Exhibit 99.1
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PRIME GROUP REALTY TRUST
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Second Quarter, 2003
Supplemental Financial and Operating Statistics
for the three months
ended June 30, 2003
This Supplemental Financial and Operating Statistics is not an offer to
sell or a solicitation to buy any securities of the Company. Any offers to sell
or solicitations to buy any securities of the Company shall be made by means of
a prospectus.
Certain statements in this release regarding anticipated operating results
and time are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Although the Company believes the
statements and projections are based upon reasonable assumptions, actual results
may differ from those projected. Key factors that could cause actual results to
differ materially include economic downturns, successful and timely completion
of acquisitions, renovations and development programs, leasing activities and
other risks associated with the commercial real estate business, and as detailed
in the Company's filings from time to time with the Securities and Exchange
Commission.
Table of Contents
Company Overview Page
Corporate Profile 3
Board of Trustees and Executive Officers 4
Quarterly Financial and Operating Results
Second Quarter Highlights 5
Consolidated Statements of Operations
- Three Months ended June 30, 2003 6
Consolidated Reconciliation of Net Income to Funds from Operations (FFO)
- Three Months ended June 30, 2003 7
Consolidated Statements of Operations
- Six Months ended June 30, 2003 8
Consolidated Reconciliation of Net Income to Funds from Operations (FFO)
- Six Months ended June 30, 2003 9
Consolidated Balance Sheet 10
Leasing Activity Summary by Quarter 11
Leasing Activity Summary Year-to-Date 12
Same-Store Leasing Summary 13
Acquisition/Disposition Activity 14
Market Capitalization and Indebtedness Information
Market Capitalization 15
Capital Markets Activity 16
Indebtedness Schedule 17
Recourse Indebtedness Schedule 18
Indebtedness Allocation Graphs 19
Interest Rate Hedge Agreements 20
Indebtedness Maturities 21
Indebtedness Maturities with Extension Options 22
Indebtedness Maturity Schedule through 2004 23
Maturing Contractual Obligations 24
Portfolio Information
Capital Expenditure Disclosure 25
Square Feet of Office and Industrial Properties Owned
and Joint Venture Development Interests 26
Property Summary 27
Office Lease Expiration Schedule 28
Industrial Lease Expiration Schedule 29
Largest Office Tenants by Gross Revenue 30
Largest Industrial Tenants by Gross Revenue 31
Standard Industrial Classification (SIC) 32
Investor Relations Information 33
2
Corporate Profile
Prime Group Realty Trust is a fully-integrated, self-administered, and
self-managed real estate investment trust (REIT) that owns, manages, leases,
develops, and redevelops office and industrial property, primarily in
metropolitan Chicago. As of August 7, 2003, we own 14 office properties
containing an aggregate of 7.0 million net rentable square feet and 30
industrial properties containing an aggregate of 3.9 million net rentable square
feet. In addition, we have joint venture interests in two office properties
totaling 1.3 million rentable square feet: 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx and Thistle Landing, Phoenix, Arizona. The portfolio also includes
232.4 acres of developable land.
In terms of net rentable square feet, all of our properties are located in
metropolitan Chicago and accounted for all of our total rental revenue
(excluding discontinued operations) for the quarter ended June 30, 2003.
3
Board of Trustees
-----------------
Xxxxxxx Xxxxxxx XX
Principal, DC Partners, LLC
Xxxxxxx X. D'Ardenne
Principal, Castle Pines Advisors
Xxxxxx X. Xxxxxxxx
Vice Chairman Western Region and Director, Xxxxxx X. Xxxxxxx, Inc.
Xxxxxx X. Xxxxxxx
President, Xxxxxxx & Associates, LLC
Xxxxxxx X. Xxxxx
Chairman of the Board of Trustees, Prime Group Realty Trust
Xxxxxxxxxxx X. Xxxxxxxx
President and Chief Executive Officer, Host Marriott Corporation
Executive Officers
------------------
Xxxxxxx X. Xxxxx
Chairman of the Board of Trustees
Xxxxx X. Xxxxxxxx
Co-President, Chief Financial Officer
Xxxxxxx X. Xxxxxxxxx
Co-President, Chief Investment Officer
Xxxxxx X. Xxxxx
Executive Vice-President, CBD Office Leasing
Xxxxxx X. Xxxxxx
Executive Vice President, Development
Xxxxx X. Xxxxxxx
Executive Vice-President, General Counsel and Secretary
Xxxx X. Xxxxx
Executive Vice President, Suburban/CBD Office Leasing
Xxxx X. Xxxxxxxxxx
Senior Vice President, CBD Office Leasing
Xxxx X. Del Vecchio
Senior Vice President, Capital Markets
Xxx X. Xxxxxxx
Senior Vice President, Finance and Chief Accounting Officer
Xxxxxxxxxxx "Kit" X. Xxxxx
Senior Vice President, Industrial Operations
4
Second Quarter 2003 Highlights
GAAP loss per diluted share for the second quarter of 2003 was $0.12, an
decrease from a loss of $0.27 per diluted share for the second quarter of 2002.
Funds from Operations ("FFO") for the second quarter of 2003 totaled $0.23
per diluted share, as compared to $0.29 per diluted share for the second quarter
of 2002.
The Company realized a "same-store" decrease in GAAP operating income of
22.9% and a "same-store" decrease in net operating income of 18.9% for the 9.4
million square feet of office and industrial properties that were owned during
both the 2002 and 2003 second quarters, principally due to the decrease in
revenue following the February 2003 termination of our leases with Xxxxxx
Xxxxxxxx LLP, partially offset by related lease termination fee income.
During the quarter, the Company renewed or extended 17 office leases
totaling 179,916 square feet, expanded five office leases totaling 25,931 square
feet, and signed five new office leases totaling 16,424 square feet. In
addition, one industrial lease was renewed for 15,680 square feet.
The Company executed several capital transactions during the quarter
including:
The sale of the National City Center office property in Cleveland,
Ohio for $80.0 million.
The repayment of $8.1 million of the mezzanine debt with Fleet
National Bank principally from the proceeds of the sale of National
City Center.
The repayment of $7.6 million of one of the loans with Security
Capital Preferred Growth ("SCPG") from the proceeds of the sale of
National City Center.
Exercising the Company's first extension option extending the maturity
of the SCPG loans until January 12, 2004.
5
Consolidated Statements of Operations
(000's omitted, except per share data)
(Unaudited)
Three Months Ended
June 30
2003 2002
----------------------
Revenue:
Rental $ 27,048 $ 24,384
Lease termination fees 1,514 78
Tenant reimbursements 14,608 14,279
Other property revenues 1,191 1,411
Services Company revenue 807 1,329
----------------------
Total revenue 45,168 41,481
Expenses:
Property operations 10,881 11,628
Real estate taxes 10,580 8,935
Depreciation and amortization 9,963 7,524
General and administrative 2,626 2,470
Services Company operations 607 874
Severance costs - 1,979
Strategic alternative costs 420 651
----------------------
Total expenses 35,077 34,061
----------------------
Operating income 10,091 7,420
Other income 1,598 410
Interest:
Expense (14,464) (8,424)
Amortization of deferred financing costs (1,328) (682)
----------------------
Loss from continuing operations before minority interests (4,103) (1,276)
Minority interests 2,238 1,876
----------------------
(Loss) income from continuing operations (1,865) 600
Discontinued operations, net of minority interests of
$(627) and $784 in 2003 and 2002, respectively 1,984 (903)
----------------------
Income (loss) before loss on sales of real estate 119 (303)
Loss on sales of non-operating properties, net of minority
interests of $408 in 2002 - (580)
----------------------
Net income (loss) 119 (883)
Net income allocated to preferred shareholders (2,250) (3,380)
----------------------
Net loss available to common shareholders $ (2,131) $ (4,263)
======================
Basic and diluted earnings available to common shares per
weighted-average common share:
Loss from continuing operations, net of minority interests
and the allocation of net income to preferred
shareholders $ (0.24) $ (0.18)
Discontinued operations, net of minority interests 0.12 (0.06)
Loss on sales of real estate, net of minority interests - (0.03)
----------------------
Net loss available per weighted-average common share of
beneficial interest -basic and diluted $ (0.12) $ (0.27)
======================
6
GAAP Reconciliation of Net Income (Loss) to Funds from Operations (FFO)
(000's omitted, except per share/unit data)
(Unaudited)
Three Months Ended
June 30
2003 2002
----------------------
Net income (loss) $ 119 $ (883)
Adjustments to reconcile to Funds from Operations:
Real estate depreciation and amortization 9,615 7,379
Amortization of costs for leases assumed 748 157
Share of joint venture real estate depreciation and
amortization 871 844
Loss on sale of operating property, net of minority
interests - 580
Adjustments for discontinued operations:
Real estate depreciation and amortization - 1,464
Provision for impairment on operating real estate - 566
(Gain) loss on sale of discontinued operating property (1,220) 3,812
Minority interests 627 (784)
Minority interests (2,238) (1,876)
Income allocated to preferred shareholders (2,250) (3,380)
----------------------
Funds from Operations(1) $ 6,272 $ 7,879
======================
FFO per common share of beneficial interest:
Basic and Diluted $ 0.23 $ 0.29
======================
Weighted average shares of beneficial interest:
Basic and Diluted 26,747 26,749
======================
(1) Funds from Operations is a non-GAAP financial measure. Funds from
Operations ("FFO") is defined as net income (loss), computed in accordance
with generally accepted accounting principles ("GAAP") plus real estate
depreciation and amortization, excluding gains (or losses) from sales of
operating properties (which we believe includes impairments on operating
real estate), and after comparable adjustments for unconsolidated joint
ventures and discontinued operations. Funds from Operations includes
results from discontinued operations, including revenues, property
operations expense, real estate taxes expense and interest expense.The
Company computes FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts ("NAREIT"), which may
not be comparable to FFO reported by other REITs that do not define the
term in accordance with the current NAREIT definition or that interpret the
current NAREIT definition differently than the Company.
