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XXXXXX
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REALTY
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TRUST
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A Real Estate Investment Trust
1998
ANNUAL
REPORT
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XXXXXX LOGO
XXXXXX REALTY TRUST, INC.
1998 ANNUAL REPORT
CONTENTS PAGE
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Financial Highlights........................................ Inside
Front Cover
The Trust................................................... 1
Market Information.......................................... 1
Dividends................................................... 1
Letter to Shareholders...................................... 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 3
Financial Statements and Notes.............................. 8
Directors and Officers...................................... 21
Shareholder Information..................................... 22
------------------------------------
SELECTED FINANCIAL DATA
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
FOR THE YEAR: 1998 1997 1996 1995 1994
------------- ---- ---- ---- ---- ----
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
Rental and other income....................... $ 3,161,030 $ 3,101,871 $ 3,017,982 $ 2,861,293 $ 2,719,324
Net income/(loss)............................. (490,059) (125,363) 216,538 185,597 42,217
Per share................................. (0.57) (0.14) 0.25 0.21 0.05
Funds from operations..................... 250,146 604,961 974,476 906,637 749,211
Distributions declared........................ -- 381,314 693,299 563,307 424,646
Per share................................. -- 0.44 0.80 0.65 0.49
Paid in current year:
Taxable to shareholders............... -- 0.09 0.40 0.31 0.22
Return of capital..................... -- 0.35 0.40 0.34 0.37
Declared 1993, paid in January 1994..... (0.10)
AT YEAR END:
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Total assets.................................. $14,557,537 $14,926,763 $15,481,638 $16,009,017 $16,504,068
Investment property - net..................... 13,355,053 13,769,633 14,214,620 14,811,351 15,219,284
Mortgage note payable......................... 4,643,712 4,740,875 4,830,236 4,912,421 4,988,006
Shareholders' equity.......................... 9,247,719 9,737,778 10,244,455 10,721,216 11,098,926
Number of shares outstanding.................. 866,624 866,624 866,624 866,624 866,624
--------
Represents net income adjusted for depreciation and amortization.
Currently in dispute. For more information see Note 7 to the Financial
Statements for the year ended December 31, 1998.
See Management's Discussion and Analysis for discussion of comparability of
items.
3
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THE TRUST
Xxxxxx Realty Trust, Inc. (the "Trust") is a corporation formed on June 14,
1984, to make equity investments in income-producing real properties, primarily
commercial and light industrial properties. The Trust has invested in three
properties: The Atrium at Alpha Business Center, an office building in
Bloomington, Minnesota; the Applied Communications, Inc. Building, an office
building in Omaha, Nebraska; and the Franklin Park Distribution Center, a
warehouse and distribution facility in suburban Chicago, Illinois. Since 1985
the Trust has qualified as a real estate investment trust ("REIT") under the
Internal Revenue Code.
------------------------------------
MARKET INFORMATION
The Company's common stock trades on The Nasdaq Stock Market under the
symbol NRTI. The Nasdaq high and low prices for the shares during 1997 and 1998
were as follows:
HIGH LOW
---- ---
1998
First Quarter................................. $ 11.00 $ 9.00
Second Quarter................................ $ 11.00 $ 8.375
Third Quarter................................. $ 9.875 $ 8.00
Fourth Quarter................................ $ 8.750 $ 7.25
1997
First Quarter................................. $ 10.75 $ 9.75
Second Quarter................................ $ 10.875 $ 9.50
Third Quarter................................. $ 11.625 $10.00
Fourth Quarter................................ $ 11.75 $ 9.875
As of February 1, 1999, there were 500 shareholders of record.
DIVIDENDS
The following cash dividends were paid to shareholders during 1997 and 1998:
1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR.
-------- -------- -------- --------
1997.......................... $.22 $.22 -0- -0-
1998.......................... -0- -0- -0- -0-
ONE
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March 24, 1999
To Our Shareholders:
Applied Communications, Inc., the single occupant of the office building in
Omaha, Nebraska, renewed their lease in 1998 for ten years with annual rent
increases of 3%.
The negotiation of a renewal of the Xxxxx Foods lease in the Franklin Park
Distribution Center was almost completed when Xxxxx Foods purchased another
company, substantially increasing their space needs beyond the 70,000 square
feet they currently occupied in our project, and vacated the premises in
October, 1998. The Chicago area industrial market is active and several
prospects have toured the space, however, a replacement tenant has not been
secured as of this date.
The Atrium At Alpha Business Center, a multi-tenant office building in
Bloomington, Minnesota, had average occupancy of 93% during the year until a
14,000 square foot tenant vacated in the fourth quarter pursuant to a mutual
cancellation agreement. However, a new lease for 14,000 square feet was executed
for a rental rate which is 20% higher than what the previous tenant was paying.
The Atrium At Alpha Business Center has been included in the Minneapolis
Airport Committee's "Safety Zone A" for future expansion of the Minneapolis
airport. The Trust is continuing to monitor the effect this may have on the
property, however, there were no significant developments during 1998.
For the fiscal year ended December 31, 1998, the Trust's earnings (losses)
were ($490,061) or ($.57) per share. Funds from operations, which adds
depreciation and amortization to net income computed in accordance with
generally accepted accounting principals, were $251,332 or $.29 per share. Funds
from operations decreased $355,305 or $.41 per share compared to fiscal 1997.
This decrease is attributable to the litigation the Trust is involved in as
explained below.
During 1998 the Trust successfully completed litigation brought by KelCor,
Inc. which filed a Petition for Mandamus relief against the Trust to compel the
holding of an annual meeting prior to the resolution of the "excess share"
issue. While the lower court entered an Order of Mandamus against the Trust on
April 14, 1998, the Court of Appeals reversed and remanded the cause to the
trial court with directions to Quash the Writ of Mandamus, finding that KelCor
had attempted "to play fast and loose with the court." The Trust filed a lawsuit
on August 14, 1997, seeking to resolve the "excess share" issue. This lawsuit
has been placed on the March 29, 1999, docket call. Both sides have filed
Motions for Summary Judgment which have not been ruled on to date by the court.
The Board of Directors intends for the validity and status of the excess
shares to be finally determined pursuant to this suit.
