities totaling 11,625,490 in 2000, 11,625,490 in 1999 and 6,497,993 in 1998
were excluded from the earnings per share computations above as their effect
would have been antidilutive.
12. DISTRIBUTIONS
[Enlarge/Download Table]
2000 1999 1998
------------- ------------ ----------
Common Share Distributions:
Ordinary income $ 1.38 $ 1.44 $ 1.52
Return of capital 0.24 0.13 0.00
------------- ----------- ---------
Total distributions per share $ 1.62 $ 1.57 $ 1.52
============= =========== =========
Percentage classified as ordinary income 85.2% 91.8% 100.0%
Percentage classified as return of capital 14.8% 8.2% 0.0%
Preferred Share Distributions:
Total distributions declared $ 11,906,000 $ 4,790,000 $ 702,000
13. RELATED-PARTY TRANSACTIONS
In 1998, the Board authorized the Company to make loans totaling $5.0 million
to enable employees of the Company to purchase Common Shares at fair market
value. The loans have five-year terms, are full recourse, and are secured by the
Common Shares purchased. Interest, payable quarterly, accrues on the loans at
the lower of the interest rate borne on borrowings under the Company's Credit
Facility or a rate based on the dividend payments on the Common Shares. As of
December 31, 2000, the interest rate was 8.12% per annum. The loans are payable
at the earlier of the stated maturity date or 90 days following the employee's
termination. As of December 31, 2000, the Company had funded loans of $4.3
million to employees secured by an aggregate of 249,164 Common Shares.
In December 1999, the Company purchased 384,615 shares of US Realtel, Inc.
("USR") Common Stock for $2.5 million and received warrants exercisable for
600,000 shares of USR Common Stock. The warrants have an exercise price of $8.00
per share and expire on December 31, 2004. The Company loaned USR $1.5 million
in 1999 and loaned an additional $1.9 million in 2000. The loans bore interest,
payable quarterly, at 12% per annum. In December 2000, the loan balance of $3.4
million and accrued interest were paid in full. In addition, as part of the
transaction, an officer of the Company was designated to a position on USR's
Board of Directors.
In February 2000, the Company loaned an aggregate of $2.5 million to two
executive officers to enable them to purchase Common Shares of the Company. The
loans have a four-year term and bear interest at the lower of the Company's cost
of funds or a rate based on the dividend payable on the Common Shares, but not
to exceed 10% annum. The loans are subject to forgiveness over a three-year
period, with the amount of forgiveness tied to the Company's total shareholder
return compared to the total shareholder return of peer group companies. The
loans are also subject to forgiveness in the event of a change of control of the
Company. Each executive may repay the loans at maturity by surrendering Common
Shares valued at the executive's initial per share purchase price of $15.625.
Due from affiliates includes $1.2 million in 2000 and $1.1 million in 1999
advanced by the Company to the Management Company for working capital.
14. OPERATING LEASES
The Company leases properties to tenants under operating leases with various
expiration dates extending to 2019. As of December 31, 2000, leases covering
approximately 2.8 million square feet or 17.0% of the net rentable square
footage were scheduled to expire during 2001. Minimum future rentals on
noncancelable leases at December 31, 2000 are as follows (in thousands):
F-15
Year Minimum Rent
------------------- ------------
2001 $ 229,499
2002 200,332
2003 166,747
2004 136,199
2005 103,619
2006 and thereafter 290,052
-----------
$ 1,126,448
===========
Total minimum future rentals presented above do not include amounts to be
received as tenant reimbursements for increases in certain operating costs.
15. EMPLOYEE BENEFIT PLAN
The Company sponsors a 401(k) defined contribution plan for its employees. Each
employee may contribute up to 18% of annual compensation. At its discretion, the
Company can make matching contributions equal to a percentage of the employee's
elective contribution and profit sharing contributions. Employees vest in
employer contributions over a five year service period. The Company
contributions were $690,000 in 2000, $331,000 in 1999 and $7,000 in 1998.
16. SUMMARY OF INTERIM RESULTS (UNAUDITED)
The following is a summary interim financial information as of and for the years
ended December 31, 2000 and 1999 (in thousands, except per share data):
[Enlarge/Download Table]
1st 2nd 3rd 4th
Quarter Quarter Quarter (b) Quarter (b)
------- ------- ----------- -----------
2000:
Total revenue $71,444 $ 72,153 $ 73,076 $ 70,411
Earnings before interest, depreciation and amortization (a) 45,786 46,469 46,912 45,394
Net income 10,590 10,799 19,845 10,924
Income allocated to Common Shares 7,613 7,822 16,868 7,949
Net income per Common Share:
Basic $ 0.21 $ 0.22 $ 0.47 $ 0.22
Diluted $ 0.21 $ 0.22 $ 0.47 $ 0.22
1999:
Total revenue $70,783 $ 71,672 $ 70,194 $ 70,571
Earnings before interest, depreciation and amortization (a) 45,780 46,316 45,457 45,729
Net income 7,198 7,833 11,064 8,511
Income allocated to Common Shares 6,518 6,763 9,619 6,916
Net income per Common Share:
Basic $ 0.17 $ 0.18 $ 0.26 $ 0.19
Diluted $ 0.17 $ 0.18 $ 0.26 $ 0.19
(a) Earnings before interest, depreciation and amortization, excludes gains or
losses on sale of real estate investments, minority interest, and
extraordinary items.
(b) The Company recorded gains on sales of properties of $9.5 million during
the 3rd quarter of 2000, $2.0 million during the 4th quarter of 2000 and
$3.5 million during the 3rd quarter of 1999.
The summation of quarterly earnings per share amounts do not necessarily equal
year to date amounts.
F-16
17. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is involved from time to time in litigation on various matters,
including disputes with tenants and disputes arising out of agreements to
purchase or sell properties. Given the nature of the Company's business
activities, these lawsuits are considered routine to the conduct of its
business. The result of any particular lawsuit cannot be predicted, because of
the very nature of litigation, the litigation process and its adversarial
nature, and the jury system.
The Company is a defendant in a case in which the plaintiffs allege that the
Company breached its obligation to purchase a portfolio of properties for
approximately $83.0 million. In July 1999, the Superior Court of New Jersey,
Camden County, dismissed the complaint against the Company with prejudice. The
plaintiffs subsequently filed a motion for reconsideration, which motion the
Superior Court denied. Plaintiffs then appealed to the Appellate Division, which
is the intermediate appellate level court in New Jersey. In December 2000, the
Appellate Division affirmed in part and reversed in part the Chancery Division's
earlier dismissal of the entire action. The Appellate Division affirmed the
dismissal of the fraud and other non-contractual counts in the Complaint, but
reversed the contract and reformation counts and remanded these to the lower
court for further proceedings. The Company sought review of this decision by the
Supreme Court of New Jersey, but in March 2001, that Court declined to consider
the appeal. The case will therefore return to the Chancery Division, where it is
expected to proceed through the discovery process. In management's opinion, this
proceeding will not have a material adverse effect on the Company's financial
position or results of operations.
In November 1999, a third-party complaint was filed in the Superior Court of New
Jersey, Burlington County by BRI OP Limited Partnership ("BRI OP") against the
Company as well as several other persons and entities, including against several
former affiliates of the Company, relative to Greentree Shopping Center located
in Marlton, NJ ("Subject Property"). The Subject Property was owned and managed
by a subsidiary of the Company between 1986 and 1988. BRI OP, also a former
owner of the Subject Property, has been sued by the present owner and manager of
the Subject Property, seeking indemnification and contribution for costs related
to the remediation of environmental contamination allegedly caused by a dry
cleaning business which was a tenant of the Subject Property. BRI OP, in turn,
brought a third-party action against the Company and others seeking
indemnification for environmental remediation and clean up costs for which it
may be held liable. This legal proceeding remains in the early stages of
discovery, as the plaintiff has yet to complete testing that would document its
alleged damages. However, the Company believes, based on its assessment of the
potential cost of any required remediation, the availability of other parties
that are potentially responsible for all or a portion of such cost, and defenses
that may be available to the Company, that this proceeding will not have a
material adverse effect on the Company's financial position or results of
operations.