The Company utilizes FFO as a performance measure. The Company believes
that FFO provides useful information to investors regarding the Company's
performance as FFO provides investors with additional means of comparing
the Company's operating performance with the operating performance of its
competitors. FFO is not representative of cash flow from operations, is not
indicative that cash flows are adequate to fund all cash needs and should
not be considered as an alternative to cash flows as a measure of
liquidity. The Company believes that net income (loss) is the most directly
comparable GAAP financial measure to FFO.
7
Consolidated Statements of Operations
(000's omitted, except per share data)
(Unaudited)
Six Months Ended
June 30
2003 2002
-----------------------
Revenue:
Rental $ 53,266 $ 48,624
Lease termination fees 31,226 745
Tenant reimbursements 29,990 28,249
Other property revenues 2,533 2,871
Services Company revenue 1,465 2,760
-----------------------
Total revenue 118,480 83,249
Expenses:
Property operations 22,616 22,421
Real estate taxes 20,760 18,345
Depreciation and amortization 19,445 14,691
General and administrative 4,946 4,445
Services Company operations 1,167 2,009
Provision for asset impairment - 5,171
Severance costs - 1,979
Strategic alternative costs 473 913
-----------------------
Total expenses 69,407 69,974
-----------------------
Operating income 49,073 13,275
Other income 2,094 1,247
Interest:
Expense (29,763) (17,085)
Amortization of deferred financing costs (2,950) (1,376)
-----------------------
Income (loss) from continuing operations before minority
interests 18,454 (3,939)
Minority interests (6,120) 5,461
-----------------------
Income from continuing operations 12,334 1,522
Discontinued operations, net of minority interests of
$(1,101) and $13,666 in 2003 and 2002, respectively 2,656 (19,617)
-----------------------
Income (loss) before loss on sales of real estate 14,990 (18,095)
Loss on sales of non-operating properties, net of minority
interests of $626 in 2002 - (895)
-----------------------
Net income (loss) 14,990 (18,990)
Net income allocated to preferred shareholders (4,500) (6,579)
-----------------------
Net income (loss) available to common shareholders $ 10,490 $ (25,569)
=======================
Basic and diluted earnings available to common shares per
weighted-average common share:
Income (loss) from continuing operations, net of minority
interests and the allocation of net income to preferred
shareholders $ 0.47 $ (0.32)
Discontinued operations, net of minority interests 0.16 (1.25)
Loss on sales of real estate, net of minority interests - (0.06)
-----------------------
Net income (loss) available per weighted-average common
share of beneficial interest -basic and diluted $ 0.63 $ (1.63)
=======================
8
GAAP Reconciliation of Net Income (Loss) to Funds from Operations (FFO)
(000's omitted, except per share/unit data)
(Unaudited)
Six Months Ended
June 30
2003 2002
-----------------------
Net income (loss) $ 14,990 $ (18,990)
Adjustments to reconcile to Funds from Operations:
Real estate depreciation and amortization 18,736 14,413
Amortization of costs for leases assumed 1,068 320
Share of joint venture real estate depreciation and
amortization 1,725 1,687
Loss on sale of operating property, net of minority
interests - 687
Adjustments for discontinued operations:
Real estate depreciation and amortization 555 3,885
Provision for impairment on operating real estate - 34,200
(Gain)loss on sale of operating real estate (1,220) 3,812
Minority interests 1,101 (13,666)
Minority interests 6,120 (5,461)
Income allocated to preferred shareholders (4,500) (6,579)
-----------------------
Funds from Operations(1) $ 38,575 $ 14,308
=======================
FFO per common share of beneficial interest:
Basic and Diluted $ 1.44 $ 0.54
=======================
Weighted average shares of beneficial interest:
Basic and Diluted 26,747 26,631
=======================
(1) Funds from Operations is a non-GAAP financial measure. Funds from
Operations ("FFO") is defined as net income (loss), computed in accordance
with generally accepted accounting principles ("GAAP") plus real estate
depreciation and amortization, excluding gains (or losses) from sales of
operating properties (which we believe includes impairments on operating
real estate), and after comparable adjustments for unconsolidated joint
ventures and discontinued operations. Funds from Operations includes
results from discontinued operations, including revenues, property
operations expense, real estate taxes expense and interest expense.The
Company computes FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts ("NAREIT"), which may
not be comparable to FFO reported by other REITs that do not define the
term in accordance with the current NAREIT definition or that interpret the
current NAREIT definition differently than the Company.
The Company utilizes FFO as a performance measure. The Company believes
that FFO provides useful information to investors regarding the Company's
performance as FFO provides investors with additional means of comparing
the Company's operating performance with the operating performance of its
competitors. FFO is not representative of cash flow from operations, is not
indicative that cash flows are adequate to fund all cash needs and should
not be considered as an alternative to cash flows as a measure of
liquidity. The Company believes that net income (loss) is the most directly
comparable GAAP financial measure to FFO.
9
Consolidated Balance Sheet
(000's omitted, except share data)
(Unaudited)
June 30 December 31
2003 2002
------------------------
Assets
Real estate, at cost:
Land $ 169,188 $ 183,891
Building and improvements 952,973 1,032,669
Tenant improvements 110,572 111,547
Furniture, fixtures and equipment 10,265 10,218
------------------------
1,242,998 1,338,325
Accumulated depreciation (118,605) (110,387)
------------------------
1,124,393 1,227,938
Property held for development 22,568 20,158
------------------------
1,146,961 1,248,096
Investments in unconsolidated entities 1,239 1,440
Cash and cash equivalents 8,686 15,800
Receivables, net of allowance of $2,243 and $1,867 at
June 30, 2003 and December 31, 2002, respectively:
Tenant 1,939 1,595
Deferred rent 21,799 22,351
Other 262 2,453
Restricted cash escrows 83,329 58,933
Deferred costs, net 52,801 53,943
Other 3,596 3,987
------------------------
Total assets $1,320,612 $1,408,598
========================
Liabilities and Shareholders' Equity
Mortgages and notes payable $ 590,600 $ 671,340
Bonds payable 24,900 24,900
Construction financing 238,171 208,198
Accrued interest payable 6,548 21,818
Accrued real estate taxes 40,982 36,642
Accrued tenant improvement allowances 22,185 33,172
Accounts payable and accrued expenses 19,119 16,981
Construction costs payable, including retention of
$2,495 and $5,034 at June 30, 2003 and December 31,
2002, respectively 7,804 12,896
Liabilities for leases assumed 16,771 21,692
Deficit investment in unconsolidated entity 3,290 4,223
Other 8,807 10,654
------------------------
Total liabilities 979,177 1,062,516
Minority interests:
Operating Partnership 29,047 98,643
Other -- 2,000
Shareholders' equity:
Preferred Shares, $0.01 par value; 30,000,000 shares
authorized:
Series B - Cumulative Redeemable Preferred Shares,
4,000,000 shares designated, issued and outstanding
at June 30, 2003 and December 31, 2002 40 40
Common Shares, $0.01 par value; 100,000,000 shares
authorized; 23,670,522 and 15,689,623 shares issued
and outstanding at June 30, 2003 and December 31,
2002, respectively 236 157
Additional paid-in capital 381,252 330,327
Accumulated other comprehensive loss (5,053) (6,008)
Distributions in excess of earnings (64,087) (79,077)
------------------------
Total shareholders' equity 312,388 245,439
------------------------
Total liabilities and shareholders' equity $1,320,612 $1,408,598
========================
10
Leasing Activity Summary (1)
June 30, 2003
New Leasing By Quarter
SECOND QUARTER 2003 Downtown Suburban Total Industrial Total
NEW LEASING Office Office Office Portfolio
-------------------------------------------------------
3/31/2003 Net Rentable (1) 6,279,163 1,685,719 7,964,882 3,874,712 11,839,594
6/30/2003 Net Rentable (1) 6,289,718 1,687,169 7,976,887 3,874,712 11,851,599
3/31/2003 Occupied SF 4,549,614 1,432,158 5,981,772 3,214,979 9,196,751
3/31/2003 Occupied % 72.5% 85.0% 75.1% 83.0% 77.7%
Number of New Leases Commencing 4 2 6 - 6
SF of New Leasing Commencing 281,146 12,828 293,974 - 293,974
Number of Expansions Commencing 4 1 5 - 5
SF of Expansions Commencing 19,111 6,961 26,072 - 26,072
Number of Move Outs 13 2 15 1 16
SF of Move Outs 185,304 12,298 197,602 120,004 317,606
Number of Lease Terminations 2 3 5 - 5
SF of Lease Terminations 17,580 14,281 31,861 - 31,861
6/30/2003 Occupied SF 4,646,987 1,425,368 6,072,355 3,094,975 9,167,330
6/30/2003 Occupied % 73.9% 84.5% 76.1% 79.9% 77.4%
Renewal Leasing by Quarter
SECOND QUARTER 2003 Downtown Suburban Total Industrial Total
RENEWAL LEASING (2) Office Office Office Portfolio
-------------------------------------------------------
Number of Renewals 13 1 14 - 14
SF up for Renewal (3) 241,165 15,513 256,678 120,004 376,682
SF of Leases Renewed 55,861 3,215 59,076 - 59,076
Renewal Percentage 23.2% 20.7% 23.0% - 15.7%
Old Rental Rate Including Straight-Line
Rent (4) $24.47 $27.34 $24.62 $- $24.62
New Rental Rate Including Straight-Line
Rent (4) $31.93 $21.56 $31.36 $- $31.36
Percentage Change in Rental Rate 30.5% (21.1)% 27.4% - 27.4%
Old Rental Rate Excluding Straight-Line
Rent (5) $28.90 $27.83 $28.84 $- $28.84
New Rental Rate Excluding Straight-Line
Rent (5) $30.09 $22.97 $29.70 $- $29.70
Percentage Change in Rental Rate 4.1% (17.5)% 3.0% - 3.0%
(1) 3/31/03 & 6/30/03 Downtown Office totals include 77 West Xxxxxx, but exclude
National City Center, which was sold on June 18, 2003.