In the meantime, the Directors and management will continue to aggressively
manage the individual Trust's properties with a goal of maximizing shareholder
value.
Sincerely,
XXXXXX REALTY TRUST, INC.
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
TWO
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash reserves on hand as of December 31, 1998, were $505,365, a decrease of
$152,105 from year ended December 31, 1997. The decrease in cash is attributable
mainly to high legal fees incurred by the Trust. The Trust's current cash
position and the properties' ability to provide operating cash flow should
enable the Trust to fund anticipated capital expenditures in 1999. Expenditures
for leasing capital are dependent on the timing and actual dollars negotiated
for leases. If cash reserves decrease substantially through the year, the Trust
will defer some of the Other Capital budgeted until the following year. The
anticipated capital expenditures by property are as follows:
OTHER LEASING
CAPITAL CAPITAL TOTAL
------- ------- -----
Atrium at Alpha......................... $242,150 $ 397,425 $ 639,575
Franklin Park Dist. Center.............. 22,345 266,524 288,869
Applied Communications Inc. Bldg........ 0 350,000 350,000
-------- ---------- ----------
$264,495 $1,013,949 $1,278,444
The capital expenditures at Atrium at Alpha Business Center include leasing
capital for tenant alterations and lease commissions for new and renewal
tenants. In addition, the Registrant anticipates spending capital funds for
renovation and refurbishing of the common areas of the building. The plans
include renovations to the restrooms, lobby area, common corridors, and
elevators. In addition, new tenant signage and exterior monument sign are
planned. At Franklin Park Distribution Center, painting of the exterior metal
panels of the building is planned. Leasing capital for tenant alterations and a
lease commission upon the leasing of the vacant space is budgeted. At The
Applied Communications, Inc. building, the single occupant in the building
renewed their lease in 1998. The funds to reimburse the tenant for certain
tenant alterations may be paid during 1999 or deferred until 2000 or 2001
depending on when the tenant elects to perform the work.
The Trust's multi-tenant office building located in Bloomington, Minnesota
has been classified in the Minneapolis Airport Committee's (the "MAC") Safety
Zone A in the future expansion of the Minneapolis Airport. The expansion runway
is anticipated to be completed in 2003. The MAC will be buying out impacted
buildings during 1999. Safety Zone A is adjacent to the Federal Aviation
Authority's noise buy out zone. The MAC has not indicated whether or not it will
buy out the Trust's building. The Trust is monitoring whether the increased
noise from the new runway will have an impact on future leasing of the building.
If the Trust determines there is a negative impact, the Trust will petition the
MAC to buy the building. If the building continues to be classified in Safety
Zone A, it will be classified as nonconforming use. Given the preliminary state
of the future expansion, management is unable at this time to determine what
impact, if any, this matter will have on the Trust.
RESULTS OF OPERATIONS
The results of operations for the Trust's properties for the years ended
December 31, 1998, 1997 and 1996 are detailed in the schedule below.
Administrative expenses of the Trust are excluded.
THREE
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FUNDS FROM OPERATIONS
The white paper on Funds from Operations approved by the board of governors
of NAREIT in March 1995 defines funds from operations as net income (loss)
(computed in accordance with GAAP), excluding gains (or losses) from debt
restructuring and sales of property, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnership and joint
ventures. The Trust computes Funds from Operations in accordance with the
standards established by the white paper which may differ from the methodology
for calculating Funds from Operations utilized by other equity REITs, and,
accordingly, may not be comparable to such other REITs. Funds from Operations do
not represent amounts available for management's discretionary use because of
needed capital replacement or expansion, debt service obligations,
distributions, or other commitments and uncertainties. Funds from Operations
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of the Trust financial performance or to
cash flows from operating activities (determined in accordance with GAAP) as a
measure of the Trust liquidity, nor is it indicative of funds available to fund
the Trust cash needs including its ability to make distributions. The Trust
believes Funds from Operations are helpful to investors as measures of the
performance of the Trust because along with cash flows from operating
activities, financing activities and investing activities, they provide
investors with an understanding of the ability of the Trust to incur and service
debt and make capital expenditures.
ATRIUM AT FRANKLIN PARK APPLIED COMM.
ALPHA DIST. CENTER INC. BLDG.
--------- ------------- -------------
1998
Revenues................................ $1,341,760 $780,954 $1,111,684
Expenses................................ 1,110,703 648,049 924,891
---------- -------- ----------
Net Income.............................. $ 231,057 $132,905 $ 186,793
Depreciation and Amortization........... 352,271 163,151 208,054
---------- -------- ----------
Funds from Operations................... $ 583,328 $296,056 $ 394,847
1997
Revenues................................ $1,289,077 $755,679 $1,081,276
Expenses................................ 1,051,050 582,497 897,735
---------- -------- ----------
Net Income.............................. $ 238,027 $173,182 $ 183,541
Depreciation and Amortization........... 352,248 178,182 183,164
---------- -------- ----------
Funds from Operations................... $ 590,275 $351,364 $ 366,705
1996
Revenues................................ $1,211,306 $770,247 $1,035,582
Expenses................................ 1,020,102 604,580 909,586
---------- -------- ----------
Net Income.............................. $ 191,204 $165,667 $ 125,996
Depreciation and Amortization........... 362,549 182,374 196,529
---------- -------- ----------
Funds from Operations................... $ 553,753 $348,041 $ 322,525
1998 COMPARISONS BY PROPERTY
Operating results at the Atrium at Alpha Business Center remained steady
during 1998. Revenues increased slightly, primarily due to increases in the base
rental rates from tenants renewing and the receipt of early cancellation fees
from some tenants electing to vacate their space early. Operating expenses
increased due to an increase in real estate taxes, common area maintenance, and
professional services.
FOUR
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At Franklin Park Distribution Center, revenues increased due to an increase
in rental income, common area maintenance reimbursements, and real estate tax
reimbursements. Operating expenses increased due to one tenant vacating their
space and the costs associated with the cleanup and preparation of the space for
re-leasing.
At the Applied Communications, Inc. building, operating results were steady
when compared to the prior year. Rental revenues increased due to a built-in
step-up rent in the building's only tenant, and the fact that the tenant renewed
its lease during the year at a slight increase in the base rental rate.
Operating expenses increased slightly due to a number of different expense
categories, none of which are significant in and of themselves, as well as an
increase in amortization.
The occupancy levels at December 31 are as follows:
OCCUPANCY LEVELS AT DECEMBER 31,
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1998 1997 1996
---- ---- ----
Atrium at Alpha................................... 76% 98% 95%
Franklin Park Dist. Center........................ 57% 100% 100%
Applied Communications Inc. Bldg.................. 100% 100% 100%
During the fourth quarter, the occupancy level at Atrium at Alpha decreased
to 76%. During the quarter, one of the major tenants of the building vacated
pursuant to a mutual cancellation agreement. This tenant occupied 13,998 square
feet as well as a 600 square foot storage space. Simultaneously, the Trust
executed a new lease with a tenant to occupy this space beginning in 1999. As of
January 1999, occupancy has increased back up to 92%. During 1998 new leases
were signed with 3 tenants occupying 2,574 square feet. Renewal leases were
signed with 3 tenants occupying 7,334 square feet and 6 tenants vacated, which
occupied 21,997 square feet. The property has one major tenant on two leases
occupying 11% of the building. The two leases expire in May 1999 and October
1999. The Registrant is in discussion with the tenant on renewals of their
leases.
Franklin Park Distribution Center was fully leased by two tenants through
October 1998. In October, the tenant occupying 43% of the building vacated as
the building did not have expansion space which the tenant needed. The other
tenant occupying 57% of the building is on a lease which expires in December
1999. The Registrant is negotiating with the tenant on a renewal lease.
The Applied Communications, Inc. building has a single tenant who has
occupied the building throughout 1998. During 1998, this tenant and the
Registrant negotiated a new ten-year renewal of the tenant's lease. The lease
now expires in August 2008.
The Trust reviews long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of a property may not
be recoverable. The Trust considers a history of operating losses or a change in
occupancy to be primary indicators of potential impairment. The Registrant deems
the Property to be impaired if a forecast of undiscounted future operating cash
flows directly related to the Property, including disposal value, if any, is
less than its carrying amount. If the Property is determined to be impaired, the
loss is measured as the amount by which the carrying amount of the Property
exceeds its fair value. Fair value is based on quoted market prices in active
markets, if available. If quoted market prices are not available, an estimate of
fair value is based on the best information available, including prices for
similar properties or the results of valuation techniques such as discounting
estimated future cash flows. Considerable management judgment is necessary to
estimate fair value. Accordingly, actual results could vary significantly from
such estimates.
FIVE
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YEAR 2000 ISSUES
Information Technology Systems
The Registrant utilizes computer software for its corporate and real
property accounting records and to prepare its financial statements, as well as
for internal accounting purposes. The vendor of the Registrant's software has
informed the Registrant that it is Year 2000 compliant. The Registrant believes
after reasonable investigation that its information technology hardware is Year
2000 compliant. However, in the event that such systems should fail, as a
contingency plan, the Registrant could prepare all required accounting entries
manually, without incurring material additional operating expenses.
Non-Information Technology Systems
At the request of the Registrant, its property managers have completed their
review of the major date-sensitive non-information technology systems such as
the elevators, heating, ventilating, air conditioning and cooling ("HVAC")
systems, locks, and other like systems in the Registrant's properties and have
determined that such systems are materially Year 2000 compliant. In some of the
Registrant's properties, its property managers have utilized the services of
third-party consultants in making this determination, while in other properties,
the property managers have internally made such determinations. The Registrant
does not separately track the internal costs incurred for its Year 2000 project.
The Registrant does not believe that the Year 2000 issue will pose significant
problems to the Registrant's Information technology and non-information
technology systems, or that resolution of any potential problems with respect to
such systems will have a material effect on the Registrant's financial condition
or results of operations.
Material Third Parties' Systems Failures
The most reasonably likely worst case scenario facing the Registrant as a
result of the Year 2000 problem would be the inability of its tenants to pay
rent as a result of a breakdown in such tenants' (or their financial service
providers') computer systems or the refusal of such tenants to pay their rent as
a result of the Registrant's inability to provide services due to
non-information technology system failure. Failure in a tenant's computer
systems may cause delays in such tenant's ability to process its accounting
records and to make timely rent payments. However, any such delays in rent
payments, whether caused by systems failure of tenant, property manager or a
combination of the two, should not have a materially adverse effect on the
Registrant's business or results of operations.
Risks
While delays caused by failure of the tenants' or the property managers'
accounting or supply systems would likely not adversely affect the Registrant's
business or results of operations, non-information technology systems failure in
the Registrant's properties could lead to tenants attempting to withhold their
rent payments, which could materially adversely effect the Registrant's
business, results of operations and financial condition as a result of increased
legal costs. The Registrant believes that such material effect is primarily
limited to items of a utility nature furnished by third parties to the
Registrant and a wide universe of other customers. Included are items such as
electricity, natural gas, telephone service and water, all of which are not
readily susceptible to alternate sources and which in all likelihood should be
available in some form. The Registrant has been unable to obtain assurances from
such utility companies as to their Year 2000 compliance, and does not expect
that such assurances will be forthcoming.
Such non-information technology failure could force tenants to use the
stairs in such properties, rather than the elevators. However, none of the
properties owned by the Registrant is a high-rise building where such an
elevator failure could cause a material adverse effect to the operations of its
tenants, although such failure could make it impossible for any disabled tenants
SIX
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or any disabled customers to access such properties. Moreover, as previously
discussed, the Registrant may suffer adverse effects in its results of
operations and financial condition as a result of utility or HVAC failures, for
example. Such events could lead the tenants of the Registrant to withhold rent,
in the event that the Registrant's properties are not usable for their intended
purposes. The Registrant does not believe that rent abatement would be a lawful
tenant remedy for short-term obligations unless such failures extend for a
period of 30 consecutive days. The Registrant intends to pursue its remedies for
any such breach of its rent obligations by a Tenant expeditiously and to the
full extend permitted by law.