Letters-of-Credit and Other Commitments
In connection with certain mortgages, the Company is required to maintain
leasing and capital reserve accounts with the mortgage lenders through
letters-of-credit which totaled $15.1 million at December 31, 2000. The Company
is also required to maintain escrow accounts for taxes, insurance and tenant
security deposits that amounted to $14.8 million at December 31, 2000. The
related tenant rents are deposited into the loan servicer's depository accounts,
which are used to fund debt service, operating expenses, capital expenditures
and the escrow and reserve accounts, as necessary. Any excess cash is included
in cash and cash equivalents.
As of December 31, 2000, the Company owned 477 acres of land for future
development and held options to purchase 89 additional acres.
18. SUBSEQUENT EVENTS (UNAUDITED)
In March, 2001, the Company announced an exchange of properties with Prentiss
Properties Acquisition Partners, L.P. ("Prentiss"). The Company has agreed to
acquire from Prentiss 30 properties (29 office and 1 industrial) containing
F-17
approximately 1.6 million net rentable square feet, a four-story 103,000 square
foot office building currently under construction and approximately 12.9 acres
of developable land for total consideration of approximately $220.0 million.
These properties are located in Pennsylvania, New Jersey and Delaware.
As part of the agreement to acquire these properties, the Company has agreed to
convey to Prentiss four office properties located in Northern Virginia that
contain an aggregate of approximately 657,000 net rentable square feet, to
assume approximately $79.8 million of mortgage debt secured by certain of the
Prentiss properties, to pay approximately $19.6 million at closing and to pay an
additional amount of approximately $15.4 million over a three year period
subsequent to closing.
The Company has separately agreed to contribute to Prentiss its interest in a
real estate venture that owns two additional office properties that contain an
aggregate of 451,650 net rentable square feet in exchange for a combination of
preferred and common units of limited partnership interest in Prentiss having an
approximate value of $10.65 million.
Consummation of the transaction with Prentiss is subject to customary closing
conditions, including receipt of third party consents and, in the case of the
property under construction and approximately six of the developable acres of
land, waiver by a third party of a purchase right. Accordingly, there is no
assurance that all or any part of the transaction will be consummated or that,
if consummated, the transaction would follow all of the terms contained in the
agreements with Prentiss.
During 2001, the Company purchased two office properties, containing 146,000 net
rentable square feet, for $18.0 million and one parcel of land, containing 20.0
acres, for $7.6 million. In addition, the Company sold one industrial property,
containing 16,000 net rentable square feet, for $785,000.
F-18
Brandywine Realty Trust
Schedule II
Valuation and Qualifying Accounts
(in thousands)
[Enlarge/Download Table]
Additions
Balance at -------------------- Balance
Beginning Charged to at End
Description of Period expense Deductions of Period
------------------------------------- --------------- -------------------- --------------- -----------------
Allowance for doubtful accounts:
Year ended December 31, 2000 $ 3,358 $ 332 $ 1,263 $ 2,427
======= ======= ======= =======
Year ended December 31, 1999 $ 3,172 $ 1,034 $ 848 $ 3,358
======= ======= ======= =======
Year ended December 31, 1998 $ 582 $ 2,710 $ 120 $ 3,172
======= ======= ======= =======
BRANDYWINE REALTY TRUST
Real Estate and Accumulated Depreciation - December 31, 2000
(in thousands)
[Enlarge/Download Table]
Initial Cost
--------------------------------------------
Net
Improvements
(Retirements)
Encumberances at Building and Since
Property Name City State December 31, 2000 Land Improvements Acquisition
------------------------------------- ---------------- ------ -------------------- ------------------------------ -------------
One Greentree Centre Marlton NJ 6,575 (c) 345 4,440 228
Two Greentree Centre Marlton NJ - (c) 264 4,693 133
Three Greentree Centre Marlton NJ - (c) 323 6,024 353
One Righter Parkway Talleyville DE - (i) 2,545 10,195 275
457 Haddonfield Road Cherry Hill NJ 8,725 2,142 9,120 1,847
168 Franklin Corner Drive Lawrenceville NJ - 398 1,597 215
8000 Lincoln Drive Marlton NJ - 606 2,887 770
7248 Tilghman Street Allentown PA - 731 2,969 78
6575 Snowdrift Road Allentown PA - 601 2,411 355
7310 Tilghman Street Allentown PA - 553 2,246 530
33 Street Road - Greenwood Square I Bensalem PA - 851 3,407 404
33 Street Road - Greenwood Square II Bensalem PA - 1,126 4,511 1,051
33 Street Road - Greenwood Square III Bensalem PA - 350 1,401 285
456 Creamery Way Exton PA - 635 2,548 -
110 Summit Drive Exton PA - 403 1,647 156
468 Creamery Way Exton PA - 527 2,112 (128)
486 Thomas Jones Way Exton PA - 806 3,256 356
650 Dresher Road Horsham PA - (f) 636 2,501 81
700 Business Center Drive Horsham PA - (f) 550 2,201 250
800 Business Center Drive Horsham PA - (f) 896 3,585 57
1155 Business Center Drive Horsham PA - (f) 1,029 4,124 (211)
One Progress Avenue Horsham PA - 1,399 5,629 127
500 Enterprise Road Horsham PA - 1,303 5,188 (180)
500 North Gulph Road King of Prussia PA - 1,303 5,201 496
2200 Cabot Boulevard Langhorne PA - 770 3,117 595
2260/70 Cabot Boulevard Langhorne PA - 415 1,661 133
3000 Cabot Boulevard Langhorne PA - 485 1,940 329
18 Campus Boulevard Newtown Square PA - 786 3,312 11
16 Campus Boulevard Newtown Square PA - 1,153 4,627 (130)
2240/50 Butler Pike Plymouth Meeting PA - 1,104 4,627 395
120 West Germantown Pike Plymouth Meeting PA - 685 2,773 126
140 West Germantown Pike Plymouth Meeting PA - 481 1,976 313
2260 Butler Pike Plymouth Meeting PA - 661 2,727 155