(2) Renewals exclude lease terms less than 36 months.
(3) SF up for Renewal excludes tenants in bankruptcy and lease terminations.
(4) Old and New Rental rates including Straight-Line Rent refer to the average
gross rental rate over the term of the old lease and the lease renewal,
respectively.
(5) Old and New Rental rates excluding Straight-Line Rent refer to the gross
rental rate in place at the expiration date of the old lease and the gross
rental rate at the commencement date of the new lease, respectively.
11
Leasing Activity Summary (1)
June 30, 2003
New Leasing Year-to-Date
2003 NEW LEASING Downtown Suburban Total Total
Office Office Office Industrial Portfolio
-------------------------------------------------------
12/31/2002 Net Rentable (1) 6,274,575 1,686,176 7,960,751 3,874,712 11,835,463
6/30/2003 Net Rentable (1) 6,289,718 1,687,169 7,976,887 3,874,712 11,851,599
12/31/2002 Occupied SF 4,461,991 1,425,770 5,887,761 3,270,585 9,158,346
12/31/2002 Occupied % 71.1% 84.6% 74.0% 84.4% 77.4%
Number of New Leases
Commencing 14 3 17 - 17
SF of New Leasing Commencing 1,079,448 14,201 1,093,649 - 1,093,649
Number of Expansions
Commencing 9 3 12 - 12
SF of Expansions Commencing 25,599 15,082 40,681 - 40,681
Number of Move Outs 19 3 22 3 25
SF of Move Outs 236,671 14,640 251,311 175,610 426,921
Number of Lease Terminations 6 4 10 - 10
SF of Lease Terminations 683,380 15,045 698,425 - 698,425
6/30/2003 Occupied SF 4,646,987 1,425,368 6,072,355 3,094,975 9,167,330
6/30/2003 Occupied % 73.9% 84.5% 76.1% 79.9% 77.4%
Renewal Year-to-Date
2003 RENEWAL LEASING (2) Downtown Suburban Total Total
Office Office Office Industrial Portfolio
-------------------------------------------------------
Number of Renewals 18 3 21 - 21
SF up for Renewal (3) 303,255 24,362 327,617 175,610 503,227
SF of Leases Renewed 66,584 9,722 76,306 - 76,306
Renewal Percentage 22.0% 39.9% 23.3% - 15.2%
Old Rental Rate Including Straight-Line
Rent (4) $23.07 $26.32 $23.49 $- $23.49
New Rental Rate Including Straight-Line
Rent (4) $31.55 $24.69 $30.68 $- $30.68
Percentage Change in Rental Rate 36.7% (6.2)% 30.6% - 30.6%
Old Rental Rate Excluding Straight-Line
Rent (5) $28.80 $26.80 $28.55 $- $28.55
New Rental Rate Excluding Straight-Line
Rent (5) $29.85 $24.83 $29.21 $- $29.21
Percentage Change in Rental Rate 3.6% (7.4)% 2.3% - 2.3%
(1) 12/31/02 & 6/30/03 Downtown Office totals include 77 West Xxxxxx, but
exclude National City Center, which was sold on June 18, 2003.
(2) Renewals exclude lease terms less than 36 months.
(3) SF up for Renewal excludes tenants in bankruptcy and lease terminations.
(4) Old and New Rental rates including Straight-Line Rent refer to the average
gross rental rate over the term of the old lease and the lease renewal,
respectively.
(5) Old and New Rental rates excluding Straight-Line Rent refer to the gross
rental rate in place at the expiration date of the old lease and the gross
rental rate at the commencement date of the new lease, respectively.
12
Same-Store Leasing Summary
June 30, 2003 vs. June 30, 2002
Square Feet (SF) SF Leased % Leased SF SF Leased % Leased
June 30, June 30, June 30, June 30, June 30, June 30,
2002 2002 2002 2003 2003 2003
-------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxx
00 X. Xxxxxx Xxxxxx 846,759 768,429 90.7% 852,075 183,688 21.6%
00 Xxxx Xxxxxx Xxxxx 944,556 920,301 97.4% 944,556 867,852 91.9%
000 Xxxxx XxXxxxx Xxxxxx 861,566 791,080 91.8% 865,410 803,219 92.8%
000 Xxxxx XxXxxxx Xxxxxx 758,361 687,418 90.6% 760,929 629,661 82.7%
IBM 1,356,826 1,319,664 97.3% 1,364,635 1,221,390 89.5%
-------------- ---------- --------- ----------- ----------- ----------
Downtown Office Total 4,768,068 4,486,892 94.1% 4,787,605 3,705,810 77.4%
-------------- ---------- --------- ----------- ----------- ----------
Xxxxxxxx Xxxxxx
0000 Xxxxxxx 50,157 50,157 100.0% 50,157 50,157 100.0%
Atrium Building 65,361 60,056 91.9% 65,361 57,152 87.4%
Brush Hill 109,877 109,877 100.0% 109,904 109,904 100.0%
Continental Towers 925,091 715,365 77.3% 925,091 714,954 77.3%
Enterprise Center II 62,619 54,270 86.7% 62,619 54,270 86.7%
Xxxxx Boulevard 191,666 191,666 100.0% 191,666 186,493 97.3%
Narco River 65,386 52,065 79.6% 64,929 52,674 81.1%
Narco Tower 50,400 50,400 100.0% 50,400 50,400 100.0%
Olympian Office Center 165,717 163,798 98.8% 167,042 151,696 90.8%
-------------- ---------- --------- ----------- ----------- ----------
Suburban Office Total 1,686,274 1,447,654 85.8% 1,687,169 1,427,700 84.6%
-------------- ---------- --------- ----------- ----------- ----------
Industrial Property
Enterprise Center II 169,435 28,978 17.1% 169,435 28,978 17.1%
Enterprise Center III 291,550 154,275 52.9% 291,550 154,275 52.9%
Enterprise Center IV 87,484 85,800 98.1% 87,484 85,800 98.1%
Enterprise Center EC 14,070 14,070 100.0% 14,070 14,070 100.0%
Enterprise Center V 196,475 196,475 100.0% 196,475 196,475 100.0%
Enterprise Center VI 250,266 248,255 99.2% 250,266 248,255 99.2%
HEC 76,821 71,203 92.7% 76,821 70,797 92.2%
Enterprise Center VII 462,670 462,670 100.0% 462,670 462,670 100.0%
Enterprise Center VIII 242,199 81,859 33.8% 242,199 81,859 33.8%
Enterprise Center IX 162,682 107,469 66.1% 162,682 107,469 66.1%
Enterprise Center X 172,775 169,659 98.2% 172,775 169,659 98.2%
Arlington I-III 304,506 304,506 100.0% 304,506 304,506 100.0%
000 Xxxxx Xxxx 67,935 67,935 100.0% 67,935 67,935 100.0%
000 Xxxxx Xxxx 30,084 30,084 100.0% 30,084 - 0.0%
000 Xxxxx Xxxx 60,290 60,290 100.0% 60,290 60,290 100.0%
000 Xxxxx Xxxx 40,502 40,502 100.0% 40,502 40,502 100.0%
000 Xxxxxxxxx Xxxxxx 66,254 66,254 100.0% 66,254 66,254 100.0%
000 Xxxxx Xxxx 25,200 25,200 100.0% 25,200 22,050 87.5%
