Mack-Cali Realty Corporation Announces 6.4 Percent Increase in Third Quarter FFO Per Share

11/04/1999 Category: Earnings

Year-to-Date FFO Per Share Up 8.8 Percent

CRANFORD, NJ--November 4, 1999--Mack-Cali Realty Corporation (NYSE: CLI) today announced its results for the third quarter of 1999. The Company reported that its funds from operations (FFO) per diluted share for the third quarter 1999 increased 6.4 percent over the same period in 1998.

FINANCIAL HIGHLIGHTS
FFO, after adjustment for straight-lining of rents, for the quarter ended September 30, 1999, amounted to $61.3 million, or $0.83 per share, versus $57.3 million, or $0.78 per share, for the quarter ended September 30, 1998, a per share increase of 6.4 percent. For the nine months ended September 30, 1999, FFO, after adjustment for straight-lining of rents, amounted to $182.2 million, or $2.46 per share, versus $158.3 million, or $2.26 per share, for the same period last year, representing a nine-month period increase of 8.8 percent on a per share basis.

Cash available for distribution (CAD) for the third quarter 1999 was impacted by the effects of leasing costs associated with the Companyís successful efforts under its early reletting program. Current quarter CAD equaled $50.4 million, or $0.68 per share, versus $52.1 million, or $0.71 per share, for the same quarter last year, a decrease of 4.2 percent on a per share basis. For the nine months ended September 30, 1999, CAD equaled $157.9 million, or $2.14 per share, versus $141.8 million, or $2.03 per share, for the same period last year, representing a nine-month period increase of 5.4 percent on a per share basis. CAD for both periods in 1999 included $3.2 million of expenditures related to the early releasing of 187,439 square feet of office space at Harborside Financial Center in Jersey City, NJ; such new leases carrying a weighted average term of 10.1 years. Excluding these expenditures, CAD per share for the quarter ended September 30, 1999 would have amounted to $0.73 per share, an increase of 2.8 percent over the same period in 1998. CAD per share for the nine months ended September 30, 1999 would have amounted to $2.18 per share, an increase of 7.4 percent over the same period in 1998.

Total revenues for the third quarter 1999 increased 6.2 percent to $139.0 million from $130.9 million for the same quarter last year. For the nine months ended September 30, 1999, total revenues amounted to $410.9 million, an increase of 14.5 percent over the $358.8 million in total revenues for the same period last year.

Income from operations before minority interest for the third quarter 1999 totaled $40.9 million, or $0.55 per share, versus $39.1 million, or $0.53 per share, for the same quarter last year, an increase of 3.8 percent on a per share basis. Income from operations before minority interest for the nine months ended September 30, 1999 totaled $123.5 million, or $1.66 per share, versus $111.1 million, or $1.57 per share, for the same period last year, an increase of 5.7 percent on a per share basis. Income from operations before minority interest excludes extraordinary items and non-recurring charges.

All per share amounts presented are on a diluted basis; basic per share information is included in the financial tables accompanying this press release.

The Company had 58,390,984 shares of common stock, 8,286,464 common operating partnership units and 229,304 $1,000-face-value preferred operating partnership units (6.75 percent annual rate) outstanding as of quarter end. The outstanding preferred units are convertible into 6,617,721 common operating partnership units. Assuming conversion of all preferred units into common units, the Company had a total of 73,295,169 shares/common units outstanding at September 30, 1999.

As of September 30, 1999, the Company had total indebtedness of approximately $1.58 billion, with a weighted average annual interest rate of 7.07 percent. Mack-Caliís total market capitalization was $3.5 billion at September 30, 1999, with a debt-to-market capitalization ratio of 44.5 percent. The Company had an interest coverage ratio of 3.43 times for the quarter ended September 30, 1999.

Commenting on the results, Mitchell E. Hersh, chief executive officer, said, "Our third quarter results represent yet another reflection of Mack-Cali's consistent growth record. With our impressive leasing successes, occupancy levels and relationship-driven development projects, we are poised for solid results going into year-end and the year 2000."