100 Commerce Drive Newark DE - 1,160 4,633 91
King & Harvard Cherry Hill NJ - 1,726 1,069 2,746
One South Union Place Cherry Hill NJ - 771 8,047 738
1 Foster Avenue Gibbsboro NJ - 93 364 8
2 Foster Avenue Gibbsboro NJ - 185 730 17
4 Foster Avenue Gibbsboro NJ - 183 726 76
5 Foster Avenue Gibbsboro NJ - 8 32 3
7 Foster Avenue Gibbsboro NJ - 231 921 12
10 Foster Avenue Gibbsboro NJ - 244 971 73
55 U.S. Avenue Gibbsboro NJ - 1,116 4,435 57
6 East Clementon Road Gibbsboro NJ - 1,345 5,366 300
20 East Clementon Road Gibbsboro NJ - 769 3,055 167
50 East Clementon Road Gibbsboro NJ - 114 964 2
5 U.S. Avenue Gibbsboro NJ - 21 81 3
1000 East Lincoln Drive Marlton NJ - 264 1,059 112
Two Eves Drive Marlton NJ - 818 3,461 90
Four A Eves Drive Marlton NJ - 539 2,168 191
Four B Eves Drive Marlton NJ - 588 2,369 97
Five Eves Drive Marlton NJ - 703 2,819 498
1000/2000 West Lincoln Drive Marlton NJ - 731 3,568 (428)
3000 West Lincoln Drive Marlton NJ - 569 2,293 156
4000/5000 West Lincoln Drive Marlton NJ - 877 3,526 217
9000 West Lincoln Drive Marlton NJ - 610 2,422 193
10000 Midlantic Drive Mt. Laurel NJ 116,190 (g) 3,206 12,857 461
4000 Midlantic Drive Mt. Laurel NJ - (i) 714 5,085 (1,981)
2000 Midlantic Drive Mt. Laurel NJ - (i) 2,202 8,823 355
[Enlarge/Download Table]
Gross Amount at Which Carried
December 31, 2000
---------------------------------------------------------
Accumulated
Depreciation at
Building and December 31, Date of
Property Name Land Improvements Total (a) 2000 (b) Construction
------------------------------------- ----------- -------------- ----------- -------------- -------------
One Greentree Centre 345 4,668 5,013 2,222 1982
Two Greentree Centre 264 4,826 5,090 2,810 1983
Three Greentree Centre 323 6,377 6,700 3,640 1984
One Righter Parkway 2,545 10,470 13,015 1,692 1989
457 Haddonfield Road 2,142 10,967 13,109 2,279 1990
168 Franklin Corner Drive 398 1,812 2,210 344 1976
8000 Lincoln Drive 606 3,657 4,263 1,186 1983
7248 Tilghman Street 731 3,047 3,778 664 1987
6575 Snowdrift Road 601 2,766 3,367 468 1988
7310 Tilghman Street 553 2,776 3,329 587 1985
33 Street Road - Greenwood Square I 851 3,811 4,662 780 1985
33 Street Road - Greenwood Square II 1,126 5,562 6,688 1,160 1985
33 Street Road - Greenwood Square III 350 1,686 2,036 409 1985
456 Creamery Way 635 2,548 3,183 504 1987
110 Summit Drive 403 1,803 2,206 402 1985
468 Creamery Way 527 1,984 2,511 346 1990
486 Thomas Jones Way 806 3,612 4,418 902 1990
650 Dresher Road 636 2,582 3,218 543 1984
700 Business Center Drive 550 2,451 3,001 483 1986
800 Business Center Drive 896 3,642 4,538 611 1986
1155 Business Center Drive 1,029 3,913 4,942 791 1990
One Progress Avenue 1,399 5,756 7,155 999 1986
500 Enterprise Road 1,303 5,008 6,311 1,459 1990
500 North Gulph Road 1,303 5,697 7,000 1,056 1979
2200 Cabot Boulevard 770 3,712 4,482 664 1985
2260/70 Cabot Boulevard 415 1,794 2,209 347 1984
3000 Cabot Boulevard 485 2,269 2,754 497 1986
18 Campus Boulevard 786 3,323 4,109 684 1990
16 Campus Boulevard 1,153 4,497 5,650 861 1990
2240/50 Butler Pike 1,104 5,022 6,126 1,123 1984
120 West Germantown Pike 685 2,899 3,584 602 1984
140 West Germantown Pike 481 2,289 2,770 467 1984
2260 Butler Pike 661 2,882 3,543 527 1984
100 Commerce Drive 1,160 4,724 5,884 643 1989
King & Harvard 1,726 3,815 5,541 948
One South Union Place 771 8,785 9,556 1,377
1 Foster Avenue 93 372 465 46 1972
2 Foster Avenue 185 747 932 94 1974
4 Foster Avenue 183 802 985 125 1974
5 Foster Avenue 8 35 43 4 1968
7 Foster Avenue 231 933 1,164 115 1983
10 Foster Avenue 244 1,044 1,288 133 1983
55 U.S. Avenue 1,116 4,492 5,608 567 1982
6 East Clementon Road 1,345 5,666 7,011 782 1980
20 East Clementon Road 769 3,222 3,991 429 1986
50 East Clementon Road 114 966 1,080 119 1986
5 U.S. Avenue 21 84 105 10 1987
1000 East Lincoln Drive 264 1,171 1,435 148 1981
Two Eves Drive 818 3,551 4,369 705 1987
Four A Eves Drive 539 2,359 2,898 395 1987
Four B Eves Drive 588 2,466 3,054 413 1987
Five Eves Drive 703 3,317 4,020 524 1986
1000/2000 West Lincoln Drive 731 3,140 3,871 559 1982
3000 West Lincoln Drive 569 2,449 3,018 388 1982
4000/5000 West Lincoln Drive 877 3,743 4,620 598 1982
9000 West Lincoln Drive 610 2,615 3,225 412 1983
10000 Midlantic Drive 3,206 13,318 16,524 2,120 1990
4000 Midlantic Drive 714 3,104 3,818 440 1981
2000 Midlantic Drive 2,202 9,178 11,380 1,352 1989
[Download Table]
Date Depreciable
Property Name Acquired Life
------------------------------------- ------------ -----------
One Greentree Centre 1986 25
Two Greentree Centre 1986 25
Three Greentree Centre 1986 25
One Righter Parkway 1996 25
457 Haddonfield Road 1996 31.5
168 Franklin Corner Drive 1996 25
8000 Lincoln Drive 1996 25
7248 Tilghman Street 1996 25
6575 Snowdrift Road 1996 25
7310 Tilghman Street 1996 25
33 Street Road - Greenwood Square I 1996 25
33 Street Road - Greenwood Square II 1996 25
33 Street Road - Greenwood Square III 1996 25
456 Creamery Way 1996 25
110 Summit Drive 1996 25
468 Creamery Way 1996 25
486 Thomas Jones Way 1996 25
650 Dresher Road 1996 25
700 Business Center Drive 1996 25
800 Business Center Drive 1996 25
1155 Business Center Drive 1996 25
One Progress Avenue 1996 25
500 Enterprise Road 1996 25
500 North Gulph Road 1996 25
2200 Cabot Boulevard 1996 25
2260/70 Cabot Boulevard 1996 25
3000 Cabot Boulevard 1996 25
18 Campus Boulevard 1996 25
16 Campus Boulevard 1996 25
2240/50 Butler Pike 1996 25
120 West Germantown Pike 1996 25
140 West Germantown Pike 1996 25
2260 Butler Pike 1996 25
100 Commerce Drive 1997 25
King & Harvard 1997 25
One South Union Place 1997 25
1 Foster Avenue 1997 25
2 Foster Avenue 1997 25
4 Foster Avenue 1997 25
5 Foster Avenue 1997 25
7 Foster Avenue 1997 25
10 Foster Avenue 1997 25
55 U.S. Avenue 1997 25
6 East Clementon Road 1997 25
20 East Clementon Road 1997 25
50 East Clementon Road 1997 25
5 U.S. Avenue 1997 25
1000 East Lincoln Drive 1997 25
Two Eves Drive 1997 25
Four A Eves Drive 1997 25