000 Xxxxx Xxxxxx 44,575 44,575 100.0% 44,575 44,575 100.0%
0000 Xxxxxxx Xxxxxx 79,532 79,532 100.0% 79,532 79,532 100.0%
0000 Xxxxxxx Xxxxxx 90,344 90,344 100.0% 90,344 90,344 100.0%
0000 Xxxxxxx Xxxxxx 127,129 103,350 81.3% 127,129 103,350 81.3%
0000 Xxxx Xxxx 120,004 120,004 100.0% 120,004 - 0.0%
0000 X. Xxxxxxxxx Xxxxxx 17,265 17,265 100.0% 17,265 17,265 100.0%
00000 Xxxx Xxxxxx 21,935 21,935 100.0% 21,935 21,935 100.0%
00000 Xxxx Xxxxxx 136,600 136,600 100.0% 136,600 136,600 100.0%
000 Xxxx Xxxx 62,400 62,400 100.0% 62,400 62,400 100.0%
0000 Xxxxxx Xxxxx 43,930 43,930 100.0% 43,930 43,930 100.0%
0000 Xxxxxxx Xxxxx 257,600 216,200 83.9% 257,600 161,000 62.5%
000 X. Xxxxxxxx Xxxxxx 152,200 152,200 100.0% 152,200 152,200 100.0%
-------------- ---------- --------- ----------- ----------- ----------
Industrial Property Totals 3,874,712 3,303,819 85.3% 3,874,712 3,094,975 79.9%
-------------- ---------- --------- ----------- ----------- ----------
TOTALS 10,329,054 9,238,365 89.4% 10,349,486 8,228,485 79.5%
============== ========== ========= =========== =========== ==========
13
Acquisition/Disposition Activity
Three Months Ended June 30, 2003
Net
Rentable Acquisition Date
Square Cost / Sales Mortgage Acquired /
Property Location Feet/Acres Price Indebtedness Sold
--------------------------------------------------------------------------------------------------
Acquisition:
Land Aurora, IL 30.3 $ 2.4 - June
Disposition:
Xxxxxxxx Xxxx Xxxxxx Xxxxxxxxx, XX 767,181 $ 80.0 $ 64.7 June
14
Market Capitalization
June 30, 2003
Common Equity
-------------
Common Shares Outstanding 23,670,522
Operating Partnership Units(1) 3,076,586
--------------
Total Shares and Units 26,747,108
PGE Share Price(2) $ 5.80
--------------
Market Capitalization $ 155,133,226
==============
Cumulative
Preferred Stock Dividend
--------------- ----------
Series B Cumulative Redeemable Preferred (3) 100,000,000 9.00%
--------------
Total Preferred 100,000,000
==============
Total $ 255,133,226
==============
Weighted Weighted Average Maturity
Average With Without
Principal Interest Extension Extension
Indebtedness Outstanding Rate(4) Options Options
------------ -------------- --------- --------- ---------
Secured $ 615,500,110 6.33% 4.85 3.99
Construction Financing 238,170,849 7.72% 1.52 0.52
Total $ 853,670,959
Weighted average interest rate includes the effect of the hedge agreements
Indebtedness Allocation
-----------------------
Fixed Rate $ 241,610,736 8.74% 6.81 6.73
Hedged Variable Rate(5) 339,200,000 4.88% 3.68 2.17
Non-Hedged Variable Rate 9,789,374 4.40% 0.61 0.61
Senior Construction 163,170,849 3.92% 1.52 0.52
Mezzanine Construction 75,000,000 16.00% 1.52 0.52
Low-Floater Industrial Development Revenue Bonds (IDRBs) 24,900,000 3.49% 3.51 3.51
--------------
Total $ 853,670,959
==============
(1) Convertible one-for-one into common shares
(2) Price as of June 30, 2003
(3) The Series B shares may be redeemed at our option at a redemption price of
$25.00 per share plus accrued and unpaid dividends (which totaled
$6,750,000 at June 30, 2003 for the fourth quarter of 2002 and the first
and second quarter of 2003.)
(4) Based on interest rates as of June 30, 2003
(5) See Interest Rate Hedge Agreement schedule for hedge details
15
Capital Markets Activity
Six months ended June 30, 2003
Beginning Indebtedness Balance
(January 1, 2003) $ 904,438,927
Indebtedness Retirement (First Quarter):
Amount
Property/Indebtedness Type Retired Institution
------------------------------------------- --------------- -----------------------------
IBM Plaza/Mezzanine $ (27,100,000) Deutsche Banc BT Alex.Xxxxx
IBM Plaza/Mezzanine (150,000,000) Westdeutsche Immobilien Bank
Bank One Center/Mezzanine (60,820,285) Deutsche Bank
Various/Mezzanine (11,407,212) Security Capital Preferred
Growth, Inc.
Principal Amortization (1,200,775) Various
Total $ (250,528,272)
===============
New Indebtedness (First Quarter):
Current Interest Rate Loan
Property/Indebtedness Type Amount Institution Classification at 6/30/03 Maturity
------------------------------------------- --------------- ----------------------------- -------------------- -------- ---------
IBM Plaza $ 195,000,000 Xxxxxx Brothers Bank FSB Hedged Variable Rate(1) 5.03% 3/15/2006
Bank One Center/Mezzanine 75,000,000 LNR Property Corporation Fixed Rate 16.00% 1/5/2004
Bank One Center/Additional Construction
Proceeds 7,238,710 HypoVereinsbank Hedged Variable Rate(1) 3.95% 1/5/2004
---------------
Total $ 277,238,710
===============
Ending Indebtedness Balance
(March 31, 2003) $ 931,149,365
===============
Indebtedness Retirement (Second Quarter):
Amount
Property/Indebtedness Type Retired Institution
------------------------------------------- --------------- -----------------------------
National City Center $ (64,306,052) Corus Bank
Xxxxxxxx Xxxx Xxxxxx, Xxxxx Xxxxx, 000
Xxxxx XxXxxxx (8,100,000) Fleet national Bank
33 West Monroe (7,000,000) DGZ Deka Bank
Various/Mezzanine (5,714,506) Security Capital Preferred
Growth, Inc.
Principal Amortization (911,835) Various
---------------
Total $ (86,032,393)
===============
New Indebtedness (Second Quarter):
Current Interest Rate Loan
Property/Indebtedness Type Amount Institution Classification at 6/30/03 Maturity
------------------------------------------- --------------- ----------------------------- -------------------- -------- ---------
Bank One Center/Additional Construction
Proceeds $ 8,553,987 HypoVereinsbank Hedged Variable Rate(1) 3.92% 1/5/2004
---------------
Total $ 8,553,987
===============
Ending Indebtedness Balance
(June 30, 2003) $ 853,670,959
===============
(1) See Interest Rate Hedge Agreement schedule for hedge details.