GROWTH TRANSACTIONS
During the third quarter, Mack-Cali initiated various growth transactions, as follows:

  • The Company acquired in July, 1201 Connecticut Avenue, NW, a 169,549 square-foot office property located in Washington, D.C. for $32.8 million, expanding the Company's growing presence in the Washington, D.C. area to 616,549 square feet.
  • In August, the Company completed redevelopment of 795 Folsom Street, a 183,445 square-foot office building in San Francisco, California, and placed the building in service. The property was acquired from AT&T for approximately $34.3 million in June 1999. The Company simultaneously leased 63,278 square feet of the property back to AT&T. The Company subsequently signed a lease at the property with Rent Net, Inc., a wholly-owned subsidiary of Cendant Corporation, for three floors totaling 95,000 square feet to be occupied this fall. The new lease will increase occupancy of the building from 34 percent to 86 percent.
  • The Company completed in August the redevelopment of 2115 Linwood Avenue, a 68,000 square-foot office building in Fort Lee, New Jersey, and placed the building in service. The building was purchased in February 1998 for approximately $5.2 million.
  • Also in August, the Company acquired 28.1 acres of developable land adjacent to two of the Companyís operating properties in Roseland, New Jersey for approximately $6.1 million. Construction immediately commenced on the land at 105 Eisenhower Parkway, a 220,000 square-foot office property, which is 50 percent pre-leased to Arthur Andersen.
  • Also in August, Ramland Realty Associates, L.L.C. completed redevelopment of One Ramland Road, a 232,000 square-foot office/flex building located in Orangeburg, New York, and placed the property in service. The Company holds a 50 percent interest in the unconsolidated joint venture.
  • In September, the Company completed development and placed in service 12 Skyline Drive, a fully leased 47,000 square-foot office/flex building located in Hawthorne, New York.
  • The Company signed a lease in September with Allstate New Jersey Insurance Company for 23,000 square feet at Mack-Cali Centre IV, bringing the 269,191 square-foot office building located in Paramus, New Jersey to an occupancy level of 94 percent.
  • Also in September, the Company signed a ten-year lease with URS Greiner Woodward Clyde for 90,000 square feet of the six-story 183,000 square-foot office building to be constructed in the Denver Tech Center in Denver, Colorado. The project, which will also include four stories of underground parking, has estimated total costs of approximately $34.0 million and is expected to be completed by first quarter 2001.
  • In early October, we participated along with seven other real estate companies and Kleiner Perkins Caufield and Byers, one of the country's premier venture capital firms, in the formation of Broadband Office, Inc. Mack-Cali received an ownership interest in Broadband Office, which will offer comprehensive telecommunications solutions to businesses nationally.


FINANCING ACTIVITIES
In August 1999, the Company issued $185.3 million of unsecured corporate debt to Teachers Insurance and Annuity Association (TIAA). The proceeds were used to retire an equal amount of flipper mortgage debt, which was held by TIAA and encumbered 43 of Mack-Caliís Westchester properties. The unsecured debt carries the same interest rate of 7.18 percent and has the same maturity date of December 31, 2003 as the previous flipper mortgage debt.

In September, Mack-Cali raised its quarterly dividend by 5.5 percent, from $0.55 per share to $0.58 per share ($2.32 per share on an annualized basis), effective for the quarter ended September 30, 1999.

LEASING INFORMATION
Mack-Cali's wholly-owned in-service portfolio was 96.1 percent leased at quarter-end, compared to 96.3 percent at June 30, 1999.

For the quarter ended September 30, 1999, the Company executed 211 leases totaling 1,216,141 square feet, consisting of 1,049,073 square feet of office space and 167,068 square feet of office/flex space; 404,029 square feet for new leases and 812,112 square feet for lease renewals and other tenant retention transactions.

Accompanying this press release are schedules highlighting the third quarter and year-to-date leasing statistics for both the Companyís wholly-owned and joint ventured properties.

Copies of Mack-Caliís September 30, 1999 Form 10-Q and Supplemental Operating and Financial Data for the third quarter 1999 are available upon request from: Mack-Cali Investor Relations Dept., 11 Commerce Drive, Cranford, NJ 07016 [via phone: (908)497-2001].

ABOUT THE COMPANY
Mack-Cali Realty Corporation is a fully-integrated, self-administered, self-managed real estate investment trust (REIT) providing management, leasing, development, construction and other tenant-related services for its class A real estate portfolio. Mack-Cali owns or has interests in 256 properties, primarily office and office/flex buildings, totaling approximately 28.4 million square feet, located in 12 states and the District of Columbia. The properties, which are primarily located in the Northeast, enable the Company to provide a full complement of real estate opportunities to its diverse base of over 2,400 tenants.

Additional information on Mack-Cali Realty Corporation is available on the Company's website at www.mack-cali.com.