Four B Eves Drive 1997 25
Five Eves Drive 1997 25
1000/2000 West Lincoln Drive 1997 25
3000 West Lincoln Drive 1997 25
4000/5000 West Lincoln Drive 1997 25
9000 West Lincoln Drive 1997 25
10000 Midlantic Drive 1997 25
4000 Midlantic Drive 1997 25
2000 Midlantic Drive 1997 25
[Enlarge/Download Table]
Initial Cost
--------------------------------------------
Net
Improvements
(Retirements)
Encumberances at Building and Since
Property Name City State December 31, 2000 Land Improvements Acquisition
------------------------------------- ---------------- ------ -------------------- ----------------------------- --------------
15000 Midlantic Drive Mt. Laurel NJ - (g) 3,061 12,254 104
9000 Midlantic Drive Mt. Laurel NJ - (i) 1,472 5,895 19
1000 Howard Boulevard Mt. Laurel NJ 4,862 2,298 9,288 418
1120 Executive Boulevard Mt. Laurel NJ 5,064 2,074 8,415 689
1000 Atrium Way Mt. Laurel NJ - 2,061 8,180 371
Main Street - Promenade Voorhees NJ - 531 2,052 86
Main Street - Plaza 1000 Voorhees NJ - 2,729 10,931 636
Main Street - Piazza Voorhees NJ - 696 2,802 58
Main Street- CAM Voorhees NJ - 3 11 91
1007 Laurel Oak Road Voorhees NJ - 1,563 6,241 13
111 Presidential Boulevard Bala Cynwyd PA - 5,419 21,612 940
100 Berwyn Park Berwyn PA 73,000 (h) 1,180 7,290 343
200 Berwyn Park Berwyn PA - (h) 1,533 9,460 281
300 Berwyn Park Berwyn PA - (h) 2,206 13,422 146
1974 Sproul Road Broomall PA - 841 3,368 405
855 Springdale Drive Exton PA - 838 3,370 69
748 Springdale Drive Exton PA - 236 931 93
500 Office Center Drive Ft. Washington PA - 1,617 6,480 1,243
501 Office Center Drive Ft. Washington PA - 1,796 7,192 1,262
220 Commerce Drive Ft. Washington PA - 1,086 4,338 361
300 Welsh Road - Building I Horsham PA - (f) 894 3,572 430
300 Welsh Road - Building II Horsham PA - (f) 396 1,585 52
655 Business Center Drive Horsham PA - (f) 544 2,529 637
2000 Cabot Boulevard Langhorne PA - 569 2,281 214
2005 Cabot Boulevard Langhorne PA - 313 1,257 206
2010 Cabot Boulevard Langhorne PA - 760 3,091 99
321 Norristown Road Lower Gwyned PA - 1,289 5,176 290
323 Norristown Road Lower Gwyned PA - 1,685 6,751 144
100-300 Gundy Drive Reading PA - 6,495 25,180 1,831
100 Katchel Blvd Reading PA - 1,881 7,423 122
2510 Metropolitan Drive Trevose PA - 3,311 13,218 1,885
1336 Enterprise Drive West Goshen PA - 731 2,946 27
256-263 Chapman Road / Cambridge Newark DE - 292 1,185 39
256-263 Chapman Road / Bellevue Newark DE - 374 1,547 99
256-263 Chapman Road / Commonwealth Newark DE - 351 1,421 179
256-263 Chapman Road / Oxford Newark DE - 410 1,663 294
256-263 Chapman Road / Chopin Newark DE - 484 1,958 209
256-263 Chapman Road / Stockton Newark DE - 291 1,176 4
4550 New Linden Hill Road Wilmington DE - 1,998 7,995 973
301 North Walnut Street Wilmington DE - (g) 8,495 34,016 1,249
201 North Walnut Street Wilmington DE - (g) 10,359 41,509 178
4364 South Alston Avenue Durham NC 93,648 (d) 1,622 6,419 186
1255 Broad Street Bloomfield NJ - 992 3,947 38
104 Windsor Center Drive East Windsor NJ - 977 3,918 1,249
44 National Road Edison NJ - 324 1,288 183
835 New Durham Road Edison NJ - 705 2,553 116
837 New Durham Road Edison NJ - 298 1,184 30
993 Lenox Drive Lawrenceville NJ 68,000 (i) 2,811 17,996 (6,770)
997 Lenox Drive Lawrenceville NJ (i) 2,410 9,700 156
1009 Lenox Drive Lawrenceville NJ 14,573 4,876 19,284 1,379
700 East Gate Drive Mt. Laurel NJ - (d) 3,569 14,436 139
701 East Gate Drive Mt. Laurel NJ - (d) 1,736 6,877 239
815 East Gate Drive Mt. Laurel NJ - (d) 637 2,584 117
817 East Gate Drive Mt. Laurel NJ - (d) 611 2,426 56
303 Fellowship Drive Mt. Laurel NJ - (d) 1,493 6,055 337
305 Fellowship Drive Mt. Laurel NJ - (d) 1,422 5,768 600
307 Fellowship Drive Mt. Laurel NJ - (d) 1,564 6,342 311
309 Fellowship Drive Mt. Laurel NJ - (d) 1,518 6,154 561
304 Harper Drive Mt. Laurel NJ - (d) 657 2,674 240
305 Harper Drive Mt. Laurel NJ - (d) 222 913 11
308 Harper Drive Mt. Laurel NJ - 1,643 6,663 147
East Gate Land Mt. Laurel NJ (d) 1 1 -
Park 80 West Plaza I Saddlebrook NJ - (g) 6,242 26,938 3,168
[Enlarge/Download Table]
Gross Amount at Which Carried
December 31, 2000
---------------------------------------------------------
Accumulated
Depreciation at
Building and December 31, Date of
Property Name Land Improvements Total (a) 2000 (b) Construction
------------------------------------- ----------- -------------- ----------- -------------- -------------
15000 Midlantic Drive 3,061 12,358 15,419 1,824 1991
9000 Midlantic Drive 1,472 5,914 7,386 848 1989
1000 Howard Boulevard 2,298 9,706 12,004 1,566 1988
1120 Executive Boulevard 2,074 9,104 11,178 1,765 1987
1000 Atrium Way 2,061 8,551 10,612 1,155 1989
Main Street - Promenade 531 2,138 2,669 324 1988
Main Street - Plaza 1000 2,729 11,567 14,296 1,787 1988
Main Street - Piazza 696 2,860 3,556 469 1990
Main Street- CAM 3 102 105 2
1007 Laurel Oak Road 1,563 6,254 7,817 771 1996
111 Presidential Boulevard 5,419 22,552 27,971 3,095 1974
100 Berwyn Park 1,180 7,633 8,813 1,186 1986
200 Berwyn Park 1,533 9,741 11,274 1,325 1987
300 Berwyn Park 2,206 13,568 15,774 1,861 1989
1974 Sproul Road 841 3,773 4,614 602 1972
855 Springdale Drive 838 3,439 4,277 490 1986
748 Springdale Drive 236 1,024 1,260 151 1986
500 Office Center Drive 1,617 7,723 9,340 1,223 1974
501 Office Center Drive 1,796 8,454 10,250 1,338 1974
220 Commerce Drive 1,086 4,699 5,785 663 1985
300 Welsh Road - Building I 894 4,002 4,896 607 1985
300 Welsh Road - Building II 396 1,637 2,033 207 1985
655 Business Center Drive 544 3,166 3,710 600 1997
2000 Cabot Boulevard 569 2,495 3,064 396 1985
2005 Cabot Boulevard 313 1,463 1,776 210 1985
2010 Cabot Boulevard 760 3,190 3,950 470 1985
321 Norristown Road 1,289 5,466 6,755 827 1972
323 Norristown Road 1,685 6,895 8,580 1,032 1988
100-300 Gundy Drive 6,495 27,011 33,506 3,850 1970
100 Katchel Blvd 1,881 7,545 9,426 1,082 1970
2510 Metropolitan Drive 3,311 15,103 18,414 2,301 1981
1336 Enterprise Drive 731 2,973 3,704 455 1989