16
Indebtedness Schedule
June 30, 2003
Maturity
Date
Original Loan with Annualized
Portfolio or Loan InterestTerm Maturity Extenion Debt
Lender Property Amount Rate (yrs) Date Options Service 06/30/02 06/30/03
------------------------------------------------------------------------------------------------------------------------
Fixed Rate
Indebtedness:
CIGNA Continental
Towers (1701
Golf Road) 75,000,000 7.22% 15.0 1/5/013 $6,487,877 $69,922,492 $68,434,417
CIBC Xxxxxxxxxxx Xxxxx Industrial 16,511,000 7.17% 10.0 5/1/2008 5,160,473 15,851,657 15,656,799
Midland Loan Xxxxx Industrial
Services 15,556,000 7.17% 10.0 5/1/2008 1,263,400 14,934,793 14,751,206
Midland Realty Xxxxx Industrial
Funding 14,933,000 7.17% 10.0 5/1/2008 1,213,780 14,336,672 14,160,437
Deutsche Banc IBM Plaza (330
Alex. Xxxxx North Wabash
Ave) 30,000,000 11.75% 2.0 2/23/2003 *N/A 28,300,000 -
Xxxxxxxxx Xxxxxxx 0000 Xxxxxxx 3,908,000 8.44% 10.0 5/1/2010 369,266 3,853,752 3,823,795
LaSalle Bank, N.A.Xxxxx Plaza ( 000
Xxxxx Xxxxxxxxx) 22,800,000 8.33% 10.0 12/1/2010 2,061,790 22,565,801 22,394,366
CIBC Xxxxxxxxxxx Narco River
Business Center 2,800,000 8.68% 10.0 12/1/2009 274,644 2,721,837 2,685,297
(0000 000xx
Xxxxxx)
Deutsche Banc Brush Hill Office
Mortgage Capital Courte 8,200,000 8.76% 10.0 1/1/2010 774,816 8,075,009 8,015,039
(740
Pasquilleni
Drive)
Capital Company of208 South LaSalle
America Street 45,800,000 7.79% 15.0 4/11/2013 3,986,250 43,990,704 43,457,938
Deutsche Banc Enterprise Office
Alex. Xxxxx II (2305
Enterprise Dr.) 6,000,000 7.63% 10.0 3/1/2011 509,611 5,941,218 5,889,126
LaSalle Bank, N.A.555 Xxxx Road and
0000 Xxxxxx
Xxxxx 2,500,000 7.35% 1.0 4/30/2005 246,565 2,404,185 2,368,679
Security Capital Various
Preferred Growth,
Inc. 37,279,909 13.50% 1.0 1/12/2004 7/10/2004 - 19,973,636
Security Capital Various
Preferred Growth,
Inc. 20,000,000 15.75% 1.0 1/12/2004 7/10/2004 - 20,000,000
--------------------------
Total Fixed Rate
Indebtedness 232,898,120 241,610,736
Hedged Variable Rate Indebtedness:(1)
DGZ Deka Bank 00 Xxxx Xxxxxx
Xxxxxx 67,000,000 2.79% 5.0 11/15/2005 11/15/2007 4,143,764 67,000,000 60,000,000
Greenwich Capital 000 Xxxxx XxXxxxx
Xxxxxx 60,000,000 5.13% 3.5 1/15/2004 5,543,125 60,000,000 60,000,000
Fleet National 00 Xxxx Xxxxxx
Xxxx Xxxxxx 12,500,000 8.18% 3.0 11/15/2004 1,145,833 12,500,000 12,300,000
Fleet National Xxxxx Plaza and
Bank 000 Xx. Xxxxxxx
Xxxxxx 20,000,000 8.32% 3.0 11/15/2004 2,129,167 20,000,000 11,900,000
Westdeutsche IBM Plaza (330
ImmobilienBank North Wabash
Ave) 160,000,000 8.00% 3.0 12/13/2002 12/13/2004 *N/A 153,200,000 -
Xxxxxx Brothers IBM Plaza (330
Bank FSB North Wabash
Ave) 130,211,771 3.70% 3.0 3/9/2006 3/9/2008 - 130,211,771
Xxxxxx Brothers IBM Plaza (330
Bank FSB North Wabash
Ave) 64,788,229 7.70% 3.0 3/9/2006 3/9/2008 9,808,500 - 64,788,229
--------------------------
Total Hedged Variable Rate
Indebtedness 312,700,000 339,200,000
--------------------------
Non-hedged Variable Rate
Indebtedness:
Corus Bank National City
Center 67,000,000 4.40% 5.0 4/30/2006 5,708,000 65,691,974 -
Corus Bank 000 Xxxxx
Xxxxxxxx Xxxxx 4,235,000 5.25% 2.0 9/1/2003 235,815 4,166,996 4,079,335
XxXxxxx Xxxx, X.X.0000 Xxxxxxx
Xxxxx 6,000,000 3.79% 2.0 5/31/2004 471,458 5,631,972 5,710,039
TN Industrial Tennessee
Development Portfolio
Revenue Bonds 9,000,000 1.55% 17.0 11/9/2002 *N/A 9,000,000 -
IN Industrial Enterprise I -
Development Enterprise VI
Revenue Bonds 24,900,000 3.49% 5.0 1/2/2007 1,629,445 24,900,000 24,900,000
--------------------------
Total Non-hedged Variable Rate
Indebtedness 109,390,941 34,689,374
--------------------------
Construction
Indebtedness
Deutsche Banc Bank One Center
Alex.Xxxxx Mezzanine Loan 65,000,000 23.00% 3.0 1/5/2004 *N/A 58,998,030 -
LNR Property Bank One Center
Corporation Mezzanine Loan 75,000,000 16.00% 0.8 1/5/2004 1/5/2005 11,250,000 - 75,000,000
HypoVereinsbank Bank One Center
Construction
Loan 222,000,000 3.92% 3.0 1/5/2004 1/5/2005 6,107,366 106,226,248 163,170,849
--------------------------
Total Construction
Indebtedness 165,224,278 238,170,849
--------------------------
Total Indebtedness $820,213,338 $853,670,959
==========================
*N/A - Not applicable as debt is no longer outstanding
(1) See Interest Rate Hedge Agreement schedule for hedge details.
17
Recourse Indebtedness
As of June 30, 2003
Recourse Indebtedness:
------------------------------
Current
Loan Recourse Type of
Lender Property/Loan Amount Amount Financing
------------------------------ ------------------------------------- ------------- ------------- -----------------------
LaSalle Bank, N.A. Letters of Credit $25,241,101 $25,241,101 Letter of Credit
CIGNA Investments, Inc. Continental Towers 68,434,417 2,145,692 Office Permanent
Corus Bank 000 Xxxxx Xxxxxxxx Xxxxx 4,079,334 4,079,334 Office Permanent
Security Capital Various 20,000,000 20,000,000 Mezzanine
Security Capital Various 20,000,000 20,000,000 Mezzanine
LaSalle National Bank Xxxx Road/Xxxxxx Drive 2,368,679 625,000 Industrial Permanent
LaSalle National Bank 0000 Xxxxxxx Xxxxx 5,710,039 5,710,039 Industrial Construction
Xxxxxx Brothers Bank FSB IBM Plaza 195,000,000 10,000,000 Mezzanine
Westdeutsche ImmobilienBank 00 Xxxx Xxxxxx Xxxxx 157,500,000 5,250,000 Office Permanent
DGZ DekaBank 00 Xxxx Xxxxxx Xxxxxx 60,000,000 3,000,000 Office Permanent
Hypo Vereinsbank Bank One Center 163,170,849 60,000,000 Office Construction
Fleet National Bank 00 Xxxx Xxxxxx Xxxxxx 12,300,000 12,300,000 Mezzanine
Fleet National Bank 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx Plaza 11,900,000 11,900,000 Mezzanine
------------- -------------
Total Recourse Indebtedness $745,704,419 $180,251,166
------------- -------------
18
Indebtedness Allocation as of June 30, 2003
Fixed Rate 28.3%
Hedged Variable Rate 39.7%
Non-hedged Variable Rate 1.1%
Low Floaters IDRBs 2.9%
Construction Financing 27.9%
Fixed Rate $ 241,610,736
Hedged Variable Rate $ 339,200,000
Non-hedged Variable Rate $ 9,789,374
Low Floaters IDRBs $ 24,900,000
Construction Financing $ 238,170,849
---------------
$ 853,670,959
19
Interest Rate Hedge Agreements
June 30, 2003
Type of Index Notional Floating Financial Maturity
Counterparty Hedge Strike Rate Amount Index Institution Date
----------------------------------------------------------------------------------------------------------------------------------
00 Xxxx Xxxxxx Xxxxxx, LLC Cap 6.50% 1.1375% $ 67,000,000 1 MO LIBOR CDC Financial Products Inc. 10/31/04
00 Xxxx Xxxxxx Xxxxxx, LLC Cap 8.35%- 1.1800% $ 12,500,000 1 MO LIBOR Fleet National Bank 11/15/03
9.00%
000 Xxxxx Xxxxxx Xxxxxx Cap 4.25% 1.2200% $ 150,000,000 1 MO LIBOR SMBC Capital Markets, Inc. 12/13/03
000 Xxxxx XxXxxxx Xxxxxx, LLC Cap 7.25% 1.3200% $ 60,000,000 1 MO LIBOR SBCM Derivative Products
Ltd. 01/15/04
Prime Group Realty, LP Cap 7.50% 1.3200% $ 11,900,000 1 MO LIBOR Fleet National Bank 11/15/04
Dearborn Center, LLC Cap 4.25%- 1.1038% $ 220,000,000 (0) 0 XX XXXXX HVB Risk Management
7.40% Products, Inc. 01/05/04
000 Xxxxx Xxxxxx Xxxxxx Cap 6.60% 1.1800% $ 130,211,771 1 MO LIBOR Xxxxxx Brothers Financial
Products 03/15/06
000 Xxxxx Xxxxxx Xxxxxx Mezz Cap 6.60% 1.1100% $ 64,788,229 1 MO LIBOR Xxxxxx Brothers Financial
Products, Inc. 03/15/06
Non-Consolidated Hedge Agreements
00 Xxxx Xxxxxx Xxxxx, LLC Collar 7.75% $ 157,500,000 1 MO LIBOR Fleet National Bank 09/30/04
(1) Notional amount increases automatically each month until it equals $230.0
million on December 22, 2003.