1998 COMPARISONS
For the year ended December 31, 1998, the Trust's consolidated revenues were
$3,189,510 compared to $3,110,120 for the year ended December 31, 1997. Thus,
revenues increased 3% or $79,390. The increase in consolidated revenues relates
mainly to increases in base rental rates at the Atrium at Alpha Business Center
and the Applied Communications Inc. building, as well as the early termination
fees received at The Atrium at Alpha Business Center.
The Trust's consolidated expenses were $3,679,569 compared to $3,235,483 for
the year ended December 31, 1997. The increase in expense is due to the high
cost of the two lawsuits which the Trust was involved in during 1998, as well as
the salaries for two of the Trust's officers. The net loss for the year ended
December 31, 1998, was ($490,059) or ($.57) per share. The net loss for the year
ended December 31, 1997, was ($125,363) or ($.14) per share. The high cost of
the lawsuits negatively impacted the operations of the Trust in both years.
Cash flow provided by operating activities was $168,949 for 1998. The Trust
paid capital expenditures of $223,891 and reduced the principal on the mortgage
note by $97,163 during 1998.
1997 COMPARISONS
For the year ended December 31, 1997, the Trust's consolidated revenues were
$3,110,120 compared to $3,033,511 for the year ended December 31, 1996. Thus,
revenues increased 3% or $76,609. The increase in consolidated revenues relates
mainly to increases in base rental rates at the Atrium at Alpha Business Center
and the Applied Communications Inc. building.
The Trust's consolidated expenses for the year ended December 31, 1997, were
$3,235,483 compared to $2,816,973 for the year ended December 31, 1996. The
increase in expenses is due primarily to the high cost of the two lawsuits and a
related proxy contest that the Trust has been involved in during 1997.
The net loss for the year ended December 31, 1997, was ($125,363) or ($.14)
per share. Net income in 1996 was $216,538 or $.25 per share. The high cost of
the two lawsuits and a related proxy contest negatively impacted the operations
of the Trust in 1997.
Cash flow provided by operating activities was $669,835 for 1997. The Trust
paid capital expenditures of $182,817, paid dividends to shareholders of
$381,314, and reduced the principal on the mortgage notes by $89,361 during
1997.
INFLATION
The effects of inflation did not have a material impact upon the Trust's
operation in fiscal 1996, 1997 and 1998.
SEVEN
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INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Xxxxxx Realty Trust, Inc.:
We have audited the accompanying balance sheets of Xxxxxx Realty Trust, Inc.
(the "Trust") as of December 31, 1998 and 1997, and the related statements of
operations, shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1998. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Xxxxxx Realty Trust, Inc. as of December 31,
1998 and 1997, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1998 in conformity with
generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
January 22, 1999
EIGHT
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XXXXXX REALTY TRUST, INC.
BALANCE SHEETS
DECEMBER 31,
------------------------
1998 1997
---- ----
ASSETS
CASH....................................................................... $ 505,365 $ 657,470
ACCOUNTS RECEIVABLE--no allowance for doubtful accounts considered
necessary................................................................ 174,231 260,085
PREPAID EXPENSES........................................................... 31,908 28,560
INVESTMENT PROPERTY--at cost:
Land.................................................................. 2,568,955 2,568,955
Buildings and improvements............................................ 17,616,281 17,739,921
----------- -----------
20,185,236 20,308,876
Less accumulated depreciation......................................... (6,830,183) (6,539,243)
----------- -----------
13,355,053 13,769,633
DEFERRED EXPENSES--at amortized cost....................................... 490,980 211,015
----------- -----------
TOTAL...................................................................... $14,557,537 $14,926,763
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Mortgage note payable................................................. $ 4,643,712 $ 4,740,875
Accounts payable and accrued expenses................................. 461,939 448,110
Deferred compensation................................................. 204,167
----------- -----------
Total liabilities.............................................. 5,309,818 5,188,985
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value--Authorized, 5,000,000 shares; issued and
outstanding, 866,624 shares (Note 7)................................ 866,624 866,624
Additional paid-in capital............................................ 14,252,532 14,252,532
Distributions in excess of net income................................. (5,871,437) (5,381,378)
----------- -----------
Total shareholders' equity..................................... 9,247,719 9,737,778
----------- -----------
TOTAL...................................................................... $14,557,537 $14,926,763
=========== ===========
See notes to financial statements.
NINE
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XXXXXX REALTY TRUST, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31,
------------------------------
1998 1997 1996
---- ---- ----
REVENUES:
Rental and other income................................................ $3,161,030 $3,101,871 $3,017,982
Interest income........................................................ 28,480 8,249 15,529
---------- ---------- ----------
Total revenues..................................................... 3,189,510 3,110,120 3,033,511
---------- ---------- ----------
EXPENSES:
Depreciation and amortization.......................................... 740,205 730,324 757,938
Real estate taxes...................................................... 637,630 564,132 579,305
Professional fees (Note 7)............................................. 522,217 431,825 49,836
Interest on mortgage note.............................................. 394,549 402,351 411,220
Officers' compensation................................................. 250,000
Utilities.............................................................. 242,667 288,553 280,400
Property management and advisory fees and general and administrative
reimbursements--related party........................................ 211,627 237,175 230,846
Repairs and maintenance................................................ 122,767 98,217 89,299
Trustee fees and expenses.............................................. 34,430 37,868 18,323
Other operating expenses............................................... 523,477 445,038 399,806
---------- ---------- ----------
Total expenses..................................................... 3,679,569 3,235,483 2,816,973
---------- ---------- ----------
NET INCOME (LOSS).......................................................... $ (490,059) $ (125,363) $ 216,538
========== ========== ==========
PER SHARE DATA (BASIC AND DILUTED):
Net income (loss) (Note 7)............................................. $ (0.57) $ (0.14) $ 0.25
========== ========== ==========
Distributions:
Paid in current year:
Taxable to shareholders........................................ $ -- $ 0.09 $ 0.40
Return of capital.............................................. 0.35 0.40
---------- ---------- ----------
Total paid in current year......................................... $ -- $ 0.44 $ 0.80
========== ========== ==========
Weighted average shares outstanding (Note 7)........................... 866,624 866,624 866,624
========== ========== ==========
See notes to financial statements.