256-263 Chapman Road / Cambridge 292 1,224 1,516 147 1983
256-263 Chapman Road / Bellevue 374 1,646 2,020 214 1983
256-263 Chapman Road / Commonwealth 351 1,600 1,951 191 1983
256-263 Chapman Road / Oxford 410 1,957 2,367 255 1983
256-263 Chapman Road / Chopin 484 2,167 2,651 271 1983
256-263 Chapman Road / Stockton 291 1,180 1,471 142 1983
4550 New Linden Hill Road 1,998 8,968 10,966 1,102 1974
301 North Walnut Street 8,495 35,265 43,760 3,876 1989
201 North Walnut Street 10,359 41,687 52,046 4,781 1988
4364 South Alston Avenue 1,622 6,605 8,227 592 1985
1255 Broad Street 992 3,985 4,977 359 1981
104 Windsor Center Drive 977 5,167 6,144 1,099 1987
44 National Road 324 1,471 1,795 120 1967
835 New Durham Road 705 2,669 3,374 255 1974
837 New Durham Road 298 1,214 1,512 108 1977
993 Lenox Drive 2,811 11,226 14,037 1,236 1985
997 Lenox Drive 2,410 9,856 12,266 1,159 1987
1009 Lenox Drive 4,876 20,663 25,539 2,354 1989
700 East Gate Drive 3,569 14,575 18,144 1,328 1984
701 East Gate Drive 1,736 7,116 8,852 641 1986
815 East Gate Drive 637 2,701 3,338 276 1986
817 East Gate Drive 611 2,482 3,093 223 1986
303 Fellowship Drive 1,493 6,392 7,885 640 1979
305 Fellowship Drive 1,422 6,368 7,790 638 1980
307 Fellowship Drive 1,564 6,653 8,217 658 1981
309 Fellowship Drive 1,518 6,715 8,233 620 1982
304 Harper Drive 657 2,914 3,571 299 1975
305 Harper Drive 222 924 1,146 88 1979
308 Harper Drive 1,643 6,810 8,453 620 1976
East Gate Land 1 1 2 -
Park 80 West Plaza I 6,242 30,106 36,348 4,297 1988
[Download Table]
Date Depreciable
Property Name Acquired Life
------------------------------------- ------------ -----------
15000 Midlantic Drive 1997 25
9000 Midlantic Drive 1997 25
1000 Howard Boulevard 1997 25
1120 Executive Boulevard 1997 25
1000 Atrium Way 1997 25
Main Street - Promenade 1997 25
Main Street - Plaza 1000 1997 25
Main Street - Piazza 1997 25
Main Street- CAM 1997 25
1007 Laurel Oak Road 1997 25
111 Presidential Boulevard 1997 25
100 Berwyn Park 1997 25
200 Berwyn Park 1997 25
300 Berwyn Park 1997 25
1974 Sproul Road 1997 25
855 Springdale Drive 1997 25
748 Springdale Drive 1997 25
500 Office Center Drive 1997 25
501 Office Center Drive 1997 25
220 Commerce Drive 1997 25
300 Welsh Road - Building I 1997 25
300 Welsh Road - Building II 1997 25
655 Business Center Drive 1997 31.5
2000 Cabot Boulevard 1997 25
2005 Cabot Boulevard 1997 25
2010 Cabot Boulevard 1997 25
321 Norristown Road 1997 25
323 Norristown Road 1997 25
100-300 Gundy Drive 1997 25
100 Katchel Blvd 1997 25
2510 Metropolitan Drive 1997 25
1336 Enterprise Drive 1997 25
256-263 Chapman Road / Cambridge 1998 25
256-263 Chapman Road / Bellevue 1998 25
256-263 Chapman Road / Commonwealth 1998 25
256-263 Chapman Road / Oxford 1998 25
256-263 Chapman Road / Chopin 1998 25
256-263 Chapman Road / Stockton 1998 25
4550 New Linden Hill Road 1998 25
301 North Walnut Street 1998 25
201 North Walnut Street 1998 25
4364 South Alston Avenue 1998 25
1255 Broad Street 1998 25
104 Windsor Center Drive 1998 25
44 National Road 1998 25
835 New Durham Road 1998 25
837 New Durham Road 1998 25
993 Lenox Drive 1998 25
997 Lenox Drive 1998 25
1009 Lenox Drive 1998 25
700 East Gate Drive 1998 25
701 East Gate Drive 1998 25
815 East Gate Drive 1998 25
817 East Gate Drive 1998 25
303 Fellowship Drive 1998 25
305 Fellowship Drive 1998 25
307 Fellowship Drive 1998 25
309 Fellowship Drive 1998 25
304 Harper Drive 1998 25
305 Harper Drive 1998 25
308 Harper Drive 1998 25
East Gate Land 1998
Park 80 West Plaza I 1998 25
[Enlarge/Download Table]
Initial Cost
--------------------------------------------
Net
Improvements
(Retirements)
Encumberances at Building and Since
Property Name City State December 31, 2000 Land Improvements Acquisition
------------------------------------- ---------------- ------ -------------------- ----------------------------- --------------
Park 80 West Plaza II Saddlebrook NJ - (g) 7,668 30,533 2,224
33 West State Street Trenton NJ - (h) 6,016 24,091 (29)
50 East State Street Trenton NJ - (h) 8,926 35,735 368
100 Voice Road Carle Place NY - 400 1,594 8
110 Voice Road Carle Place NY - 256 1,018 5
91 North Industry Court Deer Park NY - 550 2,191 48
180 Central Ave / 2 Engineers Lane Farmingdale NY - 221 882 5
8 Engineers Lane Farmingdale NY - 194 774 70
19 Engineers Lane Farmingdale NY - 114 452 2
1000 Axinn Avenue Garden City NY - 546 2,507 (294)
645 Stewart Avenue Garden City NY - 414 1,648 9
245 Old Country Road Mellville NY - 1,232 4,903 26
336 South Service Road Melville NY - 707 2,812 29
111 Ames Court Plainview NY - 177 671 40
55 Ames Court Plainview NY - 818 3,259 493
10 Skyline Drive Plainview NY - 239 951 37
11 Commercial Street Plainview NY - 237 942 41
80 Skyline Drive Plainview NY - 484 1,937 215
120 Express Street Plainview NY - 404 1,591 98
7010 Snowdrift Way Allentown PA - (d) 817 3,324 (1)
7350 Tilghman Street Allentown PA - 3,414 13,716 1,072
7450 Tilghman Street Allentown PA - (d) 2,867 11,631 1,210
7150 Windsor Drive Allentown PA - (d) 1,034 4,219 13
7535 Windsor Drive Allentown PA - (d) 3,376 13,400 420
920 Harvest Drive Blue Bell PA - 2,433 9,738 112
925 Harvest Drive Blue Bell PA - 1,671 6,606 171
155 Rittenhouse Circle Bristol PA - (d) 370 1,437 63
150 Corporate Center Drive Camp Hill PA - 964 3,871 51
200 Corporate Center Drive Camp Hill PA - 1,647 6,606 281
300 Corporate Center Drive Camp Hill PA 1,251 4,823 19,301 265
426 Lancaster Avenue Devon PA - 1,689 6,756 -
160-180 West Germantown Pike East Norriton PA 5,521 1,603 6,418 55
50 Swedesford Square Frazer PA - (d) 3,902 15,254 354
52 Swedesford Square Frazer PA - (d) 4,242 16,579 690
922 Swedesford Road Frazer PA - 218 1 4
520 Virginia Drive Ft. Washington PA - 845 3,455 37
2401 Park Drive Harrisburg PA - 182 728 84
2404 Park Drive Harrisburg PA - 167 668 117
2405 Park Drive Harrisburg PA - 424 1,697 228
2407 Park Drive Harrisburg PA - 464 1,864 14
600 Corporate Circle Drive Harrisburg PA - 363 1,452 59
800 Corporate Circle Drive Harrisburg PA - 414 1,653 41
200 Nationwide Drive Harrisburg PA - 100 403 -
500 Nationwide Drive Harrisburg PA - 173 850 285
755 Business Center Drive Horsham PA - (f) 1,363 2,334 601
1000 First Avenue King of Prussia PA - (d) 2,772 10,936 312
1020 First Avenue King of Prussia PA - (d) 2,168 8,576 197
1040 First Avenue King of Prussia PA - (d) 2,861 11,282 1,087
1060 First Avenue King of Prussia PA - (d) 2,712 10,953 32
2490 Boulevard of the Generals King of Prussia PA - 348 1,394 27
610 Freedom Business Center King of Prussia PA - (f) 2,017 8,070 423
620 Freedom Business Center King of Prussia PA - (f) 2,770 11,014 117
630 Freedom Business Center King of Prussia PA - (f) 2,773 11,144 182
640 Freedom Business Center King of Prussia PA - (f) 4,222 16,891 49
600 Park Avenue King of Prussia PA - 1,012 4,048 -
650 Park Avenue King of Prussia PA - 1,917 4,378 1,621
630 Clark Avenue King of Prussia PA - 547 2,190 -
620 Allendale Road King of Prussia PA - 1,020 3,839 3
660 Allendale Road King of Prussia PA - 835 3,343 80
680 Allendale Road King of Prussia PA - 689 2,756 669
751-761 Fifth Avenue King of Prussia PA - 1,097 4,391 -
741 First Avenue King of Prussia PA - 1,287 5,151 -
875 First Avenue King of Prussia PA - 618 2,473 1
[Enlarge/Download Table]
Gross Amount at Which Carried
December 31, 2000
---------------------------------------------------------
Accumulated
Depreciation at
Building and December 31, Date of
Property Name Land Improvements Total (a) 2000 (b) Construction
------------------------------------- ----------- -------------- ----------- -------------- -------------
Park 80 West Plaza II 7,668 32,777 40,445 4,243 1970
33 West State Street 6,016 24,062 30,078 2,648 1988
50 East State Street 8,926 36,103 45,029 4,019 1989
100 Voice Road 400 1,602 2,002 144 1963
110 Voice Road 256 1,023 1,279 92 1963
91 North Industry Court 550 2,239 2,789 203 1965
180 Central Ave / 2 Engineers Lane 221 887 1,108 80 1960
8 Engineers Lane 194 844 1,038 86 1963
19 Engineers Lane 114 454 568 41 1962
1000 Axinn Avenue 546 2,213 2,759 200 1965
645 Stewart Avenue 414 1,657 2,071 149 1962
245 Old Country Road 1,232 4,929 6,161 444 1978
336 South Service Road 707 2,841 3,548 256 1965
111 Ames Court 177 711 888 66 1959
55 Ames Court 818 3,752 4,570 440 1961
10 Skyline Drive 239 988 1,227 90 1960
11 Commercial Street 237 983 1,220 105 1961
80 Skyline Drive 484 2,152 2,636 198 1961
120 Express Street 404 1,689 2,093 161 1962
7010 Snowdrift Way 817 3,323 4,140 298 1991
7350 Tilghman Street 3,414 14,788 18,202 1,496 1987
7450 Tilghman Street 2,867 12,841 15,708 1,290 1986
7150 Windsor Drive 1,034 4,232 5,266 381 1988
7535 Windsor Drive 3,376 13,820 17,196 1,269 1988
920 Harvest Drive 2,433 9,850 12,283 1,074 1990
925 Harvest Drive 1,671 6,777 8,448 698 1990
155 Rittenhouse Circle 370 1,500 1,870 142 1985
150 Corporate Center Drive 964 3,922 4,886 433 1987
200 Corporate Center Drive 1,647 6,887 8,534 950 1989
300 Corporate Center Drive 4,823 19,566 24,389 2,152 1989
426 Lancaster Avenue 1,689 6,756 8,445 811 1990
160-180 West Germantown Pike 1,603 6,473 8,076 720 1982
50 Swedesford Square 3,902 15,608 19,510 1,405 1988
52 Swedesford Square 4,242 17,269 21,511 1,628 1986
922 Swedesford Road 218 5 223 3 1986
520 Virginia Drive 845 3,492 4,337 425 1987
2401 Park Drive 182 812 994 95 1984
2404 Park Drive 167 785 952 108 1983
2405 Park Drive 424 1,925 2,349 221 1985
2407 Park Drive 464 1,878 2,342 204 1985
600 Corporate Circle Drive 363 1,511 1,874 161 1978
800 Corporate Circle Drive 414 1,694 2,108 181 1979
200 Nationwide Drive 100 403 503 43 1978
500 Nationwide Drive 173 1,135 1,308 102 1977
755 Business Center Drive 1,363 2,935 4,298 414 1998
1000 First Avenue 2,772 11,248 14,020 1,027 1980
1020 First Avenue 2,168 8,773 10,941 788 1984
1040 First Avenue 2,861 12,369 15,230 1,234 1985
1060 First Avenue 2,712 10,985 13,697 1,002 1987
2490 Boulevard of the Generals 348 1,421 1,769 169 1975
610 Freedom Business Center 2,017 8,493 10,510 999 1985
620 Freedom Business Center 2,770 11,131 13,901 1,338 1986
630 Freedom Business Center 2,773 11,326 14,099 1,384 1989
640 Freedom Business Center 4,222 16,940 21,162 2,033 1991
600 Park Avenue 1,012 4,048 5,060 459 1964
650 Park Avenue 1,917 5,999 7,916 699 1968
630 Clark Avenue 547 2,190 2,737 248 1960
620 Allendale Road 1,020 3,842 4,862 435 1961
660 Allendale Road 835 3,423 4,258 405 1962
680 Allendale Road 689 3,425 4,114 377 1962
751-761 Fifth Avenue 1,097 4,391 5,488 498 1967
741 First Avenue 1,287 5,151 6,438 584 1966
875 First Avenue 618 2,474 3,092 281 1966
[Download Table]
Date Depreciable
Property Name Acquired Life
------------------------------------- ------------ -----------
Park 80 West Plaza II 1998 25
33 West State Street 1998 25
50 East State Street 1998 25
100 Voice Road 1998 25
110 Voice Road 1998 25
91 North Industry Court 1998 25
180 Central Ave / 2 Engineers Lane 1998 25
8 Engineers Lane 1998 25
19 Engineers Lane 1998 25
1000 Axinn Avenue 1998 25
645 Stewart Avenue 1998 25
245 Old Country Road 1998 25
336 South Service Road 1998 25
111 Ames Court 1998 25
55 Ames Court 1998 25
10 Skyline Drive 1998 25
11 Commercial Street 1998 25
80 Skyline Drive 1998 25
120 Express Street 1998 25
7010 Snowdrift Way 1998 25
7350 Tilghman Street 1998 25
7450 Tilghman Street 1998 25
7150 Windsor Drive 1998 25
7535 Windsor Drive 1998 25
920 Harvest Drive 1998 25
925 Harvest Drive 1998 25
155 Rittenhouse Circle 1998 25
150 Corporate Center Drive 1998 25
200 Corporate Center Drive 1998 25
300 Corporate Center Drive 1998 25
426 Lancaster Avenue 1998 25
160-180 West Germantown Pike 1998 25
50 Swedesford Square 1998 25
52 Swedesford Square 1998 25
922 Swedesford Road 1998 25
520 Virginia Drive 1998 25
2401 Park Drive 1998 25
2404 Park Drive 1998 25
2405 Park Drive 1998 25
2407 Park Drive 1998 25
600 Corporate Circle Drive 1998 25
800 Corporate Circle Drive 1998 25