20
Indebtedness Maturities and Scheduled Amortization Payments
June 30, 2003
Cumulative
Scheduled Total Percentage Percentage
Amortization Scheduled Scheduled of Debt of Debt
Year Payments Maturities Maturities Maturing Maturing
------ ------------ ------------- ------------- ---------- ----------
2003 $2,109,104 $3,820,913 $5,930,017 0.7% 0.7%
2004 8,991,744 362,044,484 371,036,228 43.5% 44.2%
2005 3,530,649 62,299,999 65,830,648 7.7% 51.9%
2006 3,771,872 195,000,000 198,771,872 23.3% 75.2%
2007 3,961,217 24,900,000 28,861,217 3.4% 78.6%
2008+ 7,080,829 176,160,148 183,240,977 21.4% 100.0%
------ ------------ ------------- ------------- ----------
TOTAL $29,445,415 $824,225,544 $853,670,959 100.0%
============ ============= ============= ==========
21
Indebtedness Maturities with Extension Options and Amortization Payments
June 30, 2003
Cumulative
Scheduled Total Percentage Percentage
Amortization Scheduled Scheduled of Debt of Debt
Year Payments Maturities Maturities Maturing Maturing
------ ------------- ------------- ------------- ---------- ----------
2003 $16,581,800 $4,321,852 $20,903,652 2.4% 2.4%
2004 8,991,744 108,900,000 117,891,744 13.8% 16.2%
2005 3,530,649 240,470,848 244,001,497 28.6% 44.8%
2006 3,771,872 - 3,771,872 0.4% 45.2%
2007 3,961,217 84,900,000 88,861,217 10.4% 55.6%
2008+ 64,788,231 313,452,746 378,240,977 44.4% 100.0%
------ ------------- ------------- ------------- ----------
TOTAL $101,625,513 $752,045,446 $853,670,959 100.0%
============= ============= ============= ==========
22
Indebtedness Maturity Schedule through 2004
As of June 30, 2003
2003
Current Debt Maturity with
Type Lender Portfolio/Property Amount Maturity extension options
---------------------------------------------------------------------------------------------------------------------
Variable Corus Bank 000 Xxxxx Xxxxxxxx Xxxxx $4,079,334 9/1/2003 9/1/2003
--------------
$4,079,334
==============
2004
Current Debt Maturity with
Type Lender Portfolio/Property Amount Maturity extension options
---------------------------------------------------------------------------------------------------------------------
Fixed Security Capital Various $20,000,000 1/12/2004 7/10/2004
Fixed Security Capital Various 20,000,000 1/12/2004 7/10/2004
Hedged Variable Greenwich Capital 000 Xxxxx XxXxxxx Xxxxxx 60,000,000 1/15/2004 1/15/2004
Variable LaSalle Bank 0000 Xxxxxxx Xxxxx 5,710,039 5/31/2004 5/31/2004
Hedged Variable Fleet National Bank 00 Xxxx Xxxxxx Xxxxxx 12,300,000 11/15/2004 11/15/2004
Hedged Variable Fleet National Bank Xxxxx Plaza, 000 Xxxxx
XxXxxxx Xxxxxx 11,900,000 11/15/2004 11/15/2004
Fixed LNR Property Corporation Bank One Center 75,000,000 1/5/2004 1/5/2005
Hedged Variable HypoVereinsbank Bank One Center 163,170,849 1/5/2004 1/5/2005
Hedged Variable Westdeutsche Immobilien 00 Xxxx Xxxxxx Xxxxx (1)
Bank 157,500,000 9/29/2004 9/29/2005
--------------
$525,580,888
==============
(1) We have a 50.0% joint venture interest in this property.
23
Maturing Contractual Obligations
June 30, 2003
Payments Due by Period
(dollars in thousands)
--------------------------------------------------
2004- 2006-
Contractual Obligations(A) Total 2003 2005 2007 Thereafter
------------------------------------------------------------ ---------- ------------ -------------------------
Mortgages and notes payable $ 590,600 $ 5,930 $ 198,696 $ 202,733 $ 183,241
Bonds payable(B) 24,900 - - 24,900 -
Construction financing 238,171 - 238,171 - -
Capital lease obligations 434 140 294 - -
Operating leases 11,705 1,649 4,522 3,623 1,911
Tenant improvement allowances (C)(D)
22,185 22,185 - - -
Liabilities for leases
assumed and lease reimbursement obligations(E)
87,688 6,678 23,596 18,390 39,024
Deferred interest and loan exit fees 4,687 - 4,687 - -
------------ ---------- ------------ ------------ ------------
Total contractual cash
obligations $ 980,370 $ 36,582 $ 469,966 $ 249,646 $ 224,176
============ ========== ============ ============ ============
(A) We anticipate funding these obligations from operations and the proceeds of
equity, debt, or asset sale(s) transaction(s).
(B) The scheduled maturity date for the bonds is 2022. The earlier payment due
shown here reflects the 2007 scheduled expiration of letters of credit which
credit enhance the bonds, which if not extended or replaced, would accelerate
the maturity of the bonds.
(C) We have escrows of $2.3 million which may be utilized to fund these
obligations.
(D) Tenant improvement allowances of $18.5 million correspond to Bank One Center
and will be funded through its construction loan. We anticipate this obligation
will be funded in 2003.
(E) These obligations would be offset by any receipts from subleasing of the
related space. On March 19, 2003, we refinanced the Bank One Center mezzanine
loan in conjunction with our refinancing, our escrow obligations were
restructured. Please see our Form 10-Q, Note 10 - Recent Developments and Note
17 - Commitments and Contingencies to our Consolidated Financial Statements for
a description of the Citadel Reimbursement Obligations.
Total Amount of Commitment Expiration Per Period
Amounts (dollars in thousands)
Other Commercial Commitments(A) Committed 2003 2004-2005 2006-2007 Thereafter
-------------------------------------------------- ----------- ----------- -----------------------
Standby letters of credit $ 25,461 $ 220 $ - $ 25,241 $ -
Guarantees 115,010 4,079 98,785 - 12,146
Unconsolidated joint ventures 83,456 5,000 78,456 - -
Tax indemnifications 70,461 (B) (B) (B) (B)
Series B preferred shares (C) 11,250 18,000 18,000 (C)
------------- ----------- ----------- -----------------------
Total commercial commitments $ 294,388 $ 20,549 $ 195,241 $ 43,241 $ 12,146
============ =========== =========== =========== ===========
(A) Please see our Form 10-Q, section "Liquidity and Capital Resources" for
additional information regarding the above.
(B) The amount of certain indemnities decreases by 10% each calendar year on
each anniversary date of our November 17, 1997 initial public offering.
(C) Dividends are cumulative and payable at a 9.0% annual rate each quarter that
the Series B Shares remain outstanding. The Series B Shares rank senior to the
common shares as to the payment of dividends. No Series B Shares dividend has
been declared or paid for the fourth quarter of 2002 nor the first and second
quarters of 2003.
24
Prime Group Realty Trust
Capital Expenditure Disclosure (1)
June 30, 2003
Three Months Three Months Six Months Six Months Year Ended Year Ended
Ended June 30 Ended June 30 Ended June 30 Ended June 30 December 31 December 31
2003 2002 2003 2002 2002 2001
---------------------------- ----------------------------- ------------------------
(dollars in thousands, except per square foot amounts)
From statement of cash flows
Additions to operating properties $8,989 $5,266 $37,101 $9,212 26,456 28,813
Additions to property under
development 2,417 28,334 2,410 68,424 97,956 122,411
Supplemental disclosure (2)
Capital improvements:
Weighted average square feet in
portfolio 12,493,047 12,571,990 12,547,543 12,625,181 12,163,958 12,748,665
Property related capital expenditures 527 526 940 1,228 2,398 2,595
Per weighted average square foot in
portfolio 0.04 0.04 0.07 0.10 0.20 0.20
Tenant improvements and leasing costs: (3)
Office:
Retenanted space
Retenanted square feet 42,355 13,580 135,160 120,654 158,683 346,496
Tenant improvements and leasing costs 1,023 231 1,968 2,569 3,199 10,647
Per square foot leased 24.15 17.02 14.56 21.30 20.16 30.73
Renewal space
Renewal square feet 147,619 3,955 242,473 41,128 255,012 245,013
Tenant improvements and leasing costs 1,247 22 3,804 523 3,868 2,767
Per square foot leased 8.45 5.61 15.69 12.71 15.17 11.29
Industrial:
Retenanted space
Retenanted square feet - - - 154,275 154,275 160,085
Tenant improvements and leasing costs - - - - - 615
Per square foot leased - - - - - 3.84
Renewal space
Renewal square feet - - - - - 424,455
Tenant improvements and leasing costs - - - - - 554
Per square foot leased - - - - - 1.31
---------------------------- ----------------------------- ------------------------
Total capital improvements, tenant
improvements and leasing costs $2,797 $779 $6,712 $4,321 $9,464 $17,178
============================= ============================= ========================
(1) Includes 77 West Xxxxxx and properties previously sold.