TEN
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XXXXXX REALTY TRUST, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
COMMON STOCK
--------------------- ADDITIONAL DISTRIBUTIONS
NUMBER PAID-IN IN EXCESS OF
OF SHARES AMOUNT CAPITAL NET INCOME
--------- ------ ---------- -------------
(NOTE 7)
BALANCE, JANUARY 1, 1996.......................... 866,624 $866,624 $14,252,532 $(4,397,940)
Net income.................................... 216,538
Dividends paid................................ (693,299)
------- -------- ----------- -----------
BALANCE, DECEMBER 31, 1996........................ 866,624 866,624 14,252,532 (4,874,701)
Net loss...................................... (125,363)
Dividends paid................................ (381,314)
------- -------- ----------- -----------
BALANCE, DECEMBER 31, 1997........................ 866,624 866,624 14,252,532 (5,381,378)
Net loss...................................... (490,059)
------- -------- ----------- -----------
BALANCE, DECEMBER 31, 1998........................ 866,624 $866,624 $14,252,532 $(5,871,437)
======= ======== =========== ===========
See notes to financial statements.
ELEVEN
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XXXXXX REALTY TRUST, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
-----------------------------
1998 1997 1996
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income from operations..................................... $(490,059) $(125,363) $ 216,538
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
Depreciation..................................................... 638,471 627,804 626,300
Amortization of deferred expenses................................ 101,734 102,520 131,638
Changes in accounts affecting operations:
Accounts receivable......................................... 85,854 93,534 (91,647)
Prepaid expenses............................................ (3,348) 706 55,537
Deferred expenses........................................... (381,699) (70,529) (41,070)
Accounts payable and accrued expenses....................... 13,829 41,163 31,567
Deferred compensation....................................... 204,167
--------- --------- -----------
Net cash provided by operating activities.................. 168,949 669,835 928,863
--------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net additions to investment property................................... (223,891) (182,817) (29,569)
--------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid to shareholders......................................... -- (381,314) (693,299)
Payments on mortgage note payable...................................... (97,163) (89,361) (82,185)
--------- --------- -----------
Net cash used in financing activities...................... (97,163) (470,675) (775,484)
--------- --------- -----------
NET INCREASE (DECREASE) IN CASH............................................ (152,105) 16,343 123,810
CASH, BEGINNING OF YEAR.................................................... 657,470 641,127 517,317
--------- --------- -----------
CASH, END OF YEAR.......................................................... $ 505,365 $ 657,470 $ 641,127
========= ========= ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest................................. $ 394,549 $ 402,351 $ 411,220
========= ========= ===========
See notes to financial statements.
TWELVE
----------------
15
================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
NOTE 1--BUSINESS:
Xxxxxx Realty Trust, Inc. (the "Trust"), a Missouri corporation, was formed
on June 14, 1984 for the purpose of making equity investments in
income-producing real properties, primarily commercial and light industrial
properties. The Trust's portfolio is comprised of a multi-tenant office building
located in Bloomington, Minnesota ("Atrium at Alpha") (Note 9); a single-tenant
office building located in Omaha, Nebraska ("ACI Building"); and a warehouse and
distribution facility in Franklin Park, Illinois ("Franklin Park"). These
properties generated 41.4%, 34.2% and 24.4% of rental and other income,
respectively, for the year ended December 31, 1998.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Trust has qualified and elected to be taxed as a real estate investment
trust (REIT) under the Internal Revenue Code. The Trust intends to continue to
qualify as a REIT and to distribute substantially all of its taxable income to
its shareholders (See Note 7). Accordingly, no provision for income taxes is
reflected in the financial statements. At December 31, 1998, the Trust has net
operating loss carryforwards of approximately $1,208,000 for tax purposes which
expire in various amounts from 2000 through 2013.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment property is recorded at the lower of cost or net realizable
value. The Trust reviews long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of a property may not
be recoverable. The Trust considers a history of operating losses or a change in
occupancy to be primary indicators of potential impairment. The Trust deems the
property to be impaired if a forecast of undiscounted future operating cash
flows directly related to the property, including disposal value if any, is less
than its carrying amount. If the property is determined to be impaired, the loss
is measured as the amount by which the carrying amount of the Property exceeds
its fair value. Fair value is based on quoted market prices in active markets,
if available. If quoted market prices are not available, an estimate of fair
value is based on the best information available, including prices for similar
properties or the results of valuation techniques such as discounting estimated
future cash flows. Considerable management judgment is necessary to estimate
fair value. Accordingly, actual results could vary significantly from such
estimates.
Buildings and improvements are depreciated over their estimated useful lives
(35 years) using the straight-line method. Tenant improvements are depreciated
over the term of the lease.
Deferred expenses consist of lease fees and financing costs and are
amortized over the terms of the respective leases or notes.
Lease agreements are accounted for as operating leases and rentals from such
leases are reported as revenues ratably over the terms of the leases. Certain
lease agreements provide for
THIRTEEN
----------------
16
================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
rent concessions. At December 31, 1998 and 1997, accounts receivable include
approximately $65,000 and $140,000, respectively, of accrued rent concessions
which is not yet due under the terms of the various lease agreements.
Included in rental and other income are amounts received from tenants under
provisions of lease agreements which require the tenants to pay additional rent
equal to specified portions of certain expenses such as real estate taxes,
insurance, utilities and common area maintenance. The income is recorded in the
same period that the related expense is incurred.
Net income (loss) per share was computed based upon the weighted average
number of shares of common stock outstanding during each year. Basic and diluted
weighted average shares outstanding are the same as the impact of the options
outstanding is antidilutive. Distributions per share are stated at the amount
per share declared by the Directors. The taxability of all distributions paid is
based upon earnings and profits as defined by the Internal Revenue Code. The
taxability of distributions declared but unpaid is determined in the year the
dividend is paid.
The Trust adopted SFAS No. 130, Reporting Comprehensive Income, which
requires entities to report changes in equity that result from transactions and
economic events other than those with shareholders. The Trust had no other
comprehensive income items, accordingly net income and other comprehensive
income are the same.
Certain reclasses have been made to the prior year amounts to conform to the
current year presentation.
NOTE 3--MORTGAGE NOTE PAYABLE:
Mortgage note payable at December 31 consists of the following:
1998 1997
---- ----
8.4%, due in monthly installments of $40,976 including interest to
November 2001 when remaining principal payment of $4,330,508 is
due.................................................................. $4,643,712 $4,740,875
========== ==========
The mortgage note is collateralized by deeds of trust and assignments of
rents on all investment properties. Principal payments required are as follows:
1999.................................................... $ 105,646
2000.................................................... 114,870
2001.................................................... 4,423,196
----------
Total............................................... $4,643,712
==========
In accordance with Statement of Financial Accounting Standards No. 107,
Disclosures about Fair Value of Financial Instruments, the estimated fair value
of mortgage notes payable with maturities greater than one year is determined
based on rates currently available to the Trust for
FOURTEEN
----------------
17
================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
mortgage notes with similar terms and remaining maturities. The carrying amount
and estimated fair value of the Trust's debt at December 31, 1998 and 1997 are
summarized as follows:
1998 1997
--------------------- ---------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
Mortgage notes payable............................ $4,643,712 $4,707,000 $4,740,875 $4,802,000
Fair value estimates are made at a specific point in time, are subjective in
nature and involve uncertainties and matters of significant judgment. Settlement
of the Trust's debt obligation at fair value may not be possible and may not be
a prudent management decision. The potential loss on extinguishment at December
31, 1998 does not take into consideration expenses that would be incurred to
settle the debt obligation at fair value.
NOTE 4--RENTAL REVENUES UNDER OPERATING LEASES:
Minimum future rental revenues under noncancelable operating leases in
effect as of December 31, 1998 are as follows:
1999.............................................. $ 2,103,000
2000.............................................. 1,412,000
2001.............................................. 1,232,000
2002.............................................. 1,152,000
2003.............................................. 1,136,000
Thereafter........................................ 5,645,000
-----------
Total......................................... $12,680,000
===========
In addition, certain lease agreements require tenant participation in
certain operating expenses and additional contingent rentals based upon
percentages of tenant sales in excess of minimum amounts. Tenant participation
in expenses included in revenues approximated $391,000 for the year ended
December 31, 1998, $403,000 in 1997, and $417,000 in 1996. Contingent rentals
were not significant for the years ended December 31, 1998, 1997 and 1996.
NOTE 5--RELATED PARTY TRANSACTIONS:
The Trust had entered into an agreement with Xxxxxx Advisors Ltd., L.P. (the
"Advisor"), a Missouri limited partnership, to advise the Trust with respect to
the Trust's investments and investment policies and to administer the operations
of the Trust. This advisory agreement was renewable annually by a vote of the
Directors. A notice to terminate the contract effective February 9, 1998 was
approved on December 10, 1997. An Officer and Director of the Trust was a
general partner of Xxxxxx Advisors Ltd., L.P. The Advisor received a fee for its
services based upon net invested assets or net operating income as defined in
the agreement. The fees were $13,367, $118,906 and $117,864 for the years ended
December 31, 1998, 1997 and 1996, respectively. Effective February 10, 1998, the
Trust became self-advised. The Trust reimburses an
FIFTEEN
----------------
18
================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
affiliate, Xxxxxx, Inc. for certain general and administrative fees. The Trust
reimbursed Xxxxxx, Inc. $188,100 in general and administrative fees for the year
ended December 31, 1998.
Certain other affiliates of the Advisor received lease commissions and
property management fees in connection with the operation of investment real
estate owned by the Trust. In 1997, lease commissions of $41,330 were paid by
the Trust to Xxxxxx Xxxxxxxx Company, an affiliate of the Advisor. Lease
commissions were capitalized as deferred expenses and amortized over the life of
the lease. Additionally, property management fees paid to Xxxxxx Xxxxxxxx
Company were $98,558 for the period January 1, 1997 through October 31, 1997 and
$112,982 for the year ended December 31, 1996.
On October 31, 1997, Xxxxxx Company sold its property management business
operated through its wholly-owned subsidiary, Xxxxxx Xxxxxxxx Company, to Xxxxxx
Real Estate Company D/B/A Xxxxxx Inc., an indirect wholly-owned subsidiary of
CGS Real Estate Company, Inc., a Texas corporation. Simultaneously Xxxxxx
Company, Xxxxxxx X. Xxxxxx, Xx. and PAN, Inc. sold their general and limited
partnership interest in Xxxxxx Advisors Ltd., L.P., the external advisor to the
Trust to S-P Properties, Inc., a California corporation, which also is a
wholly-owned subsidiary of CGS Real Estate Company. Prior to the sale, the
independent Directors of the Trust approved the change in control of the Advisor
and authorized a new management contract for the Trust's properties with Xxxxxx
Inc., with the same terms and expiration dates as the existing advisory and
management contracts. Lease commissions of $102,229 and $8,266 were paid by the
Trust to Xxxxxx Inc. for the years ended December 31, 1998 and 1997,
respectively. Lease commissions are capitalized as deferred expenses and
amortized over the life of the lease. Additionally, the Trust paid Xxxxxx Inc.
property management fees of $10,160 and $19,711 for the years ended December 31,
1998 and 1997, respectively.
NOTE 6--MAJOR TENANTS:
A substantial amount of the Trust's revenue in 1998 was derived from three
major tenants, whose rentals amounted to $1,096,366, $435,016 and $323,195 or
34.4%, 13.6% and 10.1%, respectively, of total revenues. A substantial amount of
the Trust's revenue in 1997 was derived from three major tenants whose rentals
amounted to $1,093,649, $418,928 and $337,813 or 35.2%, 13.5% and 10.9%,
respectively, of total revenues. A substantial amount of the Trust's revenue in
1996 was derived from three major tenants whose rentals amounted to $1,035,600,
$463,000 and $343,900 or 34.3%, 15.4% and 11.4%, respectively, of total
revenues.