200 Nationwide Drive 1998 25
500 Nationwide Drive 1998 25
755 Business Center Drive 1998 31.5
1000 First Avenue 1998 25
1020 First Avenue 1998 25
1040 First Avenue 1998 25
1060 First Avenue 1998 25
2490 Boulevard of the Generals 1998 25
610 Freedom Business Center 1998 25
620 Freedom Business Center 1998 25
630 Freedom Business Center 1998 25
640 Freedom Business Center 1998 25
600 Park Avenue 1998 25
650 Park Avenue 1998 25
630 Clark Avenue 1998 25
620 Allendale Road 1998 25
660 Allendale Road 1998 25
680 Allendale Road 1998 25
751-761 Fifth Avenue 1998 25
741 First Avenue 1998 25
875 First Avenue 1998 25
[Enlarge/Download Table]
Initial Cost
--------------------------------------------
Net
Improvements
(Retirements)
Encumberances at Building and Since
Property Name City State December 31, 2000 Land Improvements Acquisition
------------------------------------- ---------------- ------ -------------------- ----------------------------- --------------
180 Wheeler Court Langhorne PA - 608 2,436 192
105 / 140 Terry Drive Newtown PA - 2,299 8,238 1,822
14 Campus Boulevard Newtown Square PA - 2,243 4,217 828
Philadelphia Marine Center Philadelphia PA - 533 2,196 33
1105 Berkshire Boulevard Reading PA - 1,115 4,510 149
1150 Berkshire Boulevard Reading PA - 435 1,748 298
11781 Lee Jackson Memorial Highway Fairfax VA - 3,616 14,468 13
12015 Lee Jackson Memorial Highway Fairfax VA - 5,398 21,563 120
4805 Lake Brooke Drive Glen Allen VA 85,044 (f) 1,640 6,567 27
2812 Emerywood Parkway Henrico VA - 1,069 4,281 -
1880 Campus Commons Drive Reston VA - 5,707 22,768 23
9100 Arboretum Parkway Richmond VA 25,800 (e) 1,363 5,489 248
9200 Arboretum Parkway Richmond VA - (e) 984 3,973 27
300 Arboretum Place Richmond VA - (e) 5,450 21,892 967
9210 Arboretum Parkway Richmond VA - (e) 1,110 4,474 118
9011 Arboretum Parkway Richmond VA - (f) 1,856 7,702 196
9211 Arboretum Parkway Richmond VA - (f) 581 2,433 (1)
600 East Main Street Richmond VA - 9,809 38,255 1,607
2100-2108 West Laburnum Richmond VA 1,529 2,482 8,846 1,150
2244 Dabney Road Richmond VA - (f) 551 2,203 -
2110 Tomlynn Street Richmond VA - 159 637 (2)
2201 Dabney Street Richmond VA - 367 1,470 -
1957 Westmoreland Street Richmond VA - (f) 1,062 4,241 282
2511 Brittons Hill Road Richmond VA - (f) 1,201 4,820 91
2240 Dabney Road Richmond VA - (f) 264 1,059 (1)
2256 Dabney Road Richmond VA - (f) 356 1,427 10
2251 Dabney Road Richmond VA - (f) 387 1,552 29
2120 Tomlynn Street Richmond VA - (f) 280 1,125 26
2169-79 Tomlynn Street Richmond VA - (f) 422 1,695 62
2212-2224 Tomlynn Street Richmond VA - (f) 502 2,014 7
2277 Dabney Road Richmond VA - (f) 507 2,034 -
2246 Dabney Road Richmond VA - (f) 455 1,822 -
2130-2146 Tomlynn Street Richmond VA - (f) 353 1,416 -
2248 Dabney Road Richmond VA - (f) 511 2,049 2
2201-2245 Tomlynn Street Richmond VA - (f) 1,020 4,067 457
2221-2245 Dabney Road Richmond VA - (f) 530 2,123 -
1900 Gallows Road Vienna VA - 7,344 29,308 22
2000 Lenox Drive Lawrenceville NJ - (i) 2,291 12,221 1,820
125 Jericho Turnpike Jericho NY - 963 4,026 359
131 Jericho Turnpike Jericho NY - 340 1,295 188
263 Old Country Road Mellville NY - 1,567 6,266 1
7130 Ambassador Drive Allentown PA 761 3,046 6
630 Dresher Road Horsham PA - 771 3,083 -
630 Allendale Road King of Prussia PA 18,095 2,836 - -
11 Campus Boulevard Newtown Square PA - 1,112 4,067 558
1050 Westlakes Drive Berwyn PA - 13,056 -
1700 Paoli Pike East Goshen PA 458 - -
--------- -------- ----------- --------
Grand Total - All Properties $ 527,877 $334,642 $1,361,087 $ 59,166
========= ======== ========== ========
[Enlarge/Download Table]
Gross Amount at Which Carried
December 31, 2000
---------------------------------------------------------
Accumulated
Depreciation at
Building and December 31, Date of
Property Name Land Improvements Total (a) 2000 (b) Construction
------------------------------------- ----------- -------------- ----------- -------------- -------------
180 Wheeler Court 608 2,628 3,236 289 1975
105 / 140 Terry Drive 2,299 10,060 12,359 1,336 1982
14 Campus Boulevard 2,243 5,045 7,288 881 1998
Philadelphia Marine Center 533 2,229 2,762 204
1105 Berkshire Boulevard 1,115 4,659 5,774 587 1987
1150 Berkshire Boulevard 435 2,046 2,481 267 1979
11781 Lee Jackson Memorial Highway 3,616 14,481 18,097 1,306 1985
12015 Lee Jackson Memorial Highway 5,398 21,683 27,081 1,953 1985
4805 Lake Brooke Drive 1,640 6,594 8,234 591 1996
2812 Emerywood Parkway 1,069 4,281 5,350 384 1980
1880 Campus Commons Drive 5,707 22,791 28,498 2,051 1985
9100 Arboretum Parkway 1,363 5,737 7,100 546 1988
9200 Arboretum Parkway 984 4,000 4,984 360 1988
300 Arboretum Place 5,450 22,859 28,309 2,238 1988
9210 Arboretum Parkway 1,110 4,592 5,702 435 1988
9011 Arboretum Parkway 1,856 7,898 9,754 751 1991
9211 Arboretum Parkway 581 2,432 3,013 219 1991
600 East Main Street 9,809 39,862 49,671 3,714 1986
2100-2108 West Laburnum 2,482 9,996 12,478 845 1976
2244 Dabney Road 551 2,203 2,754 198 1993
2110 Tomlynn Street 159 635 794 57 1965
2201 Dabney Street 367 1,470 1,837 132 1962
1957 Westmoreland Street 1,062 4,523 5,585 437 1975
2511 Brittons Hill Road 1,201 4,911 6,112 452 1987
2240 Dabney Road 264 1,058 1,322 95 1984
2256 Dabney Road 356 1,437 1,793 131 1982
2251 Dabney Road 387 1,581 1,968 141 1983
2120 Tomlynn Street 280 1,151 1,431 109 1986
2169-79 Tomlynn Street 422 1,757 2,179 170 1985
2212-2224 Tomlynn Street 502 2,021 2,523 182 1985
2277 Dabney Road 507 2,034 2,541 183 1986
2246 Dabney Road 455 1,822 2,277 164 1987
2130-2146 Tomlynn Street 353 1,416 1,769 127 1988
2248 Dabney Road 511 2,051 2,562 184 1989
2201-2245 Tomlynn Street 1,020 4,524 5,544 470 1989
2221-2245 Dabney Road 530 2,123 2,653 191 1994
1900 Gallows Road 7,344 29,330 36,674 2,640 1982
2000 Lenox Drive 2,291 14,041 16,332 158 1999
125 Jericho Turnpike 963 4,385 5,348 329 1969
131 Jericho Turnpike 340 1,483 1,823 132 1967
263 Old Country Road 1,567 6,267 7,834 418 1999