Certain information discussed in this press release may constitute forward-looking statements within the meaning of the Federal Securities law. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to different materially from those projected. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office, office/flex and industrial/warehouse properties; interest rate levels; the availability of financing; and other risks associated with the development and acquisition of properties, including risks that the development may not be completed on schedule, that the tenants will not take occupancy or pay rent, or that development or information on factors which could impact the Company and the statements contained herein, reference should be made to the Company's filings with the Securities and Exchange Commission including quarterly reports on Form 10-Q on Form 8-K, and annual reports on Form 10-L.



Mack-Cali Realty Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)


Quarter Ended September 30,
1999 1998


Base rents $118,086 $112,976
Escalations & recoveries 14,829 14,182
Parking and other 5,112 2,684
Interest income 159 728
Equity in earnings of
unconsolidated joint ventures 834 324


Total revenues 139,020 130,894


Real estate taxes 14,849 13,488
Utilities 11,634 11,300
Operating services 16,258 15,807
General and administrative 5,897 6,118
Depreciation and amortization 22,967 21,213
Interest expense 26,474 23,881


Total expenses 98,079 91,807


Income from operations before
minority interest 40,941 39,087
Minority interest (1) (8,421) (8,375)
Income from operations 32,520 30,712


Net income $32,520 $30,712


PER SHARE DATA:
Income from operations - basic $0.55 $0.53
Net income - basic $0.55 $0.53


Income from operations - diluted $0.55 $0.53
Net income - diluted $0.55 $0.53


Dividends declared $0.58 $0.55


Basic weighted average
shares outstanding 58,679 57,720
Diluted weighted average
shares outstanding 67,113 65,884


(1) Excludes effect of minority interestís share of non-recurring charges and
extraordinary items.
Mack-Cali Realty Corporation
Statements of Funds from Operations and
Cash Available for Distribution
(in thousands, except per share/unit amounts)


Quarter Ended September 30,
1999 1998
Income from operations before
minority interest $40,941 $39,087
Add: Real estate depreciation
and amortization(1) 23,419 21,520
Deduct: Adj. to rental income for
straight-lining of rents(1) (3,076) (3,355)
Funds from operations(2) after adj.
for straight-lining of rents $61,284 $57,252
Deduct non-incremental revenue
generating capital expenditures:
Capital improvements (1,061) (965)
Tenant improvements and leasing
commissions(6) (9,812) (4,165)
Cash available for distribution(6) $50,411 $52,122


Basic weighted average shares/units
outstanding (3) 66,893 65,577
Diluted weighted average shares/units
outstanding(4) 73,731 73,044


Per Share/Unit - Basic(5):
Funds from operations $0.86 $0.81
Cash available for distribution(6) $0.70 $0.73
Per Share/Unit - Diluted:
Funds from operations $0.83 $0.78
Cash available for distribution(6) $0.68 $0.71


Dividend per common share $0.58 $0.55


Dividend payout ratios:
Funds from operations-diluted 69.78% 70.17%
Cash available for distribution-diluted 84.83% 77.08%


(1) Includes FFO adjustments related to Companyís investments in unconsolidated
joint ventures.
(2) Funds from operations for both periods are calculated in accordance with the
National Association of Real Estate Investment Trusts (NAREIT) definition, as
published in March 1995.
(3) Calculated based on weighted average common shares outstanding, assuming
redemption of operating partnership common units into common shares.
(4) Calculated based on shares and units included in basic per share/unit
computation, plus dilutive Common Stock Equivalents (i.e. convertible preferred
units, options and warrants).
(5) Amounts calculated after deduction for distributions to preferred unitholders of
$3,869 and $4,194 for the quarter ended September 30, 1999 and 1998, respectively.
(6) 1999 period includes $3.2 million of expenditures during the period related to the
early releasing of 187,439 square feet of office space at Harborside Financial Center
in Jersey City, NJ; such new leases carry a weighted average term of 10.1 years.
Excluding these expenditures, CAD per share for the period would have amounted to
$0.74(basic) and $0.73(diluted).
Mack-Cali Realty Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)


Nine Months Ended September 30,
1999 1998


Base rents $350,665 $311,753
Escalations & recoveries 46,055 36,897
Parking and other 12,073 7,502
Interest income 629 2,187
Equity in earnings of
unconsolidated joint ventures 1,462 419