(2) Presented on the accrual basis.
(3) Renewals exclude lease terms less than 36 months.
25
Total Office and Industrial Properties and Square Feet Owned
and Joint Venture Development Interests
June 30, 2003
TOTAL PROPERTIES OWNED:
Office Properties
Total CBD Office Owned 5
Total Suburban Office Owned 9
----------------
Total Office Owned 14
Industrial Properties
Total Warehouse/Distribution Industrial Owned 19
Total Manufacturing Industrial Owned 11
----------------
Total Industrial Owned 30
----------------
Total Office and Industrial Owned 44
================
JOINT VENTURE AND DEVELOPMENT INTERESTS:
Square Feet
----------------
00 Xxxx Xxxxxx Xxxxx XXX Office 944,556
Thistle Landing Suburban Office 386,048
----------------
Total Joint Venture and Development Interests 1,330,604
================
26
Property Summary
June 30, 2003 Gross Leasable Area Annualized Base Rent
------------------------------------------------
Annual
Base
Rentable Square Rent per
Square Year Built/ Footage % Leased as of Annualized Square
City Feet Renovated Leased June 30, 2003 Base Rent Foot
----------------------------------------------------------------------------------------
CBD Office Properties
--------------------------------
000 Xxxxx XxXxxxx Xxxxxx Xxxxxxx, XX 760,929 1972/1999 629,661 82.7% $10,664,469 $16.94
000 Xxxxx XxXxxxx Xxxxxx Xxxxxxx, XX 865,410 1914/1956/ 803,219 92.8% 10,973,831 13.66
1982/1991
00 Xxxx Xxxxxx Xxxxxx Xxxxxxx, XX 852,075 1980 183,688 21.6% 2,156,290 11.74
00 Xxxx Xxxxxx Xxxxx Xxxxxxx, XX 944,556 1992 867,852 91.9% 25,446,828 29.32
Bank Xxx Xxxxxx Xxxxxxx, XX 1,502,113 2003 1,014,111 67.5% 24,399,531 24.06
IBM Plaza Chicago, IL 1,364,635 1971 1,221,390 89.5% 20,515,968 16.80
----------- ------------------------------------------------
Subtotal 6,289,718 4,719,921 75.0% 94,156,917 19.95
Suburban Office Properties
--------------------------------
0000 Xxxxxxx Xxxxxx Xxxxxxxxxxx,
XX 50,157 1998 50,157 100.0% 558,504 11.14
Atrium Building Naperville, IL 65,361 1979 57,152 87.4% 783,500 13.71
Brush Hill Office Court Westmont, IL 109,904 1986 109,904 100.0% 1,559,048 14.19
Continental Towers Rolling
Meadows, IL 925,091 1977/1979/1981 714,954 77.3% 10,384,892 14.53
Enterprise Center II Westchester,
IL 62,619 1998/1999 54,270 86.7% 770,260 14.19
Jorie Plaza Oak Brook, IL 191,666 1961/1992 186,493 97.3% 3,372,889 18.09
Narco Xxxxx Xxxxxxxx Xxxxxx Xxxxxxx Xxxx,
XX 64,929 1981 52,674 81.1% 648,274 12.31
Narco Tower Road Schaumburg, IL 50,400 1992 50,400 100.0% 622,944 12.36
Olympian Office Center Lisle, IL 167,042 1989 151,696 90.8% 2,600,502 17.14
Thistle Landing Phoenix, AZ 386,048 2000 259,006 67.1% 3,391,524 13.09
----------- ------------------------------------------------
Subtotal 2,073,217 1,686,706 81.4% 24,692,336 14.64
----------- ------------------------------------------------
Total Office: 8,362,935 6,406,627 76.6%$118,849,254 $18.55
Industrial Properties
--------------------------------
0000 Xxxxx Xxxxxxxxx Xxxxxx Xxxxxxx, XX 17,265 1965/1985 17,265 100.0% $105,904 $6.13
0000 Xxxxxx Xxxxx Xxxxxxxx, XX 43,930 1983 43,930 100.0% 152,095 3.46
000 Xxxxx Xxxx Xxxxx Xxxxxx,
XX 25,200 1974 22,050 87.5% 132,576 6.01
000 Xxxxx Xxxxxxxxx Xxxxx Xxxxxx,
XX 44,575 1997 44,575 100.0% 312,649 7.01
000 Xxxx Xxxx Xx. Xxxxxxx,
XX 62,400 1990 62,400 100.0% 268,320 4.30
Arlington Heights Combined Arlington Hts,
IL 304,506 1978 304,506 100.0% 1,079,204 3.54
0000 Xxxx Xxxx Xxxxxxx, XX 120,004 1990 - 0.0% - -
200 Fullerton Carol Stream,
IL 66,254 1968/1995 66,254 100.0% 358,269 5.41
0000 Xxxxxxx Xxxxxxxx, XX 90,344 1977/1992 90,344 100.0% 414,279 4.59
0000 Xxxxxxx Xxxxxxxx, XX 127,129 1980 103,350 81.3% 492,254 4.76
Narco Elmhurst - 000 Xxxxx Xxxx Xxxxxxxx, XX 30,084 1989 - 0.0% - -
Narco Elmhurst - 000 Xxxxx Xxxx Xxxxxxxx, XX 60,290 1977/1994 60,290 100.0% 288,552 4.79
Narco Elmhurst - 000 Xxxxx Xxxx Xxxxxxxx, XX 40,502 1979 40,502 100.0% 244,527 6.04
Narco Xxxxxxxx-000-00 Xxxxx Xxxx Xxxxxxxx, XX 67,935 1989 67,935 100.0% 378,324 5.57
Narco Xxxxxxxx-0000-00 Xxxxxxx Hillside, IL 79,532 1974/1994 79,532 100.0% 408,894 5.14
Xxx-Xxxxx Xxxxxxxxxx-00000 Gage Franklin Park,
IL 21,935 1965/1993 21,935 100.0% 129,197 5.89
Xxx-Xxxxx Xxxxxxxxxx-00000 Gage Franklin Park,
IL 136,600 1970/1992 136,600 100.0% 601,040 4.40
Prime Aurora Aurora, IL 257,600 2000 161,000 62.5% 523,251 3.25
000 X. Xxxxxxxx Xxxxxxx, XX 152,200 1985 152,200 100.0% 607,709 4.00
Enterprise Center VII- A,P Chicago, IL 462,670 1916/1991-96 462,670 100.0% 1,507,736 3.26
Enterprise Center VIII Chicago, IL 242,199 1916/1991-96 81,859 33.8% 311,771 3.81
Enterprise Center IX- Q,R,S Chicago, IL 162,682 1916/1991-96 107,469 66.1% 329,930 3.07
Enterprise Center X-T,C Chicago, IL 172,775 1916/1991-96 169,659 98.2% 444,790 2.62
Enterprise Center II East Chicago,
IN 169,435 1917/1991-97 28,978 17.1% 89,020 3.07
Enterprise Center III East Chicago,
IN 291,550 1917/1991-97 154,275 52.9% 600,000 3.89
Enterprise Center IV East Chicago,
IN 87,484 1917/1991-97 85,800 98.1% 284,086 3.31
East Chicago Enterprise Center East Chicago,
IN 14,070 1917/1991-97 14,070 100.0% 31,658 2.25
Enterprise Center V Hammond, IN 196,475 1920-1952 196,475 100.0% 464,987 2.37
Enterprise Center VI Hammond, IN 250,266 1920-1952 248,255 99.2% 842,679 3.39
Hammond Enterprise Center Xxxxxxx IN 76,821 1920-1952 70,797 92.2% 193,479 2.73
----------- ------------------------------------------------
Total Industrial 3,874,712 3,094,975 79.9% $11,597,180 $3.75
Total Office 8,362,935 6,406,627 76.6%$118,849,254 $18.55
----------- ------------------------------------------------
Total 12,237,647 9,501,602 77.6%$130,446,432 $13.73
=========== ================================================
27
Office Lease Expiration Schedule
June 30, 2003
Average Annual
Annual Base* Percentage Rent per Net Net Rentable Percentage of
Number of Rent Under of Rentable SF Area Subject Total Leased SF
Year of Lease Expiring Expiring Expiring Represented by to Expiring Represented by
Expiration Leases Leases Leases Expiring Leases Leases (SF) Expiring Leases
---------------- ------------ ------------- ------------ --------------- ------------ ------------------
2003 59 $3,067,753 2.4% $16.41 186,911 3.1%
2004 86 $6,556,027 4.8% $15.24 430,263 7.1%
2005 128 $10,381,890 7.7% $14.54 713,952 11.8%
2006 72 $10,630,674 7.8% $13.98 760,171 12.6%
2007 43 $28,110,309 20.7% $28.12 999,814 16.5%
2008 44 $7,079,870 5.2% $17.37 407,631 6.7%
2009 21 $4,933,019 3.6% $21.22 232,478 3.8%
2010 19 $16,876,065 12.4% $28.15 599,445 9.9%
2011 4 $1,624,463 1.2% $20.06 80,968 1.3%
2012+ 32 $46,340,052 34.2% $28.34 1,635,257 27.2%
---------------- ------------ ------------- ------------ ------------ ------------------
Total/Average 508 $135,600,122 100.0% $22.42 6,046,890 100.0%
============= ============ ============ ==================
*Does not include month-to-month leases
Annual rent is contract rent per lease which may be gross or net depending on
the lease.