7130 Ambassador Drive 761 3,052 3,813 174 1991
630 Dresher Road 771 3,083 3,854 134 1987
630 Allendale Road 2,836 - 2,836 -
11 Campus Boulevard 1,112 4,625 5,737 238 1999
1050 Westlakes Drive - 13,056 13,056 -
1700 Paoli Pike 458 - 458 - 2000
--------- ----------- ---------- ---------
Grand Total - All Properties $ 334,642 $ 1,420,253 $1,754,895 $ 179,558
========= =========== ========== =========
[Download Table]
Date Depreciable
Property Name Acquired Life
------------------------------------- ------------ -----------
180 Wheeler Court 1998 25
105 / 140 Terry Drive 1998 25
14 Campus Boulevard 1998 25
Philadelphia Marine Center 1998 25
1105 Berkshire Boulevard 1998 25
1150 Berkshire Boulevard 1998 25
11781 Lee Jackson Memorial Highway 1998 25
12015 Lee Jackson Memorial Highway 1998 25
4805 Lake Brooke Drive 1998 25
2812 Emerywood Parkway 1998 25
1880 Campus Commons Drive 1998 25
9100 Arboretum Parkway 1998 25
9200 Arboretum Parkway 1998 25
300 Arboretum Place 1998 25
9210 Arboretum Parkway 1998 25
9011 Arboretum Parkway 1998 25
9211 Arboretum Parkway 1998 25
600 East Main Street 1998 25
2100-2108 West Laburnum 1998 25
2244 Dabney Road 1998 25
2110 Tomlynn Street 1998 25
2201 Dabney Street 1998 25
1957 Westmoreland Street 1998 25
2511 Brittons Hill Road 1998 25
2240 Dabney Road 1998 25
2256 Dabney Road 1998 25
2251 Dabney Road 1998 25
2120 Tomlynn Street 1998 25
2169-79 Tomlynn Street 1998 25
2212-2224 Tomlynn Street 1998 25
2277 Dabney Road 1998 25
2246 Dabney Road 1998 25
2130-2146 Tomlynn Street 1998 25
2248 Dabney Road 1998 25
2201-2245 Tomlynn Street 1998 25
2221-2245 Dabney Road 1998 25
1900 Gallows Road 1998 25
2000 Lenox Drive 1999 31.5
125 Jericho Turnpike 1999 25
131 Jericho Turnpike 1999 25
263 Old Country Road 1999 25
7130 Ambassador Drive 1999 25
630 Dresher Road 1999 25
630 Allendale Road 1999 31.5
11 Campus Boulevard 1999 25
1050 Westlakes Drive 2000 25
1700 Paoli Pike 2000 31.5
(a) Reconciliation of Real Estate:
The following table reconciles the real estate investments from January 1,
2000 to December 31, 2000 (in thousands):
Balance at beginning of year $ 1,771,475
Additions:
Acquisitions 13,056
Capital expenditures 34,905
Dispositions (64,541)
-----------
Balance at end of year $ 1,754,895
===========
(b) Reconciliation of Accumulated Depreciation:
The following table reconciles the accumulated depreciation on real estate
investments from January 1, 2000 to December 31, 2000 (in thousands):
Balance at beginning of year $ 125,744
Depreciation expense 63,940
Dispositions (10,126)
---------
Balance at end of year $ 179,558
=========
(c) The loans are cross-collateralized and secured by first mortgages on 3
properties.
(d) The loan is cross-collateralized and secured by mortgages on 24 properties.
(e) The loan is cross-collateralized and secured by mortgages on 4 properties.
(f) The loan is cross-collateralized and secured by mortgages on 30 properties.
(g) The loan is cross-collateralized and secured by mortgages on 6 properties.
(h) The loan is cross-collateralized and secured by mortgages on 5 properties.
(i) The loan is cross-collateralized and secured by mortgages on 7 properties.
Exhibit Index
Exhibit 3.2 Amended and Restated Bylaws of the Company
10.36 Amended and Restated Employment Agreement of Anthony A.
Nichols, Sr.**
10.37 Amended and Restated Employment Agreement of Gerard H.
Sweeney**
10.55 Fourth Amendment to Restricted Share Award to Anthony A.
Nichols, Sr.**
10.56 Fourth Amendment to Restricted Share Award to Gerard H.
Sweeney**
10.57 Severance Agreement (Barbara L. Yamarick)**
10.58 Severance Agreement (Anthony A. Nichols, Jr.)**
10.59 Severance Agreement (H. Jeffrey DeVouno)**
10.60 Severance Agreement (George Sowa)**
10.61 Severance Agreement (Bradley W. Harris)**
10.62 Restricted Share Award to Anthony A. Nichols, Sr.**
10.63 Restricted Share Award to Gerard H. Sweeney**
10.64 Restricted Share Award to Anthony S. Rimikis**
10.65 Restricted Share Award to Barbara L. Yamarick**
10.66 Restricted Share Award to Anthony A. Nichols, Jr.**
10.67 Restricted Share Award to H. Jeffrey DeVouno**
10.68 Restricted Share Award to George Sowa**
10.69 Restricted Share Award to Bradley W. Harris**
10.70 Restricted Share Award to Jeffrey F. Rogatz**
21.1 List of Subsidiaries of the Company
23.1 Consent of Arthur Andersen LLP
--------------
**Indicates management contract or compensatory plan or arrangement.
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
---|
This ‘10-K405’ Filing | | Date | | First | | Last | | | Other Filings |
---|
| | |
| | 12/31/04 | | 59 | | 65 | | | 10-K, 4 |
| | 12/31/03 | | 13 | | 60 | | | 10-K, 10-K/A |
| | 5/7/01 | | 42 | | | | | DEF 14A |
Filed on: | | 3/30/01 | | 47 |
| | 3/27/01 | | 35 |
| | 3/23/01 | | 4 | | 46 | | | 8-K |
| | 3/15/01 | | 2 |
| | 3/14/01 | | 4 | | | | | 8-K |
| | 3/1/01 | | 48 |
| | 1/15/01 | | 40 |
| | 1/2/01 | | 59 |
| | 1/1/01 | | 57 |
For Period End: | | 12/31/00 | | 1 | | 82 |
| | 12/8/00 | | 40 | | 44 |
| | 9/30/00 | | 34 | | | | | 10-Q |
| | 1/1/00 | | 82 |
| | 12/31/99 | | 37 | | 69 | | | 10-K |
| | 7/9/99 | | 34 |
| | 3/19/99 | | 43 |
| | 12/31/98 | | 37 | | 69 | | | 10-K |
| | 10/13/98 | | 45 | | | | | 8-K |
| | 9/28/98 | | 43 | | | | | 3 |
| | 8/13/98 | | 46 | | | | | 10-Q |
| | 7/30/98 | | 46 | | | | | 8-K, 8-K/A |
| | 6/3/98 | | 45 | | | | | 8-K |
| | 5/14/98 | | 46 | | | | | 8-K |
| | 5/8/98 | | 44 |
| | 4/13/98 | | 46 | | | | | 8-K, DEF 14A |
| | 4/7/98 | | 44 | | | | | 8-K/A |
| | 3/31/98 | | 44 | | | | | 10-K, 10-Q, 8-K |
| | 1/1/98 | | 51 | | 58 |
| | 12/31/97 | | 12 | | 46 | | | 10-K, 10-K/A, 8-K, 8-K/A |
| | 12/17/97 | | 45 | | | | | 8-K |
| | 9/10/97 | | 45 | | | | | 8-K |
| | 9/4/97 | | 43 | | | | | 8-K |
| | 6/9/97 | | 45 | | | | | 8-K |
| | 5/12/97 | | 43 | | | | | 10-Q, DEF 14A, PRE 14A |
| | 8/22/96 | | 45 | | | | | 8-K |
| | 12/31/94 | | 62 |
| | 12/31/93 | | 45 |
| List all Filings |
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