NOTE 7--LEGAL PROCEEDINGS:
During 1998, the Trust successfully completed litigation of State of
Missouri ex rel. KelCor, Inc. x. Xxxxxx Realty Trust, Inc. On August 7, 1997,
KelCor, Inc., a shareholder of the Trust, filed a Petition for mandamus relief
against the Trust. KelCor's Petition sought a writ of mandamus compelling the
Trust to hold an Annual Meeting of shareholders by October 31, 1997. The Trust
opposed KelCor's Petition on the basis that the Trust was unable to hold a valid
meeting because of uncertainty over the validity of certain shares of the Trust
and that the determination of the validity of those shares needed to first be
determined. The case was tried before the Court on December 1, 1997, on which
date the Court entered a permanent order of mandamus requiring
SIXTEEN
----------------
19
================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
the Trust to hold an Annual Meeting by January 15, 1998. The Trust appealed the
Court's order to the Missouri Court of Appeals for the Eastern District. On
April 14, 1998, the Court of Appeals reversed and remanded the cause to the
trial court with directions to quash the writ of mandamus, finding that KelCor
had attempted "to play fast and loose with the court." The trial court quashed
the writ of mandamus and entered judgment for the Trust on October 22, 1998.
The Trust is a party to a lawsuit entitled Xxxxxx Realty Trust, Inc. v.
Xxxxx X. Xxxxxxx, et al. This lawsuit has been filed in the Circuit Court of
Xxxxxxx County, Missouri. On August 18, 1997, the Trust filed a petition for
declaratory judgment against certain individuals and entities who claim to hold
shares of the Trust. The Trust initiated the suit to obtain a judicial
determination of the validity and status of some of the Trust's shares (known as
"Excess Shares") which Defendants claim to have purchased as a group on August
26, 1997. The Defendants moved to dismiss the suit and/or to stay the suit
pending resolution of a mandamus suit filed by KelCor, Inc. against the Trust on
August 7, 1997, in St. Louis County, Missouri. On December 9, 1997, the Court
denied Defendant's motion to dismiss the suit but stayed the case pending
disposition of the mandamus action. The mandamus action has been resolved in
favor of the Trust (see preceding paragraph). On July 10, 1998, pursuant to a
motion made by Defendants on June 25, 1998, the Court ordered that the December
9, 1997 order staying the proceedings was lifted and that the case should be
placed on the active trial docket. On July 7, 1998, the Trust filed an Amended
Petition to add two additional Defendants to the case and to add additional
claims against the Defendants for malicious prosecution and abuse of process.
The Defendants, on August 3, 1998, filed a Motion for Summary Judgment to
dismiss the Trust's count for declaratory judgment. On December 11, 1998, the
Trust filed its cross-motion for summary judgment on the declaratory judgment
count and the parties' cross-motions are currently pending before the Court. The
case has been placed on the March 29, 1999, trial docket call. The Board of
Directors intends for the validity and status of the Excess Shares to be finally
determined pursuant to this suit.
While the results of such litigation cannot be predicted with certainty,
management, after discussion with counsel, believes the final outcome will not
have a material adverse effect on the financial position and results of
operations reflected in the financial statements presented herein. In addition,
a determination in the lawsuit that the Trust's shares at issue are Excess
Shares may result in these shares being returned to the Trust's treasury without
compensation, thus reducing the number of shares outstanding and increasing
shareholders' equity per outstanding share. At this point, however, management
cannot predict with certainty whether such shares will be deemed to be Excess
Shares or how such shares will be treated if they are deemed to be Excess
Shares. Once the validity and status of the Excess Shares can be determined, the
Trust will be in a position to hold an Annual Meeting. Until the validity of the
Excess Shares is known, the payment of dividends has been suspended. In order
for the Trust to continue to qualify as a REIT, substantially all of the Trust's
taxable income must be distributed to its shareholders. Accordingly, lack of
resolution of the status of the Excess Shares could affect the Trust's ability
to continue to qualify as a REIT under the Internal Revenue Code in the future.
The cost of these lawsuits negatively impacted earnings during 1998 and 1997.
SEVENTEEN
----------------
20
================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
NOTE 8--EMPLOYMENT AGREEMENTS:
Effective March 1, 1998, the Trust entered into two five-year employment
agreements that are cancelable after three years subject to certain performance
criteria as defined in the employment agreements. Annual compensation
recognizable under the agreements total $300,000 and include options to purchase
an aggregate of 75,000 shares of the Trust's Common Stock at $10.00 per share.
No options may be exercised during 1998. The options vest at a rate of 20% each
anniversary date. The Trust applies APB Opinion 25, Accounting for Stock Issued
to Employees and related interpretations in accounting for its plan. Had
compensation cost for the Trust's stock-based compensation plans been determined
based on the fair value at the grant dates for awards under the Fixed Stock
Option Plan consistent with the method of FASB 123, Accounting for Stock-based
Compensation, the Trust's net loss and loss per share would have been reduced to
the pro forma amounts indicated below:
Net loss:
As reported................................... $(490,059)
Pro forma..................................... (504,328)
Loss per share:
As reported................................... (0.57)
Pro forma..................................... (0.58)
The fair value of the option grant has been estimated on the date of grant
using the Black-Sholes option pricing model with the following assumptions:
dividend yield of 9.7%, expected volatility of 27%, risk-free interest rate of
7%, and expected life of 5 years.
On August 20, 1998, the Trust granted 12,500 stock appreciation rights to
the three outside Directors to be paid in cash to the extent the Trust's Common
Stock price exceeds eight dollars and thirty seven and one-half cents at the
time of election. The rights vest 20% per year and expire five years after
vesting. No amounts were required to be accrued in connection with these rights
in 1998.
NOTE 9--CONTINGENCY:
The Trust's multi-tenant office building located in Bloomington, Minnesota
has been classified in the Minneapolis Airport Committee's (the "MAC") Safety
Zone A in the future expansion of the Minneapolis Airport. The expansion runway
is anticipated to be completed in 2003. The MAC will be buying out impacted
buildings during 1999. Safety Zone A is adjacent to the Federal Aviation
Authority's noise buyout zone. The MAC has not indicated whether or not it will
buyout the Trust's building. The Trust is monitoring whether the increased noise
from the new runway will have an impact on future leasing of the building. If
the Trust determines there is a negative impact, the Trust will petition the MAC
to buy the building. If the building continues to be classified in Safety Zone
A, it will be classified as nonconforming use. Given the preliminary stage of
the future expansion, management is unable at this time to determine what
impact, if any, this matter will have on the Trust.
EIGHTEEN
----------------
21
================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
NOTE 10--BUSINESS SEGMENTS (IN THOUSANDS):
The Trust has three reportable operating segments: Atrium at Alpha, Franklin
Park, and ACI Building. The Trust's management evaluates performance of each
segment based on profit or loss from operations before allocation of general and
administrative expenses, unusual and extraordinary items, and interest. The
accounting policies of the segments are the same as those described in the
summary of significant accounting policies (see Note 2).
1998 1997 1996
---- ---- ----
(IN THOUSANDS)
Revenues:
Atrium at Alpha........................................................ $ 1,341.8 $ 1,289.1 $ 1,211.3
Franklin Park.......................................................... 781.0 755.7 770.2
ACI Building........................................................... 1,111.7 1,081.3 1,035.6
--------- --------- ---------
$ 3,234.5 $ 3,126.1 $ 3,017.1
========= ========= =========
Operating Profit:
Atrium at Alpha........................................................ $ 231.1 $ 238.0 $ 191.2
Franklin Park.......................................................... 132.9 173.2 165.7
ACI Building........................................................... 186.8 183.5 126.0
--------- --------- ---------
$ 550.8 $ 594.7 $ 482.9
========= ========= =========
Capital Expenditures:
Atrium at Alpha........................................................ $ 146.6 $ 182.8 $ 29.6
Franklin Park.......................................................... 11.9
ACI Building........................................................... 65.4
--------- --------- ---------
$ 223.9 $ 182.8 $ 29.6
========= ========= =========
Depreciation and Amortization:
Atrium at Alpha........................................................ $ 352.3 $ 352.2 $ 362.5
Franklin Park.......................................................... 163.2 178.2 182.4
ACI Building........................................................... 208.1 183.2 196.5
--------- --------- ---------
$ 723.6 $ 713.6 $ 741.4
========= ========= =========
Assets:
Atrium at Alpha........................................................ $ 5,682.1 $ 5,882.9
Franklin Park.......................................................... 4,912.4 4,745.9
ACI Building........................................................... 3,320.6 3,413.9
--------- ---------
$13,915.1 $14,042.7
========= =========
NINETEEN
----------------
22
==================================================================================================================
XXXXXX REALTY TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
Reconciliations of segment data to the Trust's consolidated data follow:
1998 1997 1996
---- ---- ----
(IN THOUSANDS)
Revenues:
Segments............................................................... $ 3,234.5 $ 3,126.1 $ 3,017.1
Corporate and other.................................................... (45.0) (16.0) 16.4
--------- --------- ---------
$ 3,189.5 $ 3,110.1 $ 3,033.5
========= ========= =========
Operating Profit:
Segments............................................................... $ 550.8 $ 594.7 $ 482.9
General and administrative expenses.................................... (1,040.9) (720.1) (266.4)
--------- --------- ---------
$ (490.1) $ (125.4) $ 216.5
========= ========= =========
Depreciation and Amortization:
Segments............................................................... $ 723.6 $ 713.6 $ 741.4
Corporate and other.................................................... 16.6 16.7 16.5
--------- --------- ---------
$ 740.2 $ 730.3 $ 757.9
========= ========= =========
Assets:
Segments............................................................... $13,915.1 $14,042.7
Corporate and other.................................................... 642.4 884.1
--------- ---------
$14,557.5 $14,926.8
========= =========
TWENTY
----------------
23
============================================================================================================
DIRECTORS AND OFFICERS
Board of Directors
Xxxxxxx X. Xxxxxx...... Founder and Chief Executive Officer of CGS Real Estate Company, Newport Beach,
California. CGS is a diversified real estate investment management company.
Xxxxxxxx X. Xxxxxxx.... Real estate owner, consultant and educator.
Xxxxxxx X. Xxxxx, Xx... President, Carlsberg Management Company, Santa Monica, California.
Xxxxx X. Xxxxxx........ President, Cambridge Savings Bank, Cambridge, Massachusetts.
Xxxxxxx X. Xxxxxx, Xx.. Chairman of the Board and Chief Executive Officer, Xxxxxx, Inc. Xxxxxx Inc. is a
real estate investment management firm, and a wholly-owned subsidiary of CGS Real
Estate Company.
Officers
Xxxxxxx X. Xxxxxx...... Chief Executive Officer and Chairman of the Board
Xxxxxxx X. Xxxxxx, Xx.. Vice Chairman
Xxxxxxxx X. Xxxxxx..... President and Secretary
Xxxxxx X. Xxxxxxx...... Treasurer and CFO
TWENTY-ONE
----------------
24
================================================================================
XXXXXX LOGO
SHAREHOLDER INFORMATION
Transfer Agent:
ChaseMellon Shareholder Services
X.X. Xxx 0000
Xxxxx Xxxxxxxxxx, XX 00000-0000
Legal Counsel:
Xxxxx Xxxx LLP
St. Louis, Missouri
Independent Accountants:
Deloitte & Touche LLP
St. Louis, Missouri
The following information is available to shareholders without charge upon
written request to Xxxxxxxx X. Xxxxxx, Secretary, Xxxxxx Realty Trust, Inc., 000
X. Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000:
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Form 10-K is available in April.
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.
Forms 10-Q are available in May, August and November.
Xxxxxx Realty Trust, Inc. Dividend Reinvestment Plan and Enrollment Card
TWENTY-TWO
----------------
25
INVESTMENT PROPERTIES
THE ATRIUM
AT ALPHA BUSINESS CENTER
BLOOMINGTON, MINNESOTA
APPLIED COMMUNICATIONS, INC. BUILDING
OMAHA, NEBRASKA
FRANKLIN XXXX XXXXXXXXXXXX XXXXXX
XXXXXXXX XXXX, XXXXXXXX
XXXXXX REALTY TRUST
000 X. XXXXXXXX
XX. XXXXX, XXXXXXXX 00000