Total revenues 410,884 358,758


Real estate taxes 42,900 35,415
Utilities 31,055 28,717
Operating services 50,401 44,128
General and administrative 19,801 18,708
Depreciation and amortization 67,401 56,537
Interest expense 75,793 64,146


Total expenses 287,351 247,651


Income from operations before
minority interest 123,533 111,107
Minority interest (1) (25,927) (23,464)
Income from operations 97,606 87,643
Non-recurring charges (2) (14,336) --
Extraordinary item-loss on
early retirement of debt (3) -- (2,373)


Net income $83,270 $85,270


PER SHARE DATA:
Income from operations - basic $1.67 $1.58
Net income - basic $1.42 $1.54


Income from operations - diluted $1.66 $1.57
Net income - diluted $1.42 $1.53


Dividends declared $1.68 $1.55


Basic weighted average
shares outstanding 58,452 55,391
Diluted weighted average
shares outstanding 67,294 63,093


(1) Excludes effect of minority interestís share of non-recurring charges and
extraordinary items.
(2) Net of minority interestís share in 1999 of $2,122.
(3) Net of minority interestís share of extraordinary item of $297 in 1998.
Mack-Cali Realty Corporation
Statements of Funds from Operations and
Cash Available for Distribution
(in thousands, except per share/unit amounts)


Nine Months Ended September 30,
1999 1998
Income from operations before
minority interest $123,533 $111,107
Add: Real estate depreciation
and amortization(1) 69,139 56,850
Deduct: Adj. to rental income for
straight-lining of rents(1) (10,454) (9,700)
Funds from operations(2) after adj.
for straight-lining of rents $182,218 $158,257
Deduct non-incremental revenue
generating capital expenditures:
Capital improvements (3,094) (1,704)
Tenant improvements and leasing
commissions(6) (21,218) (14,789)
Cash available for distribution(6) $157,906 $141,764


Basic weighted average shares/units
outstanding(3) 67,025 62,580
Diluted weighted average shares/units
outstanding(4) 73,936 69,983


Per Share/Unit - Basic(5):
Funds from operations $2.55 $2.34
Cash available for distribution(6) $2.18 $2.07
Per Share/Unit - Diluted:
Funds from operations $2.46 $2.26
Cash available for distribution(6) $2.14 $2.03


Dividend per common share $1.68 $1.55


Dividend payout ratios:
Funds from operations-diluted 68.17% 68.54%
Cash available for distribution-diluted 78.66% 76.52%


(1) Includes FFO adjustments related to Companyís investments in unconsolidated
joint ventures.
(2) Funds from operations for both periods are calculated in accordance with the
National Association of Real Estate Investment Trusts (NAREIT) definition, as
published in March 1995.
(3) Calculated based on weighted average common shares outstanding, assuming
redemption of operating partnership common units into common shares.
(4) Calculated based on shares and units included in basic per share/unit
computation, plus dilutive Common Stock Equivalents (i.e. convertible preferred
units, options and warrants).
(5) Amounts calculated after deduction for distributions to preferred unitholders of
$11,607 and $12,090 for the nine months ended September 30, 1999 and 1998, respectively.
(6) 1999 period includes $3.2 million of expenditures during the period related to the
early releasing of 187,439 square feet of office space at Harborside Financial Center
in Jersey City, NJ; such new leases carry a weighted average term of 10.1 years.
Excluding these expenditures, CAD per share for the period would have amounted to
$2.23(basic) and $2.18(diluted).
Mack-Cali Realty Corporation
Consolidated Balance Sheets
(in thousands, except share amounts)


September 30, December 31,
ASSETS: 1999 1998
Rental property
Land and leasehold interests $ 548,572 $ 510,534
Buildings and improvements 2,966,769 2,887,115
Tenant improvements 98,577 64,464
Furniture, fixtures and equipment 5,865 5,686
3,619,783 3,467,799
Less-accumulated depreciation
and amortization (241,746) (177,934)
Total rental property 3,378,037 3,289,865


Cash and cash equivalents 1,068 5,809
Investments in unconsolidated
joint ventures 95,457 66,508
Unbilled rents receivable 51,356 41,038
Deferred charges and other assets, net 60,700 39,020
Restricted cash 6,184 6,026
Accounts receivable 5,328 3,928