See Capital Expenditure Disclosure schedule for historical costs associated
with retenanting space.
28
Industrial Lease Expiration Schedule
June 30, 2003
Net
Rentable
Area
Annual Average Annual Subject
Number Base* Rent per Net to Percentage of
of Rent Under Percentage of Rentable SF Expiring Total Leased SF
Year of Lease Expiring Expiring Expiring Represented by Leases Represented by
Expiration Leases Leases Leases Expiring Leases (SF) Expiring Leases
-------------------- -------- ------------ --------------- ---------------- ---------- ------------------
2003 4 $287,787 2.2% $2.49 115,777 3.7%
2004 9 $1,338,114 10.3% $4.00 334,600 10.8%
2005 8 $1,589,379 12.2% $4.23 375,426 12.1%
2006 13 $2,417,413 18.6% $4.63 521,759 16.8%
2007 4 $771,439 5.9% $3.72 207,333 6.7%
2008 5 $928,052 7.1% $4.37 212,501 6.8%
2009 0 $0 0.0% $0.00 - 0.0%
2010 2 $968,462 7.5% $3.92 246,800 8.0%
2011 4 $1,194,882 9.2% $6.07 196,766 6.3%
2012+ 6 $3,485,957 27.0% $3.91 891,551 28.8%
-------------------- -------- ------------ --------------- ---------- ------------------
Total/Average 55 $12,981,485 100.0% $4.18 3,102,513 100.0%
======== ============ =============== ========== ==================
*Does not include month-to-month leases
Annual rent is contract rent per lease which may be gross or net depending on
the lease.
See Capital Expenditure Disclosure schedule for historical costs associated
with retenanting space.
29
Largest Office Tenants by Square Footage
June 30, 2003 Percent Percent
Total SF of Annualized of
Square Total YTD 2003 Total Gross
Footage Office Gross Office Revenue
Tenant Building Occupied Portfolio Revenue(1) Portfolio PSF
---------------------------- --------------------- ---------- --------- ------------ --------- ----------------
Bank One, N.A. Bank One Center 603,767 7.5% 19,606,600 7.7% $32.47
Jenner & Block, LLC IBM Plaza 338,032 4.2% 12,352,388 4.8% $36.54
IBM Corporation IBM Plaza/Continental
Towers/Narco Tower 332,999 4.2% 8,400,776 3.3% $25.23
Citadel Investment Group, Bank One Center
LLC(2) 274,417 3.4% 11,198,200 4.4% $40.81
ABN AMRO Capital Markets 000 Xxxxx XxXxxxx
Holdings, Inc. Xxxxxx 000,000 3.2% 5,508,938 2.2% $21.54
X.X. Xxxxxxxxx & Sons 00 Xxxx Xxxxxx Xxxxx
Company 241,569 3.0% 12,463,848 4.9% $51.60
Wachovia Securities, Inc. 00 Xxxx Xxxxxx Xxxxx 197,384 2.5% 11,874,356 4.6% $60.16
Accenture 000 Xxxxx XxXxxxx
Xxxxxx 171,887 2.2% 5,206,742 2.0% $30.29
Trizec Properties, Inc. IBM Plaza 163,746 2.1% 6,533,178 2.6% $39.90
Xxxxx Day 00 Xxxx Xxxxxx Xxxxx 134,221 1.7% 6,751,400 2.6% $50.30
---------- --------- ------------ --------- ----------------
2,713,786 34.0% $99,896,426 39.1% $36.81
========== ========= ============ =========
(1) Does not include straight-line rent
(2) For comparative purposes, gross revenue is computed as if this tenant
occupied its space for all of 2003. This tenant took occupancy on April 1, 2003.
30
Largest Industrial Tenants by Square Footage
June 30, 2003
Percent
Total Percent Annualized of
Square of Total YTD 2003 Total Gross
Footage Industrial Gross Office Revenue
Tenant Building Occupied Portfolio Revenue(1) Portfolio PSF
---------------------------- ------------------------------------ ---------- ---------- ----------- --------- ----------
Co-Steel USA Distribution Enterprise Center VII 385,345 9.9% 1,913,984 11.0% $4.97
A.M. Castle & Co. Enterprise Center V 252,595 6.5% 1,002,782 5.8% $3.97
Xxxxxxx Enterprise Center
StrandTek International, Enterprise Center VIII, IX, X
Inc. 230,644 6.0% 1,416,776 8.1% $6.14
East Chicago Enterprise Center
Dynamic Manufacturing 4160-4190 Madison/4300 Madison/ 4211
Madison 184,191 4.8% 1,332,884 7.6% $7.24
Company
Amurol Confections Company 0000 Xxxxxxx Xxxxx 161,000 4.2% 699,230 4.0% $4.34
Electric Coating Enterprise III
Technologies, LLC(2) 154,275 4.0% 837,048 4.8% $5.43
Semblex Corporation 388 Xxxxx Xxxx/000 Xxxxx Xxxx/000-
000 Xxxxx Xxxx 143,917 3.7% 975,782 5.6% $6.78
Standard Motor
Products, Inc. 00000 Xxxx Xxxxxx 136,600 3.5% 790,040 4.5% $5.78
HECO Equipment Management Enterprise Center VI
Services 104,182 2.7% 494,416 2.8% $4.75
Berlin Packaging Corporation Arlington Heights 104,000 2.7% 531,782 3.1% $5.11
---------- ---------- ----------- --------- ----------
1,856,749 47.9% $9,994,724 57.3% $5.38
========== ========== =========== =========
(1) Does not include straight-line rent
(2) For comparative purposes, gross revenue is computed as if this tenant
occupied its space for all of 2003. This tenant took occupancy on June 6, 2003.
31
SIC Code
June 30, 2003
Percent of Percent of
Total Total
Annualized Square
Code Base Rent Feet
------- ---------- ----------
8100 Legal Services 21.40% 13.30%
6000 Depository Institutions 19.40% 19.10%
7300 Business Services 8.20% 7.50%
2700 Printing & Publishing 6.60% 2.40%
6200 Security & Commodity Brokers 5.80% 2.80%
6500 Real Estate 5.00% 2.80%
3400 Fabricated Metal Products 4.80% 14.80%
4800 Communication 4.50% 4.20%
3500 Industrial Machinery & Equipment 3.20% 4.60%
3900 Misc. Manufacturing Industries 2.00% 4.80%
8300 Social Services 1.90% 2.10%
8700 Engineering & Management Services 1.80% 1.00%
9400 Administration of Human Resources 1.80% 1.20%
5900 Misc. Retail 1.10% 0.06%
6400 Insurance Agents, Brokers, & Services 1.00% 0.08%
2000 Food/Kindred Products 0.90% 2.00%
3600 Electronic & Other Electrical Equipment 0.80% 1.20%
7200 Personal Services 0.70% 0.06%
8200 Educational Services 0.70% 0.04%
9300 Finance, Taxation & Monetary Policy 0.50% 0.08%
Other 7.90% 15.88%
---------- ----------
100.00% 100.00%
========== ==========
32
INVESTOR RELATIONS INFORMATION
Inquiries:
Prime Group Realty Trust (NYSE: PGE) welcomes any questions or comments from
shareholders, analysts, investment managers, media or prospective investors.
Please address all inquiries to our Investor Relations Department:
-----------------------------------------------------------------
Xxxxxxx X. Xxxxxxxx
Investor Relations Representative
Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Phone: 000.000.0000
Facsimile: 312.917.1597
E-mail: xxxxxxxxx@xxxx.xxx
Website: xxx.xxxx.xxx
Independent Public Accountants:
Ernst & Young, LLP
Chicago, Illinois
Transfer Agent Services:
LaSalle National Bank
000-000-0000
Research Coverage:
Xxxx Xxxxx Xxxx Xxxxxx, Inc. Xxxxx X. Xxxx 410.454.5018
Xxxxxxx X. Xxxxxxxx 410.454.5175
Stock Exchange Listing:
New York Stock Exchange
Common Shares Symbol: PGE
Preferred Shares Symbol: PGE pb
Our Supplemental Financial Package is available via e-mail. If you would like to
receive this document electronically, please send your e-mail address to:
xxxxxxxxx@xxxx.xxx.Xx addition, please see the Investor Information section of
our website for all financial reports.
33