Total assets $3,598,130 $3,452,194


LIABILITIES AND STOCKHOLDERSí EQUITY:
Senior Unsecured Notes $ 782,706 $ --
Revolving credit facilities 249,956 671,600
Mortgages and loans payable 545,567 749,331
Dividends and distributions payable 42,488 40,564
Accounts payable and accrued expenses 46,359 33,253
Rents received in advance and
security deposits 31,838 29,980
Accrued interest payable 3,238 2,246
Total liabilities 1,702,152 1,526,974
Minority interest of unitholders
in Operating Partnership 458,253 501,313
Commitments and contingencies
Stockholdersí equity:
Preferred stock, 5,000,000 shares
authorized, none issued -- --
Common stock, $0.01 par value,
190,000,000 shares authorized,
58,390,984 and 57,266,137
shares outstanding 584 573
Additional paid-in capital 1,548,413 1,514,648
Dividends in excess of net earnings (106,470) (91,314)
Unamortized stock compensation (4,802) --
Total stockholdersí equity 1,437,725 1,423,907


Total liabilities and
stockholdersí equity $3,598,130 $3,452,194
Mack-Cali Realty Corporation
Leasing Statistics
For The Quarter Ended September 30, 1999


WHOLLY-OWNED PORTFOLIO


SUMMARY OF SPACE LEASED DURING PERIOD


IN-SERVICE PROPERTIES:
Square feet leased at June 30, 1999 26,081,340
Net leasing activity in 3rd quarter 1999 34,549
Leased s.f. from 3rd quarter 1999 acquisitions 200,161
Occupancy adjustment(1) (4,112)


Square feet leased at September 30, 1999 26,311,938


Percent leased at September 30, 1999 96.1%


Square feet of Development/Redevelopment
Properties Not-in-Service as of September 30, 1999 603,303


OFFICE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
New Leases:
First generation space 10 122,506 $37.45 6.7
Second generation space 60 240,592 $21.06 6.0
Total New Leasing 70 363,098 $26.59 6.2


Renewals & extensions 77 430,622 $20.89 4.0
Other retained tenants 40 255,353 $26.10 7.0
Total Leasing 187 1,049,073


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total


Expend. committed-3rd qtr $6,641,216 $4,510,749 $11,151,965
Rentable s.f. leased-3rd qtr 926,567
Cap. ex. committed
per r.s.f. per year $1.34 $0.91 $2.25


(1) Represents the net change in the amount of space leased/expired since the prior
reporting period in excess of 100 percent of the gross rentable area of certain
properties in the portfolio.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs.
OFFICE/FLEX SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)


New Leases:
Second generation space 7 40,931 $15.48 6.8


Renewals & extensions 12 95,874 $13.63 4.6
Other retained tenants 5 30,263 $11.15 5.0
Total Leasing 24 167,068


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total


Expend. committed-3rd qtr $801,521 $336,785 $1,138,306
Rentable s.f. leased-3rd qtr 167,068
Cap. ex. committed
per r.s.f. per year $0.92 $0.39 $1.31


INDUSTRIAL/WAREHOUSE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)


Total Leasing -- -- -- --


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total


Expend. committed-3rd qtr -- -- --


LEASE RENEWALS


Number of
Leases Rentable S.F.


Leases expiring 211 1,181,592
Leases renewed & extended 89 526,496
Other retained tenants 45 285,616
Total leases retained 134 812,112
Percent retained 63.5% 68.7%
Future expirations renewed or
relet (included in totals above) 70 642,159


(1) Equals triple net rent plus common area costs and real estate taxes.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs.

JOINT VENTURE PROPERTIES


SUMMARY OF SPACE LEASED DURING PERIOD


IN-SERVICE PROPERTIES:
Square feet leased at June 30, 1999 685,489
Net leasing activity in 3rd quarter 1999 18,634
Leased s.f. from 3rd quarter 1999 acquisitions 187,000
Occupancy adjustment(1) (1,442)


Square feet leased at September 30, 1999 889,681


Percent leased at September 30, 1999 89.7%


Square feet of Development/Redevelopment
Properties Not-in-Service as of September 30, 1999 904,500


OFFICE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
New Leases:
Second generation space 1 23,394 $23.50 4.0


Other retained tenants 1 10,577 $19.64 4.2
Total Leasing 2 33,971


Capital Expenditures - Second Generation Space(2):
Tenant Leasing
Improvements(3) Commissions Total


Expend. committed-3rd qtr $467,880 $18,715 $486,595
Rentable s.f. leased-3rd qtr 10,577
Cap. ex. per r.s.f. per year $3.40 $0.14 $3.54


(1) Represents the net change in the amount of space leased/expired since the prior
reporting period in excess of 100 percent of the gross rentable area of certain
properties in the portfolio.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs.
Mack-Cali Realty Corporation
Leasing Statistics
For The Nine Months Ended September 30, 1999


WHOLLY-OWNED PORTFOLIO


SUMMARY OF SPACE LEASED DURING PERIOD


IN-SERVICE PROPERTIES:
Square feet leased at December 31, 1998 25,847,457
Net leasing activity year-to-date 130,556
Leased s.f. from 1999 acquisitions 334,124
Occupancy adjustment(1) (199)


Square feet leased at September 30, 1999 26,311,938


Percent leased at September 30, 1999 96.1%


Square feet of Development/Redevelopment
Properties Not-in-Service as of September 30, 1999 603,303


OFFICE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
New Leases:
First generation space 12 144,252 $34.50 7.1
Second generation space 182 643,468 $23.24 6.2
Total New Leasing 194 787,720 $25.30 6.4


Renewals & extensions 224 956,674 $21.87 4.1
Other retained tenants 97 561,201 $25.93 6.7
Total Leasing 515 2,305,595


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total


Expend. committed (y-t-d) $18,220,744 $10,746,421 $28,967,165
Rentable s.f. leased (y-t-d) 2,161,343
Cap. ex. committed
per r.s.f. per year $1.57 $0.92 $2.49


(1) Represents the net change in the amount of space leased/expired since the prior
reporting period in excess of 100 percent of the gross rentable area of certain
properties in the portfolio.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs.

OFFICE/FLEX SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)


New Leases:
First generation space 1 24,240 $10.50 10.0
Second generation space 26 219,643 $12.08 6.9
Total New Leasing 27 243,883 $11.94 7.2


Renewals & extensions 39 327,168 $13.46 4.8
Other retained tenants 11 81,548 $14.00 6.4
Total Leasing 77 652,599


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total


Expend. committed (y-t-d) $3,345,564 $1,226,249 $4,571,813
Rentable s.f. leased (y-t-d) 628,359
Cap. ex. committed
per r.s.f. per year $0.92 $0.34 $1.26


INDUSTRIAL/WAREHOUSE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)


New Leases:
Second generation space 2 49,090 $10.90 3.5


Renewals & extensions 2 3,450 $12.44 1.9
Other retained tenants 2 15,600 $ 9.16 8.8
Total Leasing 6 68,140


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total


Expend. committed (y-t-d) $187,015 $153,287 $340,302
Rentable s.f. leased (y-t-d) 68,140
Cap. ex. committed
per r.s.f. per year $0.59 $0.49 $1.08


(1) Equals triple net rent plus common area costs and real estate taxes.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs.
LEASE RENEWALS


Number of
Leases Rentable S.F.


Leases expiring 623 2,895,778
Leases renewed & extended 265 1,287,292
Other retained tenants 110 658,349
Total leases retained 375 1,945,641
Percent retained 60.2% 67.2%
Future expirations renewed or
relet (included in totals above) 113 973,201
-------------------------------------


JOINT VENTURE PROPERTIES
SUMMARY OF SPACE LEASED DURING PERIOD


IN-SERVICE PROPERTIES:
Square feet leased at December 31, 1998 625,713
Net leasing activity year-to-date 78,410
Leased s.f. from 1999 acquisitions 187,000
Occupancy adjustment(1) (1,442)
Square feet leased at September 30, 1999 889,681
Percent leased at September 30, 1999 89.7%
Square feet of Development/Redevelopment
Properties Not-in-Service as of September 30, 1999 904,500


OFFICE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
New Leases:
First generation space 2 8,930 $18.50 4.0
Second generation space 5 61,588 $28.85 4.7
Total New Leasing 7 70,518 $27.54 4.6


Renewals & extensions 1 2,805 $24.06 5.0
Other retained tenants 5 26,783 $21.86 4.2
Total Leasing 13 100,106


Capital Expenditures - Second Generation Space(2):
Tenant Leasing
Improvements(3) Commissions Total


Expend. committed (y-t-d) $1,628,852 $272,409 $1,901,261
Rentable s.f. leased (y-t-d) 91,176
Cap. ex. per r.s.f. per year $3.93 $0.66 $4.59


(1) Represents the net change in the amount of space leased/expired since the prior
reporting period in excess of 100 percent of the gross rentable area of certain
properties in the portfolio.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs.