UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR15(d)OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF1934OF 1934
For the fiscal year ended December 31, 1997
()1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transactiontransition period from_____to_____from to
Commission File Number 1-12298
REGENCY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 59-3191743
(State ofor other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
121 West Forsyth Street, Suite 200 (904) 356-7000
Jacksonville, Florida 32202 (Registrant's telephone No.)
(Address of principal
executive offices) (zip code)
Securities registered pursuant to Section 12(b)of the Act: None
Common Stock, $.01 par value
(Title of Class)
New York Stock Exchange
(Name of exchange on which registered)
Securities registered pursuant to Section(g)Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES (X) NO ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant was approximately $302,578,000$463,468,086 based on the
closing price on the New York Stock Exchange for such stock on March 16, 1998.10, 1999.
The approximate number of shares of Registrant's Common Stockvoting common stock outstanding
was 24,304,57657,831,620 as of March 16, 1998.10, 1999.
Documents Incorporated by ReferencesReference
Portions of the Registrant's Proxy Statement in connection with its 19981999 Annual
Meeting of Shareholders are incorporated by reference in Part III.
TABLE OF CONTENTS
Form 10-K
Item No. Report Page
- -------- -----------
PART I
1. Business..................................................................1Business...................................................................1
2. Properties................................................................3Properties.................................................................5
3. Legal Proceedings.........................................................6Proceedings.........................................................12
4. Submission of Matters to a Vote of Security Holders.......................6Holders.......................12
PART II
5. Market for the Registrant's Common Equity and Related Shareholder
Matters.......................................................6Matters...................................................................12
6. Selected Consolidated Financial Data......................................8Data......................................14
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations....................................................9Operations.....................................................15
7a. Quantitative and Qualitative Disclosures About Market Risk................22
8. Consolidated Financial Statements and Supplementary Data.................15Data..................22
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................15Disclosure......................................................22
PART III
10 .Directors10. Directors and Executive Officers of the Registrant......................15Registrant........................23
11. Executive Compensation..................................................16Compensation....................................................23
12. Security Ownership of Certain Beneficial Owners and Management..........16Management............24
13. Certain Relationships and Related Transactions..........................16Transactions............................24
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.......168-K.........24
PART I
Item 1. Business
Organization and Shopping Center Business: Regency Realty Corporation'sCorporation ("Regency" or the "Company") principal business is owning, operatingacquires, owns, develops and
developing grocery anchoredmanages neighborhood infill shopping centers in targeted infill markets. As of December
31, 1998, Regency owned, directly or indirectly, 129 properties in the Eastern
Unites States. Infill refers toeastern
half of the United States, containing approximately 14.7 million square feet of
gross leasable area ("GLA").
As of December 31, 1998, Regency had an investment in real estate of
approximately $1.3 billion and approximately 58% of Regency's GLA was located in
Georgia and Florida. Regency's shopping centers within(excluding centers under
development) were approximately 93% leased as of December 31, 1998.
On February 26, 1999, Regency's shareholders approved the merger of Pacific
Retail Trust ("Pacific") into the Company in a targeted investment
market offering sustainable competitive advantages such as barriers to entry
resulting from zoning restrictions, growth management laws, or limited new
competition from development or expansions. The Company is focused on building a
platform of grocery anchored neighborhoodstock for stock transaction (0.48
Regency share for 1 Pacific share). At December 31, 1998, Pacific owned 71
retail shopping centers because grocery
stores provide conveniencethat are operating or under construction containing 8.4
million SF of GLA. The total cost to acquire Pacific is expected to be $1.157
billion based on the value of Regency shares issued, the assumption of $379
million of outstanding debt and other liabilities, and estimated transaction
costs. Pacific's shopping of daily necessitiescenters are located primarily in California and foot traffic for
adjacent local tenants, and should withstand adverse economic conditions.Texas.
The Company, a Florida corporation organized in 1993, commenced operations as a
real estate investment trust (REIT) in 1993 with the completion of its Initial Public
Offering ("IPO"),initial
public offering, and was the successor to the real estate business of The
Regency Group, Inc. which had operated since 1963.
Regency formed Regency Centers, L.P. (RCLP), a limited partnership and a public
registrant, in 1996, and consolidated substantially all of its retail shopping
centers into RCLP during 1998. RCLP is now the primary entity through which
Regency owns its properties and through which Regency intends to expand its
ownership and operation of retail shopping centers. At December 31, 1997, the Company's 89 properties contained 10 million square
feet of gross leasable area ("GLA") and were 92.8% leased. 861998,
Regency owned approximately 96% of the properties
are neighborhood shopping centers,outstanding operating partnership units
of RCLP. Regency, the general partner of RCLP, fully controls the operating and
70 are grocery anchored. The properties
are located primarily in Florida (53%investing decisions and activities of GLA)RCLP, and Georgia (25%accordingly, the following
discussion of GLA). At
December 31, 1997, approximately 9.8%, 5.0%, 3.0%, and 2.5%Regency's business also includes the business of annualized total
rent is received from Publix, Winn-Dixie, Kroger, and Harris Teeter,
respectively. For more specific data and information about the properties owned
by the Company see Item 2. Properties, and Item 7. Management's Discussion and
Analysis, included elsewhere in this Form 10-K. The Company also performs
property management and leasing on approximately 4 million square feet owned by
third parties that generate fees and have the potential for creating synergistic
relationships that lead to additional acquisition, development, management and
leasing opportunities.RCLP.
Operating and Investment Philosophy: The Company'sPhilosophy
Regency's key operating and investment objectives are (1) to generate superior shareholder returns by sustaining above
average annual increases in funds from operations and long term growth in free
and clear cash flow, (2)objective is to create the largestlong-term
shareholder value by:
o growing its high quality real estate portfolio of quality
grocery anchoredgrocery-anchored
neighborhood shopping centers in targetedattractive infill markets,
ino maximizing the Eastern United States, (3) to buildvalue of the strongest possible capital structureportfolio through conservative financial management that will cost effectively provide the
capital to fund the Company's growth strategy, and (4) to put in place the
people and processes necessary to enable the Company to implement its Retail"Retail
Operating System, a system" developed in conjunction with Security Capital
Holdings, S.A. ("SC-USREALTY"), which incorporates research based
investment strategies, and value addedvalue-added leasing and management systems.systems,
and customer-driven development programs, and
o using conservative financial management and Regency's substantial
capital base to access the most cost effective capital to fund
Regency's growth.
Management believes that the key to successful implementationachieving its objective is its single focus
on, and growing critical mass of, quality grocery-anchored neighborhood shopping
centers. In the opinion of management, Regency's premier platform of shopping
centers in targeted markets, its strategies
is to continue to exploit the Company's competitive strengths which include,proprietary research capabilities, its value
enhancing Retail Operating System, its cohesive and experienced management team
its research capabilities, its strong
capital structure,and its access to competitively priced capital enable it to maintain a
competitive advantage over other operators.
Regency believes that ownership of the approximately 30,000 shopping centers
throughout the United States is highly fragmented, with less than 10% owned by
REITs, and that many centers are held by unsophisticated and undercapitalized
owners. Regency has identified approximately 1,000 centers in its client
relationships,target markets
as potential acquisition opportunities, of which less than 10% are owned by
REITs. As a result, Regency believes that an opportunity exists for it to be a
consolidating force in the industry. In addition, Regency believes that through
proprietary demographic research and targeting, its market expertiseportfolio and tenant mix can
be customized for and marketed to national and regional retailers, thereby
producing greater sales and a value-added shopping environment for both retailer
and shopper.
Regency's shopping center properties feature some of the most attractive
characteristics in targeted markets,the industry:
o an average age of 8 years,
o an average remaining grocery-anchor lease term of 14 years, and
o an average grocery-anchor size of 49,000 square feet (43% of the
square footage of the grocery-anchored centers on average).
Grocery-Anchored Infill Strategy
Regency focuses its growing critical
massinvestment strategy on grocery-anchored infill shopping
centers. Infill locations are situated in densely populated residential
communities where there are significant barriers to entry, such as zoning
restrictions, growth management laws or limited availability of quality grocery anchoredsites for
development or expansions. Regency is focused on building a platform of
grocery-anchored neighborhood shopping centers because grocery stores provide
convenience shopping for daily necessities, generate foot traffic for adjacent
"side shop" tenants and should be better able to withstand adverse economic
conditions. By developing close relationships with the leading supermarket
chains, Regency believes it can attract the best "side shop" merchants and
enhance revenue potential.
Research Driven Market Selection
Regency has identified 21 markets in the eastern half of the United States as
target markets. These markets were selected because, in general, they offer
greater growth in population, household income and employment than the national
averages. In addition, Regency believes that it can achieve "critical mass" in
these markets (defined as owning or managing 4 to 5 shopping centers) and that
it can generate sustainable competitive advantages, through long-term leases to
the predominant grocery-anchor and other barriers to entry from competition.
Within these markets, Regency's research staff further defines and selects
submarkets and trade areas based on additional analysis of the above data.
Regency then identifies target properties and their owners (including
development opportunities) within these submarkets and trade areas based on
3-mile radius demographic data and ranks potential properties for purchase. The
properties currently owned by Regency are in submarkets with an average 3-mile
population of 69,000, average household income of $62,000 and projected 5-year
population growth of 12%.
Retail Operating System
Regency's Retail Operating System drives its vibrant
targeted investment marketsvalue-added operating strategy.
Its Retail Operating System is characterized by:
o proactive leasing and management;
o value enhancing remerchandising initiatives;
o Regency's "preferred customer initiative"; and
o a customer-driven development and redevelopment program.
a) Proactive leasing and management
Regency's integrated approach to property management strengthens its leasing and
management efforts. Property managers are an integral component of the
acquisition and integration teams. Thorough, candid tenant interviews by
property managers during acquisition due diligence allow Regency to quickly
assess both problem areas as well as opportunities for revenue enhancement prior
to closing. Property managers are responsible not only for the general
operations of their centers, but also for coordinating leasing efforts, thereby
aligning their interests with Regency's. In addition, Regency's information
systems allow managers to spot future lease expirations and to proactively
market and remerchandise spaces several years in advance of such expirations.
b) Value enhancing remerchandising initiatives
Regency believes that enjoycertain shopping centers under serve their customers,
reducing foot traffic and negatively affecting the tenants located in the
shopping center. In response, Regency is initiating a remerchandising program
directed at obtaining the optimum mix of tenants offering goods, personal
services and entertainment and dining options in each of its shopping centers.
By re-tenanting shopping centers with tenants that more effectively service the
community, Regency expects to increase sales, and therefore the value of its
shopping centers.
c) Preferred customer initiative
Regency has established a preferred customer initiative with dedicated personnel
whose goal is to establish new or strengthen existing strategic relationships
with successful retailers at the national, regional and local levels. Regency
achieves this goal by establishing corporate relationships, negotiating standard
lease forms and working with the preferred customers to match expansion plans
with future availability in Regency's shopping centers. Regency monitors retail
trends and the operating performance of these preferred customers. Management
expects the benefits of the preferred customer initiative to improve the
merchandising and performance of the shopping centers, establish brand
recognition among leading operators, reduce turnover of tenants and reduce
vacancies. Regency currently has identified and is developing relationships with
45 preferred customers, including Radio Shack, GNC, Hallmark Cards, Mailboxes,
Etc. and Starbucks Coffee, and continues to target additional tenants with which
to establish preferred customer relationships.
d) Customer-driven development and redevelopment program
Regency conducts its development and redevelopment program in close cooperation
with its major customers, including Kroger, Publix and Eckerd. Regency uses its
development capabilities to service its customer's growth needs by building or
re-developing modern properties with state of the art supermarket formats that
generate higher returns for Regency under new long-term leases. In 1998, Regency
began development on 21 retail projects, including new developments,
redevelopments and build-to-suits and upon completion, Regency will have
invested $152 million in these projects. During 1997, Regency began development
on 16 retail projects, including new developments, redevelopments and
build-to-suits and upon completion, Regency will have invested $87 million in
these projects. Regency manages its development risk by obtaining signed anchor
leases prior to beginning construction.
Acquisition Track Record
Regency has grown its asset base significantly through acquisitions over the
last several years, acquiring properties totaling $384.3 million in 1998, $395.7
million in 1997 and $107.1 million in 1996. Through these acquisitions, Regency
has diversified geographically from its predominantly Florida-based portfolio
and established a presence in many of its target markets. Upon identifying an
acquisition target, Regency utilizes expertise from all of its functional areas,
including acquisitions, due diligence and property management, to determine the
appropriate purchase price and to develop a business plan for the center and
design an integration plan for the management of the center. Regency believes
that its established acquisition and integration procedures produce higher
returns on its portfolio, reduce risk and position Regency to capitalize on
consolidation in the shopping center industry.
Capital Strategy
Regency intends to maintain a conservative capital structure designed to enhance
access to capital on favorable environment for retail sales.terms, to allow growth through development and
acquisition and to promote future earnings growth, however, neither Regency
Realty Corporation's nor Regency Centers, L.P.'s organizational documents limit
the amount of debt that may be incurred. Limitations have been established
within the covenants of certain loan agreements related to the Partnership's
line of credit and medium term notes.
As of December 31, 1997, the Company has acquired 67 properties at a cost1998, Regency had secured and unsecured debt of $646.5$309.2
million since its IPO in 1993. The Company's total market capitalization
at December 31, 1997 was $1.04 billion. At December 31, 1997, the Company's debt
to total market capitalization was 32.4%. The Company intends to continue its
emphasis on acquiring and developing grocery anchored neighborhood shopping
centers that are the most significant shopping centers serving a targeted market
that offer daily necessities and convenience.
Acquisitions and Developments: On March 7, 1997, the Company acquired, through
its partnership, Regency Retail Partnership, L.P. ("RRLP"), substantially$238.9 million, respectively. Substantially all of the assets of Branch Properties, L.P. ("Branch"), a privately held real estate
firm based in Atlanta, Georgia, for $232.4 million. The assets acquired from
Branch included 100% fee simple interests in 19 operating shopping centers and 1
center under development, and also partnership interests (ranging from 50%Regency's debt is
cross-defaulted, but not cross-collateralized. Pursuant to 93%) in four partnerships with outside investors that owned 4 operating shopping
centers and 2 centers under development. At closing and during 1997, RRLP issued
3,572,427 units of limited partnership interest (the "Units") and the Company
issued 155,797 shares of common stock in exchange for the assets acquired and
the liabilities assumed from Branch. Additional Units and shares of common
stock may be issued during 1998 and 1999 based on the performance of certain
properties, limited to 722,997 Units issued in 1998 and 1,020,061 Units issued
in total during 1998 and 1999.
1
During 1997, in addition to the Branch Properties, the Company acquired 13
grocery anchored shopping centers for $163.3Regency's $300
million representing 1.9 million
SF, two of which are partially operating while undergoing redevelopment. During
1996, the Company acquired 13 grocery anchored shopping centers representing 1.4
million square feet for $107.1 million.
On March 11, 1998, the Company, through RRLP, acquired the real estate assets of
entities comprising the Midland Group ("Midland") consisting of 21 shopping
centers (the "Midland Properties") plus a development pipeline of 11 shopping
centers. Of the 21 centers acquired, 20 are anchored by Kroger. Eight of the
shopping centers included in the development pipeline will be owned through a
joint venture in which the Company will own less than a 50% interest upon
completion of construction. At closing and during 1998, the Company will pay
approximately $230.4 million. Subsequent to 1998, the Company expects to pay
approximately $12.7 million to acquire equity interests in the development
pipeline as the properties reach stabilization. The Company may also be required
to make payments aggregating $10.5 million through the year 2000 contingent upon
increases in net income from existing properties, the development pipeline, and
new properties developed or acquired in accordance with the contribution
agreement.
The Company finances the acquisition of shopping centers through the issuance of
Units in RRLP, the assumption of existing debt, and from its $150 millionunsecured line of credit (the "Line"). On February 24, 1998,(increased to $635 million with the Company enteredmerger of
Pacific Retail Trust), Regency is required to comply, and is complying with
certain financial and other covenants customary with this type of unsecured
financing. These financial covenants include (1) maintenance of minimum net
worth, (2) ratio of total liabilities to gross asset value, (3) ratio of secured
indebtedness to gross asset value, (4) ratio of EBITDA to interest expense, (5)
ratio of EBITDA to debt service and reserve for replacements, and (6) ratio of
unencumbered net operating income to interest expense on unsecured indebtedness.
In addition, Regency may not enter into a commitmentnegative pledge agreement with its lenders to increase the unsecured commitment
amountanother
lender and may not incur other floating rate debt in excess of the Line to $300 million, provide for a $150 million competitive bid
facility, and reduce the25% of gross
asset value without interest rate onprotection. The line is used primarily to
finance the line based upon achieving an
investment grade rating from two agencies of BBB- or higher. Once ratings are
achieved, the interest rate on the Line will be reduced to Libor plus .95%, and
further reduced if the Company receives ratings better than the minimum
requirement from both agencies. During the 1st quarter of 1998, the Company
received investment grade ratings from Moody's of Baa2, and S&P of BBB-. The
Company repays the Line with proceeds from the sale of common stock.
During 1996, the Company entered into a Stock Purchase Agreement (the
"Agreement") with SC-USREALTY. Under the Agreement, the Company agreed to sell
7,499,400 shares of common stock to SC-USREALTY at a price of $17.625 per share
(the fair market value of the Company's Common Stock on the date the terms of
the Agreement were reached) representing total maximum proceeds of approximately
$132 million. During 1996, the Company sold SC-USREALTY 3,651,800 shares for
approximately $64.4 million and during 1997, the Company sold the remaining
3,847,600 shares generating proceeds of approximately $67.8 million all of which
was used to pay down the Line.
As part of the Agreement, SC-USREALTY also has participation rights entitling
them to purchase additional equity in the Company at the same price as that
offered to other purchasers in order to preserve their pro rata ownership in the
Company. In connection with the Units and shares of common stock issued in
exchange for Branch's assets on March 7, 1997, SC-USREALTY acquired 1,750,000
shares for $38.7 million.
On July 11, 1997, the Company sold 2,415,000 shares to the public at $27.25 per
share. In connection with that offering, SC-USREALTY purchased 1,785,000 shares
at $27.25 directly from the Company. On August 11, 1997, the Underwriters
exercised the over-allotment option and the Company issued an additional 129,800
shares to the public and 95,939 shares to SC-USREALTY at $27.25 per share. Total
net proceeds from the sale of common stock to the public and SC-USREALTY of
approximately $117 million were used to reduce the balance of the Line. The
unused commitment currently available under the Line for future acquisition and development activityof real estate, but is approximately $101.9 million atalso available
for general working capital purposes.
Since Regency's initial public offering in 1993, Regency has financed its growth
in part through a series of public and private offerings of Regency equity and
RCLP units totaling, as of December 31, 1997.
Matters1998, approximately $677 million,
including the utilization by RCLP of its units as consideration for
acquisitions. RCLP units (with the exception of Series A preferred units) issued
and owned by limited partners are convertible into Regency common stock on a one
for one basis, and receive quarterly distributions equal to the dividends paid
on each Regency common share.
Risk Factors Relating to the Real Estate Business:Ownership of Regency Common Stock
The Company is subject to certain business risks arising in connection with
owning real estate which include, among others, (1)others:
o the bankruptcy or insolvency of, or a downturn in the business
of, any of its anchormajor tenants (2)could reduce cash flow,
o the possibility that such tenants will not renew their leases as
they expire (3)or renew at lower rental rates could reduce cash flow,
o vacated anchor space affectingwill affect the entire shopping center
because of the loss of the departed anchor tenant's customer
drawing power,
(4)o poor market conditions could create an over supply of space or a
reduction in demand for real estate in markets where the Company
owns shopping centers,
o the Company's rapid growth could place strains on its resources,
o risks relating to leverage, including uncertainty that the Company
will be able to refinance its indebtedness, and the risk of higher
interest rates,
(5)o unsuccessful development activities could reduce cash flow,
o the Company's inability to satisfy its cash requirements for
operations and the possibility that the Company may be required to
borrow funds to meet distribution requirements in order to
maintain its qualification as a REIT,
(6)o potential liability for unknown or future environmental matters
and costs of compliance with the Americans with Disabilities Act,
and (7)o the risk of uninsured losses. Unfavorablelosses, and
o unfavorable economic conditions could also result in the inability
of tenants in certain retail sectors to meet their lease
obligations and otherwise could adversely affect the 2
Company's
ability to attract and retain desirable tenants.
Compliance with Governmental Regulations
Under various federal, state and local laws, ordinances and regulations, an
owner or manager of real estate may be liable for the costs of removal or
remediation of certain hazardous or toxic substances on such property. These
laws often impose liability without regard to whether the owner knew of, or was
responsible for, the presence of the hazardous or toxic substances. The cost of
required remediation and the owner's liability for remediation could exceed the
value of the property and/or the aggregate assets of the owner. The presence of
such substances, or the failure to properly remediate such substances, may
adversely affect the owner's ability to sell or rent the property or borrow
using the property as collateral. Regency has approximately 31 properties that
will require or are currently undergoing varying levels of environmental
remediation. These remediations are not expected to have a material financial
effect on the Company due to financial statement reserves and various
state-regulated programs that shift the responsibility and cost for remediation
to the state.
Competition
The Company believes that the ownership of shopping centers are relatively well positioned to withstand adverse
economic conditions since they typically are anchoredis highly fragmented,
with less than 10% owned by grocery stores, drug
stores and discount department stores that offer day-to-day necessities rather
than luxury goods.
Compliance with Governmental Regulations: The Company like othersREITs. Regency faces competition from other REITs in
the commercialacquisition, ownership and leasing of shopping centers as well as from
numerous small owners. Regency competes for the development of shopping centers
with other REITs engaged in development activities as well as with local,
regional and national real estate industry, is subjectdevelopers. Regency develops properties by
applying its proprietary research methods to numerous environmental lawsidentify development and regulations particularly as they pertain to dry cleaning plants. Although
potential liability could exist for unknown or future environmental matters, the
Company believes that dry cleaning tenants are operating in accordance with
current lawsleasing
opportunities and regulations and has established procedures to monitor these
operations.
Competition: There are numerous shoppingby pre-leasing an average of 85% of a center developers, real estate
companies and other owners of real estate that operate in the Eastern United
States that compete with the Company in seeking retail tenants to occupy vacant
space,before beginning
construction. Regency competes for the acquisition of shoppingproperties through
proprietary research that identifies opportunities in markets with high barriers
to entry and higher-than-average population growth and household income. Regency
seeks to maximize rents per square foot by establishing relationships with
supermarket chains that are first or second in their markets and leasing
non-anchor space in multiple centers to national or regional tenants. There can
be no assurance, however, that other real estate owners or developers will not
utilize similar research methods and fortarget the developmentsame markets and anchor tenants
that Regency targets or that such entities will successfully control these
markets and tenants to the exclusion of new
shopping centers.Regency.
Changes in Policies:Policies
The Company's Board of Directors determines the Company's policies with respect to certain
activities, including its debt capitalization, growth, distributions, REIT
status, and investment and operating policies.strategies. The Board of Directors has no
present intention to amend or revise these policies. However, the Board of
Directors may do so at any time without a vote of the Company's stockholders.
Employees:Employees
The Company's headquarters are located in Jacksonville, Florida. The Company
presently maintains nine offices in which it conducts management and leasing
activities located in Florida, Georgia, North Carolina, Ohio, and Missouri. As
of March 16,December 31, 1998, the Company had approximately 360240 employees and believes
that relations with its employees are good.
Item 2. Properties
The Company's properties summarized by state including their gross
leasable areas (GLA) follows:
Location December 31, 19971998 December 31, 19961997
-------- ----------------- -----------------
# Properties GLA % Leased # Properties GLA % Leased
------------------------------------------ ------------------------------------------------------- --- -------- ------------ --- --------
Florida 46 5,728,347 91.4% 45 5,267,894 91.5%
34 3,958,423 94.7%
Georgia 27 2,737,590 93.1% 25 2,539,507 92.4%
6 592,351 90.5%Ohio 13 1,786,521 93.4% 2 629,920 89.1%
North Carolina 12 1,239,783 98.3% 6 554,332 99.0%
Alabama 5 516,060 99.0% 5 516,080 99.9%
Texas 5 479,900 84.7% - - -
Colorado 5 447,569 89.4% - - -
Tennessee 4 295,179 96.8% 3 260,094 98.6%208,386 98.5%
Virginia 2 197,324 97.7% - - -
Mississippi 2 185,061 97.6% 2 185,061 96.9%
Michigan 2 177,929 81.5% - - -
South Carolina 2 162,056 100.0% 1 79,743 84.3%
0 0 NA
Tennessee 3 208,386 98.5% 0 0 NA
Ohio 2 629,920 89.1% 0 0 NA
Alabama 3 516,080 99.9% 5 516,080 99.7%
Mississippi 2 185,061 96.9% 2 185,061 100.0%
---- -----------Delaware 1 232,752 94.8% - - -
Kentucky 1 205,060 95.6% - - -
Illinois 1 178,600 86.9% - - -
Missouri 1 82,498 99.8% - - -
------------- ---------- ------- ----- ------------ ---------------- ------
Total 129 14,652,229 92.9% 89 9,980,923 92.8%
50 5,512,009 95.0%
==== ======================== ========== ======= ===== ============ ================ ======
3
The following table summarizes the largest tenants occupying the Company's
shopping centers based upon a percentage of total annualannualized base rent exceeding
1%.5% at December 31, 1997:1998:
Summary of Principal Tenants > 1%.5% of Annualized TotalBase Rent
(including Properties Under Development)
% to Company % to Companyof Annualized # of
Tenant SF Owned GLA Rent (1)Base Rent (1) Stores
------ -- --------- -------- -------------------- ---- --------------- ------
Kroger 2,180,363 14.9% $18,496,049 13.8% 36
Publix 1,209,726 12.1% $10,079,6161,439,762 9.8% 289,254,154 6.9% 33
Winn Dixie 687,513 6.9% $5,160,365 5.0% 15
Kroger 359,456 3.6% $3,095,298 3.0%748,329 5.1% 5,131,795 3.8% 16
Blockbuster 214,818 1.5% 3,163,928 2.4% 35
K-Mart 507,645 3.5% 2,615,359 2.0% 6
Harris Teeter 184,563 1.8% $2,576,534 2.5%187,363 1.3% 2,261,650 1.7% 4
Walgreens 177,365 1.8% $2,324,358 2.3% 13206,795 1.4% 2,070,754 1.5% 15
Wal-Mart 486,168 3.3% 1,993,728 1.5% 6
Eckerd 197,569 2.0% $2,163,965 2.1% 20
Blockbuster 122,893218,305 1.5% 1,670,155 1.2% $2,063,840 2.0% 19
K-Mart 341,264 3.4% $1,975,338 1.9% 4
Wal-Mart 393,487 3.9% $1,907,608 1.9% 5
Brunos 119,840 1.2% $1,085,574 1.1%22
A & P 116,666 0.8% 866,593 0.6% 3
AMC Theater 72,616CVS Drugs 103,206 0.7% $1,075,485 1.0%818,721 0.6% 11
Albertsons 55,377 0.4% 630,772 0.5% 1
----------------------
(1) Rent includes annual base rent, percentage rent, and reimbursements for
common area maintenance, real estate taxes, and insurance as of December 31,1997Delchamps 82,845 0.6% 613,122 0.5% 2
The Company's leases have lease terms generally ranging from three to five years
for tenant space under 5,000 square feet. Leases greater than 10,000 square feet
generally have lease terms in excess of five years, mostly comprised of anchor
tenants. Many of the anchor leases contain provisions allowing the tenant the
option of extending the term of the lease at expiration. The Company's leases
provide for the monthly payment in advance of fixed minimum rentals, additional
rents calculated as a percentage of the tenant's sales, the tenant's pro rata
share of real estate taxes, insurance, and common area maintenance expenses, and
reimbursement for utility costs if not directly metered. The following table
sets forth a schedule of lease expirations for the next ten years, assuming that
no tenants exercise renewal options:
Future
Percent of Minimum Percent of
Lease Total Rent Under Total
Expiration Expiring Company Expiring Minimum
Year GLA GLA Leases Rent (2)
---- --- --- ------ --------
(1) 261,091 2.9% $2,697,050 3.0%
1998 798,530 8.8% 9,027,940 10.1%
1999 859,765 9.5% 10,207,450 11.5%
2000 731,694 8.1% 9,241,225 10.4%
2001 719,133 7.9% 8,698,419 9.8%
2002 892,399 9.9% 8,555,657 9.6%
2003 487,519 5.4% 4,386,541 4.9%
2004 318,523 3.5% 2,861,126 3.2%
2005 231,293 2.6% 2,350,900 2.6%
2006 431,671 4.8% 3,926,686 4.4%
2007 435,279 4.8% 3,645,314 4.1%
------------ ------- ----------- -----
10 Yr Total 6,166,897 68.1% $65,598,308 73.7%
------------ ------- ----------- -----
Future
Percent of Minimum Percent of
Lease Total Rent Total
Expiration Expiring Company Expiring Minimum
Year GLA GLA Leases Rent (2)
---- --- --- ------ --------
(1) 88,448 0.7% $941,247 0.8%
1999 933,156 7.5% $10,973,054 9.0%
2000 892,964 7.2% $10,484,173 8.6%
2001 1,163,072 9.3% $13,710,368 11.3%
2002 1,212,519 9.7% $13,155,318 10.8%
2003 992,177 8.0% $10,360,431 8.5%
2004 492,469 4.0% $4,018,968 3.3%
2005 254,877 2.0% $2,644,771 2.2%
2006 598,066 4.8% $4,993,560 4.1%
2007 435,154 3.5% $3,853,728 3.2%
2008 759,825 5.9% $5,311,987 4.3%
--------------------------------------------------------
10 Yr Total 7,822,727 60.7% 80,447,605 65.5%
--------------------------------------------------------
(1) leased currently under month to month rent or in process of renewal
(2) total minimum rent includes current minimum rent and future contractual
rent steps for all properties, but excludes additional rent such as
percentage rent, common area maintenance, real estate taxes and insurance
reimbursements.
See the property table below and also see Item 7, Management's Discussion and
Analysis for further information about the Company's properties.
4
The following table describes the Company's properties owned at December 31, 1997:
Gross
Year Leasable
Year Leasable Percentage GroceryCon- Area Percent Grocery
Property Name Acquired Constructed Areastructed (1) (GLA) Leased GLA(2) Anchor
- ------------- -------- ----------- ---------- ------ --- -------------------------------------------------------------------------------------------------------------------
FLORIDA
Jacksonville /
North Florida
Anastasia Shopping Plaza 1993 1988 102,342 98.3% 48,55595.1% Publix
Bolton Plaza 1994 1988 172,938 97.4% -100.0% --
Carriage Gate 1994 1978 76,833 86.2% -100.0% --
Courtyard 1987(3) 1993 1987 67,794 46.4% 66,446 Albertsons(t)45.8% Albertsons(4)
Ensley Square (j)(5) 1997 1977 62,361 97.1% 47,786100.0% Delchamps
Fleming Island 1998 1994 80,205 98.9% Publix
Highlands Square (6) 1998 1999 226,682 87.1% Publix/Winn-Dixie
Millhopper (3) 1993 1974 84,444 88.3% 37,24484,064 97.0% Publix
Newberry Square 1994 1986 181,006 96.2% 39,795180,524 98.0% Publix
Old St. Augustine Plaza 1996 1990 170,220 100.0% 42,11298.2% Publix
Palm HarborHarbour 1996 1991 168,448 97.1% 45,254171,891 94.6% Publix
Pine Tree Plaza (d)(6) 1997 1998 60,488 95.5% 37,8881999 60,752 94.1% Publix
Regency Court 1997 1992 218,665 99.0% -78.3% --
South Monroe Commons (d) 1996 1998 80,214 82.0% 48,46680,187 97.0% Winn-Dixie
Village Commons (j) 1988 1988 105,895 91.2% -
Tampa / Orlando
Beneva 1998 1987 141,532 97.1% Publix
Bloomingdale Square 1998 1987 267,935 99.0% Publix
Mainstreet Square 1997 1988 107,159 88.8% 56,00090.5% Winn-Dixie
Mariner's Village 1997 1986 117,665 95.0% 45,50094.4% Winn-Dixie
Market Place - St. Petersburg 1995 1983 90,296 100.0% 36,464 Publix
Peachland Promenade 1995 1991 82,082 97.4% 48,89096.5% Publix
Regency Square 1993 1986 341,446 87.3% --
at Brandon 1986 1986 341,751 81.1% -(3)
Seven Springs 1994 1986 162,580 95.1% 35,00093.1% Winn-Dixie
Terrace Walk 1990(3) 1993 1990 50,926 56.8% -40.4% --
Town Square 1997 1986 42,969 100.0% 14,074 Kash 'N Karry40.2% --
University Collections 1996 1984 106,627 97.7% 40,14396.8% Kash N Karry (t)Karry(4)
Village Center-Tampa 1995 1993 181,096 98.7% 36,434181,110 95.5% Publix
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza 1997 1993 130,724 89.4% 44,00091.0% Winn-Dixie
Chasewood Plaza 1992(3) 1993 1986 141,034 90.1% 39,79587.5% Publix
Chasewood Storage 1992(3) 1993 1986 42,810 99.9% ---
East Port Plaza 1997 1991 231,656 99.4% 42,112235,842 94.9% Publix
Martin Downs Village Center 1992Center(3) 1993 1985 121,998 92.0% -121,956 90.9% --
Martin Downs 1993 1998 49,773 94.0% --
Village Shoppes 1992 1988 49,235 91.5% -Shop (3)(6)
Ocean Breeze 1992(3) 1993 1985 111,551 93.2% 36,46483.9% Publix
Ocean East (j)(5) 1996 1997 112,894 77.5% 38,100 Stuarts Fine60.5% Stuart Foods
Tequesta Shoppes 1996 1986 109,766 91.8% 39,79592.9% Publix
Town Center at Martin Downs 1996 1996 64,546 100.0% 56,14693.5% Publix
Wellington Market Place 1995 1990 178,555 91.2% 46,475178,155 94.1% Winn-Dixie
Wellington Town Square 1996 1982 105,150 93.8% 36,46498.2% Publix
Miami / Ft. Lauderdale
Aventura (3) 1994 1974 102,876 92.1% 35,90896.4% Publix
Berkshire Commons 1994 1992 106,434 100.0% 65,537106,534 99.8% Publix
Garden Square 1997 1991 90,258 96.3% 42,11297.1% Publix
North Miami (3) 1993 1988 42,500 100.0% 32,000 Publix
Palm Trails Plaza (d) 1997 1998 76,067 78.3% 59,56295.9% Winn-Dixie
Shoppes @ 104 1998 1990 108,189 95.4% Winn Dixie
Tamiami Trail 1997 1987 110,867 93.8% 42,112100.0% Publix
University Market Place 19901993 1990 129,121 63.1% 63,139 Albertsons(t)73.3% Albertsons(4)
Welleby 1996 1982 109,949 90.0% 46,77993.5% Publix
subtotal 5,002,790 91.5%
(d) property under development or redevelopment
(j) property owned by joint venture------------------------------
Subtotal/Weighted
Average(Florida) 5,728,347 91.4%
------------------------------
GEORGIA
Atlanta
Ashford Place 1997 1993 53,345 100.0% --
Braelin Village (5) 1997 1991 226,522 98.8% Kroger
Briarcliff LaVista 1997 1962 39,201 100.0% --
Briarcliff Village (6) 1997 1990 192,660 89.0% Publix
Buckhead Court 1997 1984 55,227 93.9% --
Cambridge Square 1996 1979 68,725 77.8% --
Cromwell Square 1997 1990 81,826 81.7% --
Cumming 400 1997 1994 126,899 94.8% Publix
Delk Spectrum (3)(5) 1998 1991 100,880 100.0% A&P
Dunwoody Hall 1997 1986 82,525 97.6% A&P
Dunwoody Village (5) 1997 1975 114,657 94.1% Ingles
Loehmann's Plaza 1997 1986 137,635 90.8% --
Lovejoy Station 1997 1995 77,336 98.3% Publix
Memorial Bend 1997 1995 182,778 93.9% Publix
Orchard Square 1995 1987 85,940 94.6% A&P
Paces Ferry Plaza 1997 1987 61,693 91.4% --
Powers Ferry Square 1997 1987 97,809 96.1% Harry's
Powers Ferry Village 1997 1994 78,995 100.0% Publix
Rivermont Station 1997 1996 90,267 100.0% Harris Teeter
Roswell Village (6) 1997 1997 143,980 97.2% Publix
Russell Ridge 1994 1995 98,556 96.6% Kroger
Sandy Plains Village 1996 1992 175,034 94.4% Kroger
Sandy Springs Village 1997 1997 48,245 11.2% --
Trowbridge Crossing (5) 1997 1997 62,558 86.8% Publix
Other Markets
Evans Crossing 1998 1993 83,680 100.0% Kroger
LaGrangeMarketplace(3) 1993 1989 76,327 95.5% Winn-Dixie
Parkway Station (5) 1996 1983 94,290 94.5% Kroger
------------------------------
Subtotal/Weighted
Average(Georgia) 2,737,590 93.1%
------------------------------
OHIO
Cincinnati
Beckett Commons 1998 1995 80,434 100.0% Kroger
Cherry Grove 1998 1997 186,040 93.5% Kroger
Hamilton Meadows 1998 1989 126,251 97.8% Kroger(4)
Hyde Park Plaza (5) 1997 1995 374,743 97.4% Kroger/Winn-Dixie
Shoppes at Mason 1998 1997 80,880 95.1% Kroger
Silverlake 1998 1988 100,245 91.0% Kroger
Westchester Plaza 1998 1988 88,181 100.0% Kroger
Columbus
East Pointe 1998 1993 86,520 100.0% Kroger
Kingsdale (3)(6) 1997 1999 259,011 73.0% Big Bear
North Gate/(Maxtown) 1998 1996 85,100 95.9% Kroger
Park Place 1998 1988 106,832 96.2% Big Bear
Windmiller Plaza 1998 1997 119,192 97.1% Kroger
Worthington 1998 1991 93,092 100.0% Kroger
------------------------------
Subtotal/Weighted
Average(Ohio) 1,786,521 93.4%
------------------------------
NORTH CAROLINA
Asheville
Oakley Plaza 1997 1988 118,727 98.7% Bi-Lo
Charlotte
Carmel Commons 1997 1979 132,648 95.3% Fresh Market
City View 1996 1993 77,550 100.0% Winn-Dixie
Union Square 1996 1989 97,191 100.0% Harris Teeter
Raleigh / Durham
Bent Tree Plaza 1998 1994 79,503 100.0% Kroger
Garner Town Square 1998 1998 221,450 100.0% Kroger
Glenwood Village 1997 1983 42,864 100.0% Harris Teeter
Lake Pine Plaza 1998 1997 87,690 97.6% Kroger
Maynard Crossing 1998 1997 122,813 100.0% Kroger
Southpoint Crossing (7) 1998 1998 101,404 89.4% Kroger
Woodcroft 1996 1984 85,353 100.0% Food Lion
Winston-Salem
Kernersville Marketplace 1998 1997 72,590 100.0% Kroger
------------------------------
Subtotal/Weighted
Average(North Carolina) 1,239,783 98.3%
- Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
5-------------------------------------------------------------------------------------------------------------
ALABAMA
Birmingham
Villages of Trussville (3) 1993 1987 69,280 97.7% Bruno's
West County Marketplace (3) 1993 1987 129,155 100.0% Food World (4)
Montgomery
Country Club (3) 1993 1991 67,622 96.3% Winn-Dixie
Other Markets
Bonner's Point (3) 1993 1985 87,280 98.6% Winn-Dixie
Marketplace - 1993 1987 162,723 100.0% Winn-Dixie
Alexander City (3)
------------------------------
Subtotal/Weighted
Average(Alabama) 516,060 99.0%
------------------------------
COLORADO
Colorado Springs
Cheyenne Meadows (5) 1998 1998 89,085 97.6% King Soopers
Jackson Creek (6)(7) 1998 1999 85,259 89.4% Kroger
Woodman Plaza (6)(7) 1998 1998 103,313 70.4% King Soopers
Denver
Lloyd King Center (5) 1998 1998 83,286 98.4% King Soopers
Stroh Ranch (6)(7) 1998 1998 86,626 95.2% King Soopers
------------------------------
Subtotal/Weighted
Average(Colorado) 447,569 89.4%
------------------------------
TEXAS
Dallas
Bethany Lake (5)(6) 1998 1998 91,674 68.3% Kroger
Creekside (5) 1998 1998 96,816 94.2% Kroger
Preston Brook - Frisco (5)(6) 1998 1998 91,373 77.8% Kroger
Shiloh Springs (7) 1998 1998 81,865 94.0% Kroger
Village Center - Southlake (5) 1998 1998 118,172 88.6% Kroger
------------------------------
Subtotal/Weighted
Average(Texas) 479,900 84.7%
------------------------------
TENNESSEE
Nashville
Harpeth Village (5) 1997 1998 70,091 100.0% Albertsons
Marketplace - 1997 1997 23,500 100.0% --
Murphreesburo (5)
Nashboro Village (7) 1998 1998 86,793 89.1% Kroger
Peartree Village 1997 1997 114,795 100.0% Harris Teeter
------------------------------
Subtotal/Weighted
Average(Tennessee) 295,179 96.8%
------------------------------
VIRGINIA
Brookville Plaza 1998 1991 63,664 97.6% Kroger
Statler Square 1998 1996 133,660 97.7% Kroger
------------------------------
Subtotal/Weighted
Average(Virginia) 197,324 97.7%
------------------------------
MISSISSIPPI
Columbia Marketplace(3) 1993 1988 136,002 98.7% Winn-Dixie
Lucedale Marketplace(3) 1993 1989 49,059 94.7% Delchamps
------------------------------
Subtotal/Weighted
Average(Mississippi) 185,061 97.6%
------------------------------
MICHIGAN
Lakeshore 1998 1996 85,478 99.0% Kroger
Waterford 1998 1998 92,451 65.3% Kroger
------------------------------
Subtotal/Weighted
Average(Michigan) 177,929 81.5%
------------------------------
SOUTH CAROLINA
Merchants Village 1997 1997 79,723 100.0% Publix
Queensborough (5) 1998 1993 82,333 100.0% Publix
------------------------------
Subtotal/Weighted
Average(South Carolina) 162,056 100.0%
-----------------------------
DELAWARE
Pike Creek 1998 1981 232,752 94.8% Acme
KENTUCKY
Franklin Square 1998 1988 205,060 95.6% Kroger
ILLINOIS
Hinsdale Lake Commons 1998 1986 178,600 86.9% Dominick's
MISSOURI
St. Ann Square 1998 1986 82,498 99.8% National
------------------------------
Total Weighted Average 14,652,229 92.9%
==============================
Drug Store & Other
Property Name Store Other Anchors or MajorsTenants
- ------------- -------- ---------------------------------------------------------------------------------------------------------------------------------------------
FLORIDA
Jacksonville /
North Florida
Anastasia Shopping Plaza-- Hallmark, Schmagel's Bagels, Mailboxes
Bolton Plaza Wal-Mart Radio Shack, Payless Shoes, Mailboxes
Carriage Gate TJ Maxx Brueggers Bagels, Bedfellows, Alterations
Courtyard (3) -- Olan Mills, Heavenly Ham, Beauty Warehouse
Ensley Square (j)(5) -- Radio Shack, Hallmark, Amsouth Bank
Fleming Island -- Mail Boxes, Etc., Radio Shack, GNC
Highlands Square (6) Eckerd, Consolidated Stores Hair Cuttery, Rent Way, Precision Printing
Millhopper (3) Eckerd Book Gallery, Postal Svc., Chesapeake Bagel
Newberry Square Kmart H & R Block, Cato Fashions, Olan Mills
Old St. Augustine Plaza Eckerd, Waccamaw Mail Boxes, Etc., Hallmark, Hair Cuttery
Palm HarborHarbour Eckerd, Bealls Mail Boxes, Etc., Hallmark, Meale Norman
Pine Tree Plaza (d)(6) -- Great Clips, CiCi's Pizza, Soupersalad
Regency Court CompUSA, Office Depot H & R Block, Mail Boxes Etc.
Sports Authority Loop Restaurant
South Monroe Commons (d) Eckerd Village Commons (j) Wal-Mart (t), Stein MartRent-A-Center, H & R Block
Tampa / Orlando
Beneva Walgreen's Stride Rite, GNC, Subway
Bloomingdale Square Eckerd, Wal-Mart, Beall's Radio Shack, H&R Block, Hallmark
Mainstreet Square Walgreen's Rent-A-Center, Discount Auto Parts, Norwest
Mariner's Village Walgreen's Supercuts. Pak Mail, Allstate Insurance
Market Place - St. Petersburg Eckerd Mail Boxes, Etc., Republic, Weight Watchers
Peachland Promenade Ace Hardware State Farm, Subway, GNC
Regency Square at Brandon TJ Maxx, AMC, Pak Mail, Lens Crafter
at Brandon (3) Staples, Marshalls MichaelsFamous Footware
Seven Springs Kmart State Farm, Subway, H & R Block
Terrace Walk (3) -- Olan Mills, Norwest, Cellular Mart
Town Square Rite Aid-- Baskin Robbins, Coldwell Banker, Hallmark
University Collections Eckerd Hallmark, Pak Mail, Dockside Imports
Village Center-Tampa Walgreen's, Stein Mart Hallmark, Pak Mail, Mens Warehouse
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza Walgreen's Radio Shack, Baskin Robbins, Dunkin Donuts
Chasewood Plaza (3) Walgreen's Hallmark, GNC, Supercuts
Chasewood Storage (3) --
East Port Plaza Walgreen's, Kmart, Sears HomelifeH & R Block, Pak Mail, Subway
Martin Downs Village CenterCenter(3) Coastal Care Burger King, Hallmark, Barnett Bank
Martin Downs Walgreen's Mailbox Plus, Allstate, Optical Outlet
Village Shop (3)(6)
Ocean Breeze (3) Walgreen's, Coastal Care Martin Downs Village ShoppesMail Boxes, Barnett Bank, World Travel
Ocean Breeze Walgreen'sEast (5) Coastal Care Mail Boxes, Nations Bank, Ocean East (j) Coastal CareCleaners
Tequesta Shoppes Walgreen's Mail Boxes, Etc., Hallmark, Radio Shack
Town Center at Martin Downs -- Mail Boxes, Health Exchange, Champs Hair
Wellington Market Place Walgreen's, United Artists Pak Mail, Subway, Papa John's
Wellington Town Square Eckerd Mail Boxes, Hallmark, Coldwell Banker
Miami / Ft. Lauderdale
Aventura (3) Eckerd, Humana Pak Mail, Bank United, City of Aventura
Berkshire Commons Walgreen's H & R Block, Century 21, Postal Station
Garden Square Eckerd Subway, GNC, Hair Cuttery
North Miami (3) Eckerd
Palm Trails Plaza (d)-- Mail Boxes, Sal's Pizza, Personnel One
Shoppes @ 104 Rite Aid Mail Boxes Etc., GNC, Pet Superstore
Tamiami Trail Eckerd Mail Boxes, Etc., Radio Shack, Pizza Hut
University Market Place Linens Supermarket-- H & R Block, Mail Boxes Etc., Olan Mills
Welleby Walgreen's
(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
6H & R Block, Mail Boxes Plus, Pizza Hut
Subtotal/Weighted
Average(Florida)
Gross
Year Year Leasable Percentage Grocery Grocery
Property Name Acquired Constructed Area (GLA) Leased GLA Anchor
- ------------- -------- ----------- ---------- ------ --- ------
GEORGIA
Atlanta
Ashford Place 1997 1993 53,345 100.0% -
Braelin Village (j) 1997 1991 225,922 95.4% 63,986 Kroger
Briarcliff LaVista 1997 1962 39,201 100.0% -
Briarcliff Village 1997 1990 192,660 94.1% -
Buckhead Court 1997 1984 55,227 95.8% -
Cambridge Square 1996 1979 68,725 91.4% 32,000 Winn-Dixie
Cromwell Square 1997 1990 81,826 83.6% -
Cumming 400 1997 1994 126,899 98.9% 56,146 Publix
Dunwoody Hall 1997 1986 79,974 100.0% 34,632 A&P
Dunwoody Village (j) 1997 1975 114,657 96.3% 26,950 Bruno's
Loehmann's Plaza 1997 1986 137,635 86.5% -
Lovejoy Station 1997 1995 77,336 98.2% 47,955 Publix
Memorial Bend 1997 1995 177,278 83.6% 56,146 Publix
Orchard Square 1995 1987 85,940 89.8% 36,990 A&P
Paces Ferry Plaza 1997 1987 61,693 100.0% -
Powers Ferry Square 1997 1987 97,809 100.0% 7,216 Harry's
Powers Ferry Village 1997 1994 78,995 99.9% 47,955 Publix
Rivermont Station 1997 1996 90,323 98.0% 58,261 Harris Teeter
Roswell Village (d) 1997 1997 144,071 85.4% 37,888 Publix
Russell Ridge 1994 1995 98,556 100.0% 63,296 Kroger
Sandy Plains Village 1996 1992 168,513 75.9% 60,009 Kroger
Sandy Springs Village 1997 1997 48,245 100.0% 41,354 Kroger
Trowbridge Crossing (d) (j) 1997 1997 64,060 86.4% 37,888 Publix
Other Markets
LaGrange Marketplace 1993 1989 76,327 93.6% 46,733 Winn-Dixie
Parkway Station 1996 1983 94,290 91.4% 42,130 Kroger
subtotal 2,539,507 92.4%
NORTH CAROLINA
Charlotte
Carmel Commons 1997 1979 132,647 95.7% 14,300 Fresh Market
City View 1996 1993 77,550 100.0% 44,000 Winn-Dixie
Union Square 1996 1989 97,191 100.0% 33,000 Harris Teeter
Raleigh / Durham
Glenwood Village 1997 1983 42,864 100.0% 27,764 Harris Teeter
Woodcroft 1996 1984 85,353 100.0% 26,752 Food Lion
Asheville
Oakley Plaza 1997 1988 118,727 100.0% 42,317 Bi-Lo
subtotal 554,332 99.0%
(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
7
Property Name Drug
- ------------- Store Other Anchors or Majors
---------- -----------------------
GEORGIA
Atlanta
Ashford Place Pier 1 Imports Baskin Robbin, Mail Boxes Merle Norman
Braelin Village (j)(5) Kmart Baskin Robbins, Mail Boxes Etc.,
Manhattan Bagel
Briarcliff LaVista Drug Emporium Supercuts, Trust Company Bank
Briarcliff Village (6) Eckerd, TJ Maxx, Office Depot Subway, Hair Cuttery, Famous Footware
Buckhead Court -- Hallmark, Bellsouth Mobility
Outback Steakhouse
Cambridge Square -- Papa John's, AAA Mail & Pkg., Wachovia
Cromwell Square CVS Drug First Union, Bellsouth Mobility
Haverty's Furniture Hancock Fabrics
Cumming 400 Big Lots Pizza Hut, Hair Cuttery, Autozone
Delk Spectrum (3)(5) -- Mail Boxes, Etc., GNC, Wolf Camera
Dunwoody Hall Eckerd Texaco, Blimpie, Nations Bank
Dunwoody Village (j)(5) -- Federal Express, Jiffy Lube, Hallmark
Loehmann's Plaza Eckerd, Loehmann's Mail Boxes, Etc., GNC, H & R Block
Lovejoy Station -- State Farm, Pizza Hut, Supercuts
Memorial Bend TJ Maxx Pizza Hut, GNC, H & R Block
Orchard Square CVS Drug Mail Boxes Unlimited, State Farm, Remax
Paces Ferry Plaza -- Chapter 11 Bookstore, Banksouth
Sherwin Williams
Powers Ferry Square Drugs for Less Domino's Pizza, Dunkin Donuts, Supercuts
Powers Ferry Village CVS Drug Mail Boxes, Etc., Southtrust Bank, Blimpies
Rivermont Station CVS Drug Pak Mail, GNC, Wolf Camera
Roswell Village (d)(6) Eckerd, Ace Hardware Hallmark, Pizza Hut, Scholtzyky's
Russell Ridge -- Pizza Hut, Pak Mail, Hallmark
Sandy Plains Village Ace Hardware H & R Block, Mail Boxes Etc., Subway
Sandy Springs Village -- Air Touch
Trowbridge Crossing (d) (j)(5) -- Domino's, Postal Services, Hair Cuttery
Other Markets
LaGrange MarketplaceEvans Crossing -- Subway, Hair Cuttery, Dollar Tree
LaGrangeMarketplace(3) Eckerd Lee's Nails, It's Fashions, One Price Clothing
Parkway Station (5) -- H & R Block, Pizza Hut, Olan Mills
Subtotal/Weighted
Average(Georgia)
OHIO
Cincinnati
Beckett Commons -- Mail Boxes, Etc., Subway, Taco Bell
Cherry Grove CVS Drug, TJ Maxx GNC, Hallmark, Sally Beauty Supply
Hancock Fabrics
Hamilton Meadows Kmart Radio Shack, H&R Block, GNC
Hyde Park Plaza (5) Walgreen's, Micheals Radio Shack, H&R Block, Hallmark
Barnes & Noble, Old Navy
Shoppes at Mason -- Pizza Hut, GNC, Great Clips
Silverlake -- Radio Shack, H&R Block, Great Clips
Westchester Plaza -- Pizza Hut, Subway, GNC
Columbus
East Pointe -- Mail Boxes, Etc., Hallmark, Liberty Mutual
Kingsdale (3)(6) Stein Mart, Limited Hallmark, Sherwin Williams
S&K Menswear Famous Footware
North Gate/(Maxtown) -- Domino's Pizza, GNC, Great Clips
Park Place -- Mail Boxes, Etc., Domino's, Subway
Windmiller Plaza Sears Hardware Radio Shack, Sears Optical, Great Clips
Worthington CVS Drug Little Caesar's, Hallmark, Radio Shack
Subtotal/Weighted
Average(Ohio)
NORTH CAROLINA
Asheville
Oakley Plaza CVS Drug, Western Auto Little Caesar's, Subway
Baby Superstore Life Uniform
Charlotte
Carmel Commons Eckerd, Piece Goods Little Caesar's, Radio Shack, Blimpies
City View CVSVS Drug, Public Library Little Caesar's, Bellsouth, Willie's
Union Square CVS Drug Mail Boxes, Etc., Subway, TCBY
Consolidated Theatres
Raleigh / Durham
Bent Tree Plaza Pizza Hut, Manhattan Bagel, Parcel Plus
Garner Town Square United Artists, Office Max Sears Optical, Friedman's Jewelers
Petsmart H & R Block
Glenwood Village -- Domino's Pizza, Threadbenders II
Lake Pine Plaza -- H & R Block, GNC, Great Clips
Maynard Crossing -- Mail Boxes, Etc., GNC, Hallmark
Southpoint Crossing (7) -- Wolf Camera, GNC, Manhattan Bagel
Woodcroft Eckerd, True Value Asheville
Oakley Plaza CVS Drug Baby Superstore, Western Auto
(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
8
Gross
Year Year Leasable Percentage Grocery Grocery
Property Name Acquired Constructed Area (GLA) Leased GLA Anchor
- ------------- -------- ----------- ---------- ------ --- ------
OHIO
Cincinatti
Hyde Park Plaza 1997 1995 374,743 96.1% 138,592 Kroger,Thriftway
Columbus
Kingsdale (d) 1997 1998 255,177 78.9% 55,000 Big Bear
subtotal 629,920 89.1%Domino's Pizza, Subway, Allstate
Winston-Salem
Kernersville Marketplace -- Mail Boxes, Little Caesar's, Great Clips
Subtotal/Weighted
Average(North Carolina)
ALABAMA
Birmingham
Villages of Trussville 1993 1987 69,300 100.0% 38,380 Bruno's(3) CVS Drug Head Start, Cellular One, Mattress Max
West County Marketplace 1993 1987 129,155 100.0% 42,848 Food World (t)(3) Harco, Wal-Mart Domino's Pizza, GNC, Cato Plus
Montgomery
Country Club 1993 1991 67,622 99.6% 35,922 Winn-Dixie(3) Rite Aid Radio Shack, Subway, Beltone
Other Markets
Bonner's Point 1993 1985 87,280 100.0% 34,700 Winn-Dixie(3) Wal-Mart Subway, Domino's Pizza, It's Fashion
Marketplace - Wal-Mart Domino's Pizza, Subway, Hallmark
Alexander City 1993 1987 162,723 100.0% 47,668 Winn-Dixie
subtotal 516,080 99.9%(3)
Subtotal/Weighted
Average(Alabama)
COLORADO
Colorado Springs
Cheyenne Meadows (5) -- Hallmark, Nail Center, Cost Cutters
Jackson Creek (6)(7) -- Cost Cutters, Polo Cleaners
Woodman Plaza (6)(7) -- Cost Cutters
Denver
Lloyd King Center (5) -- GNC, Cost Cutters, Hollywood Video
Stroh Ranch (6)(7) -- Cost Cutters, Post Net, Dry Clean Station
Subtotal/Weighted
Average(Colorado)
TEXAS
Dallas
Bethany Lake (5)(6) -- Boss Cleaners, Mr. Parcel, Fantastic Sams
Creekside (5) -- Hollywood Video, CICI's,Fantastic Sams
Preston Brook - Frisco (5)(6) -- Coldwell Banker
Shiloh Springs (7) -- GNC, Great Clips, Cardsmart
Village Center - Southlake (5) -- Radio Shack, Papa Johns, Smoothie King
Subtotal/Weighted
Average(Texas)
TENNESSEE
Nashville
Harpeth Village (j) 1997 1998 70,091 95.4% 54,510 Bruno's(5) -- Mail Boxes, Etc., Heritage Cleaners, Cat's
Marketplace - Murphreesburo (j) 1997 1997 23,500 100.0% -
Peartree Village 1997 1997 114,795 100.0% 65,538 Harris Teeter
subtotal 208,386 98.5%
MISSISSIPPI
Columbia Marketplace 1993 1988 136,002 95.8% 41,895 Winn-Dixie
Lucedale Marketplace 1993 1989 49,059 100.0% 35,059 Delchamps
subtotal 185,061 96.9%
SOUTH CAROLINA
Charleston
Merchants Village (d) 1997 1997 79,743 84.3% 37,888 Publix
Total 9,980,923 92.8%
(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
9
Drug
Property Name Store Other Anchors or Majors
- ------------- -------- -----------------------
OHIO
Cincinatti
Hyde Park Plaza Walgreen's Barnes & Noble, Old Navy, Micheals
Columbus
Kingsdale (d) Stein Mart, The Limited, S&K Menswear
ALABAMA
Birmingham
Villages of Trussville CVS Drug
West County Marketplace Eckerd Wal-Mart
Montgomery
Country Club Harco
Other Markets
Bonner's Point Wal-Mart
Marketplace - Alexander City
TENNESSEE
Nashville
Harpeth Village (j)
Marketplace - Murphreesburo (j) Office Max Shoe Carnival
Murphreesburo (5)
Nashboro Village (7) -- Hallmark, Fantastic Sams, Cellular
Peartree Village Eckerd, Office Max Hollywood Video, AAA Auto, Royal Thai
Subtotal/Weighted
Average(Tennessee)
VIRGINIA
Brookville Plaza -- H&R Block, House of Frames, Jenny Craig
Statler Square CVS Drugs, Staples Hallmark, H & R Block, Hair Cuttery
Subtotal/Weighted
Average(Virginia)
MISSISSIPPI
Columbia MarketplaceMarketplace(3) Wal-Mart GNC, Radio Shack, Cato
Lucedale Marketplace Wal-Mart (t)Marketplace(3) Wal-Mart(4) Subway, First Family Financial, Byrd's Cleaners
Subtotal/Weighted
Average(Mississippi)
MICHIGAN
Lakeshore Rite Aid Hallmark, Subway, Baskin Robins
Waterford --
Subtotal/Weighted
Average(Michigan)
SOUTH CAROLINA
Charleston
Merchants Village (d)
(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
-- Mail Boxes, Hollywood Video, Hallmark
Queensborough (5) -- Mail Boxes, Etc., Supercuts, Pizza Hut
Subtotal/Weighted
Average(South Carolina)
DELAWARE
Pike Creek Eckerd, K-mart Radio Shack, H & R Block, TCBY
KENTUCKY
Franklin Square Rite Aid, JC Penney Mail Boxes, Baskin Robbins, Kay Jewelers
ILLINOIS
Hinsdale Lake Commons Ace Hardware Hallmark, McDonalds, Fannie Mae
MISSOURI
St. Ann Square Vic Tanny Great Clips, US Navy, US Marines
Total Weighted Average
10
- -------------------------------------------------------
(1) Or latest renovation
(2) Includes development properties. If development properties are excluded,
the total percentage leased would be 94.6% for Partnership shopping centers
and 94.0% for Company shopping centers.
(3) Company-owned property not owned by the the Partnership.
(4) Tenant owns its own building.
(5) Owned by a partnership with outside investors in which the Partnership
(or the Company in the case of a property referred to in note (3)
above) or an affiliate is the general partner.
(6) Property under development or redevelopment.
(7) Owned by a joint venture in which the Partnership owns less than a 100%
interest.
Item 3. Legal Proceedings
The Company is, from time to time, a party to legal proceedings which arise in
the ordinary course of its business. The Company is not presentlycurrently involved in
any litigation nor, to itsmanagement's knowledge, is any litigation threatened
against the Company, except for routine litigation
arisingthe outcome of which would, in the ordinary course of business such as "slip and fall" litigation
which is expected to be covered by insurance. In the opinion of management of
the Company, such litigation is not expected tomanagement's judgement based
on information currently available, have a material adverse effect on the
business, financial conditionposition or results of operations of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
NoneNo matters were submitted for shareholder vote during the fourth quarter of
1998.
PART II
Item 5.Market5. Market for the Registrant's Common Equity and Related Shareholder
Matters
The Company's common stock is traded on the New York Stock Exchange ("NYSE")
under the symbol "REG". The Company currently has approximately 3,500
shareholders. The following table sets forth the high and low prices and the
cash dividends declared on the Company's common stock by quarter for 19971998 and
1996.1997. All amounts are in thousands except per share data.
1998 1997
1996
----------------------------------- ------------------------------------------------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
----- ----- --------- ----- ----- --------
March 31 $ 27.812 24.750 .44 28.000 25.000 .42
17.500 15.875 .405
June 30 26.687 24.062 .44 28.125 24.875 .42
21.125 16.500 .405
September 30 26.500 20.500 .44 28.250 24.875 .42
22.375 19.250 .405
December 31 23.437 20.250 .44 28.000 24.250 .42 26.250 21.125 .405
On March 7, 1997,The following describes the registrant's sales of unregistered securities
during the periods covered by this report, each sold in reliance on Rule 506 of
the Securities Act.
During 1998, the Company acquired through its partnership, Regency Retail
Partnership, L.P.32 shopping centers from various entities
comprising the Midland Group ("RRLP"Midland"), substantially all. The Company's investment in the
properties acquired from Midland is $236.6 million at December 31, 1998. As
part of the acquisition of Midland, the Company issued 425,982 Operating
Partnership Units ("Units") of Regency Centers, L.P. to the Midland principals.
Units are exchangeable into Regency common stock on a one for one basis. In
addition, during 1999 and 2000, the Company may pay contingent consideration of
up to an estimated $23 million, through the issuance of Units and the payment of
cash. The amount of such consideration, if issued, will depend on the
satisfaction of certain performance criteria relating to the assets acquired
from Midland. Transferors who received cash at the initial Midland closing will
receive contingent future consideration in cash rather than Units. The
acquisition of Midland is discussed further in note 2, Acquisitions of Shopping
Centers, of the notes to the 1998 consolidated financial statements.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred Units") to
Belair Capital Fund LLC in a private placement. The issuance involved the sale
of 1.6 million Series A Preferred Units for $50.00 per unit. The Series A
Preferred Units, which may be called by the Company at par on or after June 25,
2003, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 8.125%. At any time after June 25,
2008, the Series A Preferred Units may be exchanged for shares of 8.125% Series
A Cumulative Redeemable Preferred Stock of the Company at an exchange rate of
one share of Series A Preferred Stock for one Series A Preferred Unit. The
Series A Preferred Units and Series A Preferred Stock are not convertible into
common stock of the Company.
In November 1998, the Company acquired Park Place shopping center in
exchange for 79,466 Units of Regency Centers, L.P. valued at $26 per Unit plus
the assumption of debt secured by Park Place.
The Company acquired 35 shopping centers during 1997 (the "1997 Acquisitions")
for approximately $395.7 million. Included in the 1997 Acquisitions are 26
shopping centers acquired from Branch Properties L.P. ("Branch"), a privately held real estate firm based in Atlanta,
Georgia, for $232.4 million.
The assets acquired from Branch included 100% fee
simple interests in 19 operating shopping centers and 1 center under
development, and also partnership interests (ranging from 50% to 93%) in four
partnerships with outside investors that owned 4 operating shopping centers and
2 centers under development. At closing and during 1997, RRLP issued 3,572,427
units of limited partnership interest (the "Units") andDuring 1998, the Company issued 155,797721,997 additional Units and shares of common
stock in exchangevalued at $18.2 million to Branch as contingent consideration for the
assets acquired andsatisfaction of certain performance criteria of the liabilities assumed from Branch.properties acquired. The
Company expects to issue the remaining contingent consideration, 298,064 Units,
are redeemable on a one-for-one basis
in exchange for shares of common stock. On June 13, 1997, 3,027,080 partnership
units were converted to common stock.during 1999. In connection with the Units and shares of common stock issued to
Branch in exchange for Branch's assets,March 1998, SC-USREALTY acquired 1,750,000435,777 shares during August and December, 1997 at $22.125 per share
in accordance with their rights as provided for in the Agreement.
Additional Units and shares ofto purchase common stock may be issued on the fifteenth day
after the first, second and third anniversaries of the closing (each an
"Earn-Out Closing"), based on the performance of certain properties (the
"Property Earn-Out"), and additional shares of common stock may be issued at the
first and second Earn-Out Closings based on revenues earned from third party
management and leasing contracts (estimated to be approximately $750). The
formula for the Property Earn-Out provides for calculating any increases in
value on a property-by-property basis, based on any increases in net income for
certain properties in the Partnership's portfolio as of February 15 of the year
of calculation. The Property Earn-Out is limited to 722,997 Units at the first
Earn-Out Closing and 1,020,061 Units at all Earn-Out Closings (including the
first Earn-Out Closing).stock. The acquisition of
Branch is discussed further in note 2, Acquisition and DevelopmentAcquisitions of Real Estate,Shopping Centers, of the
notes to the 19971998 consolidated financial statements.
11
The Company intends to pay regular quarterly distributions to its common
shareholders. Future distributions will be declared and paid at the discretion
of the Board of Directors, and will depend upon cash generated by operating
activities, the Company's financial condition, capital requirements, annual
distribution requirements under the REIT provisions of the Internal Revenue Code
of 1986, as amended, and such other factors as the Board of Directors deems
relevant. The Company anticipates that for the foreseeable future cash available
for distribution will be greater than earnings and profits due to non-cash
expenses, primarily depreciation and amortization, to be incurred by the
Company. Distributions by the Company to the extent of its current and
accumulated earnings and profits for federal income tax purposes will be taxable
to shareholders as ordinary dividend income. Distributions in excess of earnings
and profits generally will be treated as a non-taxable return of capital. Such
distributions have the effect of deferring taxation until the sale of a
shareholder's common stock. In order to maintain its qualification as a REIT,
the Company must make annual distributions to shareholders of at least 95% of
its taxable income. Under certain circumstances, which management does not
expect to occur, the Company could be required to make distributions in excess
of cash available for distributions in order to meet such requirements. The
Company currently maintains the Regency Realty Corporation Dividend Reinvestment
and Stock Purchase Plan which enables its shareholders to automatically reinvest
distributions as well as make voluntary cash payments towards the purchase of
additional shares.
The Company declares quarterly cash dividends on the 2.5 million Class B common
shares outstanding. At December 31, 1997,1998 the Class B common was owned by a
single shareholder. During 1997,1998 a distribution of $.5140 per share was paid
quarterly. During 1996, a distribution of $.4961$.5378 per share was paid
quarterly. The 2.5 million Class B common shares are convertible into 2,975,468
common shares, subject to certain ownership limitations.
Under the loan agreement with the lenders of the Company's acquisition and
development line of credit,
distributions may not exceed 95% of Funds from Operations ("FFO") based on the
immediately preceding four quarters. FFO is defined in accordance with the
NAREIT definition as described under Item 7., Management's Discussion and
Analysis. Also in the event of any monetary default, the Company will not make
distributions to shareholders.
Item6.Selected
Item 6. Selected Consolidated Financial Data
(in thousands, except per share data)data and number of properties)
The following table sets forth Selected Financial Data on a historical basis for
the five years ended December 31, 1997,1998, for the Company and the commercial real
estate business of The Regency Group, Inc. ("TRG" or "Regency Properties"), the
predecessor of the Company. This information should
be read in conjunction with the financial statements of the Company (including
the related notes thereto) and Management's Discussion and Analysis of the
Financial Condition and Results of Operations, each included elsewhere in this
Form 10-K. TheThis historical Selected Financial Data for Regency Realty Corporation for the four year period
ended December 31, 1997 and for the period from July 9, 1993 to December 31,
1993, havehas been derived from the
audited financial statements.
The historical
Selected Financial Data for the Regency Properties as of November 5, 1993 has
been derived from audited financial statements.
12
Item 6. Selected Consolidated Financial Data (in thousands, except per share data) - (continued)
Regency
Regency Realty Corporation Properties
------------------------------------------------------------------- -------------
Period Ended Period Ended
Year Ended December 31, Dec. 31, Nov. 5,
----------------------------------------------------1998 1997 1996 1995 1994 1993 1993
---- ---- ---- ---- ----
----
(note 1)
Operating Data:
Revenues:
Rental revenues $89,306$ 130,487 88,855 43,433 31,555 25,673 3,094 7,375
Management, leasing and
brokerage fees 11,863 8,448 3,444 2,426 2,332
572 2,247
Equity in income of investments
in real estate partnership investmentspartnerships 946 33 70 4 17
3 18------------- ----------- ----------- ----------- ------------
------------ ------------- -------------
Total revenues 97,787143,296 97,336 46,948 33,985 28,022
3,669 9,640------------- ----------- ----------- ----------- ------------ ------------ ------------- -------------
Operating expenses:
Operating, maintenance and real
estate taxes 30,844 22,904 12,065 8,683 7,140
862 3,365
General and administrative 15,064 9,964 6,048 4,894 4,531
736 2,835
Depreciation and amortization 25,046 16,303 8,059 5,854 5,266
679 1,564------------- ----------- ----------- ----------- ------------
------------ ------------- -------------
Total operating expenses 70,954 49,171 26,172 19,431 16,937
2,277 7,764------------- ----------- ----------- ----------- ------------ ------------ ------------- -------------
Interest expense, net of income 26,829 18,667 10,811 8,969 5,701
496 3,937------------- ----------- ----------- ----------- ------------ ------------ ------------- -------------
Income before minority interests 29,949and sale of
real estate investments 45,513 29,498 9,965 5,585 5,384
895 (2,061)Gain on sale of real estate investments 10,726 451 - - -
------------- ----------- ----------- ----------- ------------
Income before minority interests 56,239 29,948 9,965 5,585 5,384
Minority interest of redeemableexchangeable
operating partnership units (1,826) (2,042) - - - - -
Minority interest of limited partners (464) (505) - - -
- 126
Equity in loss of unconsolidated
partnershipMinority interest preferred unit distribution (3,359) - - - -
- (111)
Other non-recurring income, net - - - - - 3,291------------- ----------- ----------- ----------- ------------
------------ ------------- -------------
Net income 50,590 27,402 9,965 5,585 5,384
895 1,245
Preferred stock dividends - - 58 591 283
- -
----------- ----------- ------------
------------ ------------- -------------============= ===========
Net income for common stockholders $ 50,590 $27,402 9,907 4,994 5,101
895 1,245============= =========== =========== =========== ============
============ ============= =============
Earnings per share (EPS):share:
Basic $1.28$ 1.80 1.28 0.82 0.75 0.80
0.14 n/a============= =========== =========== =========== ============
Diluted $1.23$ 1.75 1.23 0.82 0.75 0.80
0.14 n/a============= =========== =========== =========== ============ ============ ============= =============
Other Data:
Common stock outstanding including
Class B common if converted 28,464 26,967 13,590 9,704 6,455
6,333 n/a
RedeemableExchangeable operating partnership units
outstanding 1,361 574 5929 - - - -
outstanding to minority interests
Company owned gross leasable area 14,652 9,981 5,512 3,981 3,182 2,337 1,145
Number of properties (at end of period) 129 89 50 36 30
23 8Ratio of earnings to fixed 2.1 2.3 1.8 1.5 1.7
charges
Balance Sheet Data:
Real estate investments at cost $ 1,250,332 $834,402 393,403 279,046 217,539
152,821 -
Total assets 1,240,107 826,849 386,524 271,005 214,082
153,653 -
Total debt 548,126 278,050 171,607 115,617 107,998
53,521 -
Stockholders' equity 550,741 513,627 206,726 147,007 101,760 97,416 -
Note 1: Such Combined Financial Statements have been prepared to reflect the
historical combined operations of the Regency Properties associated with the
ownership of the properties and the management, leasing, acquisition,
development and brokerage business acquired by the Company from TRG on November
5, 1993 in connection with the Company's Initial Public Offering ("IPO")
completed November 5, 1993.
13
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements and Notes thereto of Regency Realty
Corporation (the("Regency" or "Company") appearing elsewhere herein. Certain statements madewithin.
Organization
- ------------
The Company is a qualified real estate investment trust ("REIT") which began
operations in 1993. The Company invests in real estate primarily through its
general partnership interest in Regency Centers, L.P., ("RCLP" or "Partnership")
an operating partnership in which the Company currently owns approximately 96%
of the outstanding common partnership units ("Units"). Of the 129 properties
included in the following discussion may constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements involve unknown risks and uncertainties of business and economic
conditions pertaining to the operation, acquisition,Company's portfolio at December 31, 1998, 109 properties were
owned either fee simple or development of shopping
centers including the retail business sector, and may cause actual results ofthrough partnerships interests by RCLP. At December
31, 1998, the Company had an investment in the future to significantly differ from any future results that
may be impliedreal estate, at cost, of
approximately $1.3 billion of which $1.1 billion or 86% was owned by such forward-looking statements.RCLP.
Shopping Center Business
- ------------------------
The Company's principal business is owning, operating and developing grocery
anchored neighborhood infill shopping centers in the Eastern Unites States.centers. Infill refers to shopping
centers within a targeted investment market offering sustainable competitive
advantages such as barriers to entry resulting from zoning restrictions, growth
management laws, or limited new competition from development or expansions. The
Company's properties summarized by state and in order by largest holdings
including their gross leasable areas (GLA) follows:
Location December 31, 19971998 December 31, 19961997
-------- ----------------- -----------------
# Properties GLA % Leased # Properties GLA % Leased
------------------------------- --------------------------------------------- --- -------- ------------ --- --------
Florida 46 5,728,347 91.4% 45 5,267,894 91.5%
34 3,958,423 94.7%
Georgia 27 2,737,590 93.1% 25 2,539,507 92.4%
6 592,351 90.5%Ohio 13 1,786,521 93.4% 2 629,920 89.1%
North Carolina 12 1,239,783 98.3% 6 554,332 99.0%
Alabama 5 516,060 99.0% 5 516,080 99.9%
Texas 5 479,900 84.7% - - -
Colorado 5 447,569 89.4% - - -
Tennessee 4 295,179 96.8% 3 260,094 98.6%208,386 98.5%
Virginia 2 197,324 97.7% - - -
Mississippi 2 185,061 97.6% 2 185,061 96.9%
Michigan 2 177,929 81.5% - - -
South Carolina 2 162,056 100.0% 1 79,743 84.3%
Delaware 1 232,752 94.8% - - NA
Tennessee 3 208,386 98.5%-
Kentucky 1 205,060 95.6% - - NA
Ohio 2 629,920 89.1%-
Illinois 1 178,600 86.9% - - NA
Alabama 5 516,080 99.9% 5 516,080 99.7%
Mississippi 2 185,061 96.9% 2 185,061 100.0%-
Missouri 1 82,498 99.8% - - -
------------- ---------- ------- ------------ --------- ------
Total ----- ---------- ---- ----- --------- ------129 14,652,229 92.9% 89 9,980,923 92.8%
50 5,512,009 95.0%
================== ========== ==== ============ ============ ========= ======
The Company is focused on building a platform of grocery anchored neighborhood
shopping centers because grocery stores provide convenience shopping of daily
necessities, foot traffic for adjacent local tenants, and should withstand
adverse economic conditions. The Company's current investment markets have
continued to offer strong stable economies, and accordingly, the Company expects
to realize growth in net income as a result of increasing occupancy in the
portfolio, increasing rental rates, development and acquisition of shopping
centers in targeted markets, and redevelopment of existing shopping centers. At
December 31, 1997, 51 of the Company's shopping centers are anchored by the 1st
or 2nd most dominant or preferred grocery store in its particular market as
measured by total market sales, based upon internal research. The
following table summarizes the four largest grocery tenants occupying the
Company's shopping centers the average remaining years on their current leases, and their average
annual sales per square foot in the stores that they occupy:
Average Regency All Corporate
Grocery Number of % of % of Remaining Lease Store Stores
Anchor Stores Total GLA Annual Rent Term Sales PSF Sales PSF*
------ --------- ----------- ---- --------- - ----------
Publix 28 12.1% 9.8% 12 yrs $509 $416
Winn Dixie 15 6.9% 5.0%at December 31, 1998:
Grocery Number of % of % of Annualized Avg Remaining
Anchor Stores Total GLA Base Rent Lease Term
------- --------- --------- --------------- -------------
Kroger 36 14.9% 13.8% 19 yrs
Publix 33 9.8% 6.9% 13 yrs
Winn-Dixie 16 5.1% 3.8% 13 yrs
Harris Teeter 4 1.3% 1.7% 11 yrs $284 $278
Kroger 6 3.6% 3.0% 10 yrs $427 $403
Harris Teeter 4 1.8% 2.5% 16 yrs $433 $362
--Corporate information pertains to all stores operated by the
tenant and was acquired from publicly available data.
14
Acquisition and Development of Shopping Centers
- -----------------------------------------------
During 1998, the Company acquired 31 shopping centers fee simple for
approximately $355.9 million and also invested $28.4 million in 12 joint
ventures ("JV Properties"), for a total investment of $384.3 million in 43
shopping centers ("1998 Acquisitions"). Included in the 1998 Acquisitions are 32
shopping centers acquired from various entities comprising the Midland Group
("Midland"). Of the 32 Midland centers, 31 are anchored by Kroger, and 12 are
owned through joint ventures in which the Company's ownership interest is 50% or
less. The Company's investment in the properties acquired from Midland is $236.6
million at December 31, 1998. The Company expects to acquire all of the
interests in two of the JV Properties for approximately $20.3 million during
1999 which will increase its total investment in the Midland properties to
$256.9 million. In addition, during 1999 and 2000, the Company may pay
contingent consideration of up to an estimated $23 million, through the issuance
of Partnership units and the payment of cash. The amount of such consideration,
if issued, will depend on the satisfaction of certain performance criteria
relating to the assets acquired from Midland. Transferors who received cash at
the initial Midland closing will receive contingent future consideration in cash
rather than units.
The Company acquired 35 shopping centers during 1997 (the "1997 Acquisitions"),
5 of which
for approximately $395.7 million. Included in the 1997 Acquisitions are partially operating while undergoing redevelopment scheduled for
completion during 1998. The Company also completed the development of 326
shopping centers and began development on 2 shopping centers scheduled for completion
during 1998. The following summarizes the locations of the Company's 1997
acquisition and development activity:
Completed In Process Completed In Process GLA at
Location Acquisitions Redevelopments Development Development Completion
-------- ------------ -------------- ----------- ----------- ----------
Florida 10 1 - 2 1,329,093
Georgia 19 2 - - 1,947,156
North Carolina 3 - - - 294,238
South Carolina 1 1 - - 79,743
Tennessee - - 3 - 208,386
Ohio 2 1 - - 629,920
--------- -------- -------- -------- ----------
Total 35 5 3 2 4,488,536
========= ======== ======== ======== ==========
GLA 4,123,869 603,819 208,386 156,281
========= ======== ======== ========
Total Investment
at Completion
(in thousands) $373,858 $53,399 $32,183 $15,794 $ 421,835
========= ======== ======== ======= =========
On March 7, 1997, the Company acquired through its partnership, Regency Retail
Partnership, L.P. ("RRLP"), substantially all of the assets offrom Branch Properties L.P. ("Branch"), a privately held real estate firm based in Atlanta,
Georgia, for $232.4 million.
The assets acquired from Branch included 100% fee
simple interests in 19 operating shopping centers and 1 center under
development, and also partnership interests (ranging from 50% to 93%) in four
partnerships with outside investors that owned 4 operating shopping centers and
2 centers under development. The Company also assumed the third party property
management contracts of Branch on approximately 3 million SF of shopping center
GLA that generate management fees and leasing commission revenues.
At closing and during 1997, RRLP issued 3,572,427 units of limited partnership
interest (the "Units") andDuring 1998, the Company issued 155,797 shares of common stock in
exchange for the assets acquired and the liabilities assumed from Branch. The
Units are redeemable on a one-for-one basis in exchange for shares of common
stock. On June 13, 1997, 3,027,080 partnership units were converted to common
stock. The purchase price of Branch, as recorded in the Company's financial
statements, includes approximately $96.4 million for Units and common stock
issued (based upon $26.85, the fair market value of the Company's common stock
on the date the acquisition was publicly announced), $27.3 million in cash, $7.8
million for transaction costs and to establish reserves, and $97.2 million of
assumed debt.
Additional721,997 additional Units and shares of common
stock may be issued onvalued at $18.2 million to Branch as contingent consideration for the
fifteenth day
after the first, second and third anniversariessatisfaction of certain performance criteria of the closing (each an
"Earn-Out Closing"), based onproperties acquired. The
Company expects to issue the performanceremaining contingent consideration, 298,064 Units,
during 1999.
Results from Operations
- -----------------------
Comparison of certain properties (the
"Property Earn-Out")1998 to 1997
Revenues increased $46.0 million or 47% to $143.3 million in 1998. The increase
was due primarily to the 1998 and 1997 Acquisitions providing increases in
revenues of $37.5 million during 1998. At December 31, 1998, the real estate
portfolio contained approximately 14.7 million SF and was 92.9% leased. Minimum
rent increased $33.3 million or 47%, and additional shares of common stock may be issued atrecoveries from tenants increased $7.5
million or 45%. On a same property basis (excluding the first1998 and second Earn-Out Closings based1997
Acquisitions, and the office portfolio sold during 1998) gross rental revenues
increased $3.4 million or 6.7%, primarily due to higher base rents. Revenues
from property management, leasing, brokerage, and development services (service
operation segment) provided on revenues earned from third party
management and leasing contracts (estimated to be approximately $750). The
formula for the Property Earn-Out provides for calculating any increases in
value on a property-by-property basis, based on any increases in net income for
certain properties in the Partnership's portfolio as of February 15 of the year
of calculation. The Property Earn-Out is limited to 722,997 Units at the first
Earn-Out Closing and 1,020,061 Units at all Earn-Out Closings (including the
first Earn-Out Closing).
During 1997, in addition to the Branch Properties,not owned by the Company acquired 13
grocery anchored shopping centers for $163.3were $11.9
million for cash including debt
assumed of $31.4in 1998 compared to $8.4 million representing 1.9 million SF, two of which are partially
operating while undergoing redevelopment. During 1996, the Company acquired 13
grocery anchored shopping centers representing 1.4 million square feet for
$107.1 million (the "1996 Acquisitions"). These acquisitions are discussed
further in note 2, Acquisition and Development of Real Estate, of the notes to
the 1997 consolidated financial statements.
15
Liquidity and Capital Resources
Net cash provided by operating activities was $43.0 million, $16.0 million, and
$15.9 million for the years ended December 31, 1997, 1996 and 1995,
respectively, and is the primary source of funds to pay dividends and
distributions on outstanding common stock and Units, maintain and operate the
shopping centers, and pay interest and scheduled principal reductions on
outstanding debt. Changes in net cash provided by operating activities is
further discussed below under results from operations. Net cash used in
investing activities was $188.5 million, $109.8 million, and $61.5 million,
during 1997, 1996, and 1995, respectively, as discussed above in Acquisitions of
Shopping Centers. Net cash provided by financing activities was $153.8 million,
$98.7 million, and $46.2 million during 1997, 1996, and 1995, respectively.
The Company paid dividends and distributions of $37 million, $16.2 million, and
$10.8 million, during 1997, 1996, and 1995, respectively (see Funds from
Operations below for further discussion on payment of dividends). In January 1997, the Companyincrease due primarily to
increased its quarterly common dividendbrokerage fees and distribution per
Unit to $.42 per share vs. $.405 per shareincreased activity in 1996construction and during 1997 issued
additional common shares and Units as discussed below. In Januarydevelopment
for third parties. During 1998, the Company increased its quarterly common dividendsold four office buildings and distribution per Unit to
$.44 per share, and accordingly, total dividends and distributions expected to
be paid by the Company during 1998 will increase substantially over 1997.
The Company's total indebtedness at December 31, 1997 and 1996 was approximately
$278.0a
parcel of land for $30.7 million, and $171.6 million, respectively,recognized a gain on the sale of which $199.1 million and
$94.1 million had fixed interest rates averaging 7.3% and 7.6%, respectively.
The weighted average interest rate on total debt at December 31, 1997 and 1996
was 7.3% and 7.5%, respectively. During 1997, the Company, as part$10.7
million. As a result of its
acquisition activities, assumed approximately $142.4 million of debt, as
compared to $3.9 million during 1996. The cash portion of the purchase price for
the 1997 Acquisitions was financed fromthese transactions the Company's $150 million linereal estate portfolio
is comprised entirely of credit (the "Line"). At December 31, 1997 and 1996, the balance of the Line was
$48.1 million and $73.7 million, respectively.retail shopping centers. The Line has a variable rate of
interest equal to the London Inter-bank Offered Rate ("Libor") plus 150 basis
points.
On February 24, 1998, the Company entered into an agreement with the various
banks that provide the Line to increase the unsecured commitment amount to $300
million, provide for a $150 million competitive bid facility, and reduce the
interest rate on the line based upon achieving an investment grade rating of
BBB- or higher from Standard & Poors (S&P) and a Baa3 rating or higher from
Moody's Investor Service (Moody's). Once ratings are achieved, the interest rate
on the Line will be reduced to Libor plus .95%, and further reduced if the
Company receives ratings better than the minimum requirement from both agencies.
During the 1st quarter of 1998, the Company received investment grade ratings
from Moody's of Baa2, and a rating of BBB- from S&P.
During 1996, the Company entered into a Stock Purchase Agreement (the
"Agreement") with SC-USREALTY. Under the Agreement, the Company agreed to sell
7,499,400 shares of common stock to SC-USREALTY at a price of $17.625 per share
(the fair market value of the Company's Common Stock on the date the terms of
the Agreement were reached) representing total maximum proceeds of approximately
$132 million. During 1996, the Company sold 3,651,800 shares to SC-USREALTY for
approximately $64.4 million and the proceeds were used to pay down the Line.
During March and June, 1997, the Company issued the remaining 3,847,600 shares
to SC-USREALTY generating proceeds of approximately $67.8 million which were
used to pay down the Line, completing the issuance of common stock under the
original commitment.
As part of the Agreement, SC-USREALTY also has participation rights entitling
them to purchase additional equity in the Company at the same price as that
offered to other purchasers in order to preserve their pro rata ownership in the
Company. In connection with the Units and shares of common stock issued in
exchange for Branch's assets on March 7, 1997, SC-USREALTY acquired 1,750,000
shares during August and December, 1997 at $22.125 per share (the fair market
value of the Company's common stock on the date the agreement to acquire Branch
was entered into) in accordance with their rights. For further discussion of the
Branch acquisition or the Agreement, see notes 2 and 6, to the Company's 1997
consolidated financial statements.
16
On July 11, 1997, the Company sold 2,415,000 shares to the public at $27.25 per
share. In connection with that offering, SC-USREALTY purchased 1,785,000 shares
at $27.25 directly from the Company. On August 11, 1997, the Underwriters
exercised the over-allotment option and the Company issued an additional 129,800
shares to the public and 95,939 shares to SC-USREALTY at $27.25 per share. Total
net proceeds from the sale of common stock to the public and SC-USREALTY of
approximately $117 million
were used to reduce the balance of the Line.line of credit.
Operating expenses increased $21.8 million or 44% to $71.0 million in 1998.
Combined operating and maintenance, and real estate taxes increased $7.9 million
or 35% during 1998 to $30.8 million. The unused commitment currently available underincreases are due to the Line for future acquisition1998 and development activity is approximately $101.91997
Acquisitions generating operating and maintenance expenses and real estate tax
increases of $9.4 million at December 31, 1997.
The Company qualifiesduring 1998, partially offset by the sale of the
office buildings. On a same property basis, operating and intendsmaintenance expenses
and real estate taxes increased $100,000 or 1%. General and administrative
expenses increased 51% during 1998 to continue$15.1 million due to qualifythe hiring of new
employees and related office expenses necessary to manage the shopping centers
acquired during 1998 and 1997, as a REIT underwell as, the Internal Revenue Code. As a REIT,shopping centers the Company
is allowedbegan managing for third parties during 1998 and 1997. Depreciation and
amortization increased $8.7 million during 1998 or 54% primarily due to reduce taxable
income by allthe 1998
and 1997 Acquisitions.
Interest expense increased to $28.8 million in 1998 from $19.7 million
in 1997 or a portion of its distributions46% due to stockholders. As
distributions have exceeded taxable income, no provision for federal income
taxes has been made. Whileincreased average outstanding loan balances related to the
Company intends to continue to pay dividends to
its stockholders, the Company will reserve such amounts of cash flow as it
considers necessary for the proper maintenance and improvement of its real
estate, while still maintaining its qualification as a REIT.
The Company's real estate portfolio has grown substantially during 1997 as a
resultfinancing of the acquisitions1998 and developments discussed above. In 1998, the
Company intends to exceed its 1997 level of acquisitions and development. The
Company expects to meet the related capital requirements from borrowingsAcquisitions on the Line and from additional public equitythe assumption of
debt. Weighted average interest rates increased 0.1% during 1998. See further
discussion under Acquisition and debt offerings. Because such
acquisitionDevelopment of Shopping Centers and development activities are discretionaryLiquidity
and Capital Resources.
Net income for common stockholders was $50.6 million in nature, they are not
expected to burden the Company's capital resources currently available for
liquidity requirements. The Company expects that cash provided by operating
activities, unused amounts available under the Line, and cash reserves are
adequate to meet liquidity requirements.
Recent Events
On March 11, 1998 the Company acquired the real estate assets of entities
comprising the Midland Group ("Midland") consisting of 21 shopping centers (the
"Midland Properties") plusvs. $27.4
million in 1997, a development pipeline of 11 shopping centers. Of the
21 centers acquired, 20 are anchored by Kroger. Eight of the shopping centers
included in the development pipeline will be owned through a joint venture in
which the Company will own less than a 50% interest upon completion of
construction. At closing and during 1998, the Company will pay approximately
$230.4$23.2 million or 85% increase for the propertiesreasons previously
described. Diluted earnings per share in 1998 was $1.75 vs. $1.23 in 1997 due to
the increase in net income combined with the dilutive impact from the increase
in weighted average common shares and equivalents of 7.2 million primarily due
to pay transaction costs throughthe acquisition of Branch and Midland, the issuance of units of RRLP valued at $26.58 per unit (the fair market value ofshares to SC-USREALTY
during 1998 and 1997, and the Company's common stock onpublic offering completed in July, 1997. (see
notes 2, 6 and 7, to the date the terms of the acquisition were agreed
to) or cash of $47 million, the assumption of $92.5 million of debt, and $90.9
million to pay off existing secured real estate loans. The Company will incur
additional costs to establish reserves, pay severance, and prepay existing
assumed loans. Subsequent to 1998 the Company expects to pay approximately
$12.7 million to acquire equity interests in the development pipeline as the
properties reach stabilization. The Company may also be required to make
payments aggregating $10.5 million through the year 2000 contingent upon
increases in net income from existing properties, the development pipeline, and
new properties developed or acquired in accordance with the contribution
agreement.
Results from Operationsconsolidated financial statements for related
discussions).
Comparison of 1997 to 1996
Revenues increased $50.8$50.4 million or 108%107% to $97.8$97.3 million in 1997. The increase
was due primarily to the 1997 Acquisitions and properties acquired in 1996 Acquisitions(the
"1996 Acquisitions") providing increases in revenues of $49.8 million during
1997. At December 31, 1997, the real estate portfolio contained approximately 10
million SF and was 92.8% leased
and had average rents of $9.34 per SF.leased. Minimum rent increased $35.4 million or 102%,
and recoveries from tenants increased $9.3$8.9 million or 121%115%. On a same property
basis (excluding the 1997 and 1996 Acquisitions) revenues increased $960$925,000 or
2%, primarily due to higher percentage rents and operating expense recoveries
from tenants. Revenues from property management, leasing, brokerage, and
development services provided on properties not owned by the Company were $8.4
million in 1997 compared to $3.4 million in 1996, the increase due to fees
earned from third party property management and leasing contracts acquired as
part of the acquisition of Branch. At December 31, 1997, the Company managed shopping
centers and office buildings owned entirely by third parties containing
approximately 4.4 million SF vs. 1.2 million SF at December 31, 1996.
17
Operating expenses increased $23.0 million or 88% to $49.2 million in 1997.
Combined operating and maintenance, and real estate taxes increased $10.8
million or 89% during 1997 to $22.9 million. The increases are due to the 1997
and 1996 Acquisitions generating operating and maintenance expenses, and real
estate tax increases of $10.6 million during 1997. On a same property basis,
operating and maintenance expenses and real estate taxes increased $226,$226,000, or
2%. General and administrative expense increased 64.7% during 1997 to $10.0
million due to the hiring of new employees and related office expenses necessary
to manage the 52 shopping centers acquired during 1996 and 1997, as well as, the
44 shopping centers that the Company began managing for third parties during
1997. Depreciation and amortization increased $8.2 million during 1997 or 102%
primarily due to the 1997 and 1996 Acquisitions generating $7.7 million in
depreciation and amortization.
Interest expense increased to $19.7 million in 1997 from $11.5 million
in 1996 or 71% due primarily to increased average outstanding loan balances
related to the financing of the 1997 and 1996 Acquisitions on the Line and the
assumption of debt, as discusseddebt. Weighted average interest rates decreased 0.2% during 1997.
See further discussion under Acquisition and Development of Shopping Centers and
Liquidity and Capital Resources.
Net income for common stockholders was $27.4 million in 1997 vs. $9.9
million in 1996, a $17.5 million or 177% increase for the reasons previously
described. Diluted earnings per share in 1997 was $1.23 vs. $0.82 in 1996, an
increase of 50% due to the increase in net income combined with the dilutive
impact from the increase in weighted average common shares and equivalents of
12.4 million primarily due to the Acquisition of the Branch Properties, the
issuance of shares to SC-USREALTY, and the public offering discussed previously (see notes
2, 6 and 7, to the 1997 consolidated financial statements for related
discussions).
Comparison of 1996 to 1995
Revenues increased $13 million or 38% to $46.9 million in 1996. The increase was
due primarily to the 1996 Acquisitions discussed above, and 6 shopping centers
purchased during 1995 for $53.3 million ("1995 Acquisitions"), providing
increases in revenues of $10 million during 1996. At December 31, 1996, the real
estate portfolio contained approximately 5.5 million SF, was 95.4% leased and
had average rents of $8.73 per SF. Minimum rent increased $9.7 million or 39%,
and recoveries from tenants increased $1.9 million or 32%. On a same property
basis (excluding the 1996 and 1995 Acquisitions) revenues increased $3 million
or 10%, primarily due to increased based rent from 3 new anchor tenants who
opened during 1996 at 3 of the Company's shopping centers (the "1995 Anchor
Expansions"). Revenues from property management, leasing, brokerage, and
development services provided on properties not owned by the Company were $3.4
million in 1996 compared to $2.4 million in 1995, the increase due to fees
earned on build to suit development activity. At December 31, 1996 and 1995, the
Company managed shopping centers and office buildings owned entirely by third
parties containing approximately 1.2 million SF.
Operating expenses increased $6.7 million or 29% to $26.2 million in 1996.
Combined operating and maintenance, and real estate taxes increased $3.4 million
or 39% during 1996 to $12.1 million. The increases are due to the 1996 and 1995
Acquisitions generating operating and maintenance expenses and real estate tax
increases of $2.7 million during 1996. On a same property basis, operating and
maintenance expenses and real estate taxes increased $651, or 11% primarily due
to the 1995 Anchor Expansions. General and administrative expense increased 24%
during 1996 to $6 million due to the hiring of new employees and related office
expenses necessary to manage the 20 shopping centers acquired during 1995 and
1996. Depreciation and amortization increased $2.2 million during 1996 or 38%
primarily due to the 1996 and 1995 Acquisitions and the 1995 Anchor Expansions.
Net interest expense increased to $10.1 million in 1996 from $8.4 million in
1995 or 21% due primarily to increased average outstanding loan balances related
to the 1996 and 1995 Acquisitions. Outstanding debt at December 31, 1996 was
$171.6 million vs. $115.6 million in 1995. Preferred stock dividends declined as
a result of the full conversion of the remaining Series A preferred stock into
common stock during 1996.
Net income for common stockholders was $9.9 million in 1996 vs. $5 million
in 1995, a $4.9 million or 98% increase for the reasons previously described.
Diluted earnings per share in 1996 was $0.82 vs. $0.75 in 1995, an increase
18
of 9.3% due to the increase in net income combined with the dilutive impact from
the increase in weighted average common shares and equivalents of 722 due to the
issuance of shares to SC-USREALTY discussed previously (see notes 2, 6 and 7, to
the 1997 consolidated financial statements for related discussions).previously.
Funds from Operations
The Company considers funds from operations ("FFO"), as defined by the National
Association of Real Estate Investment Trusts as net income (computed in
accordance with generally accepted accounting principles) excluding gains (or
losses) from debt restructuring and sales of income producing property held for
investment, plus depreciation and amortization of real estate, and after
adjustments for unconsolidated investments in real estate partnerships and joint
ventures, to be the industry standard for reporting the operations of real
estate investment trusts ("REITs"). Adjustments for investments in real estate
partnerships are calculated to reflect FFO on the same basis. While management
believes that FFO is the most relevant and widely used measure of the Company's
performance, such amount does not represent cash flow from operations as defined
by generally accepted accounting principles, should not be considered an
alternative to net income as an indicator of the Company's operating
performance, and is not indicative of cash available to fund all cash flow
needs. Additionally, the Company's calculation of FFO, as provided below, may
not be comparable to similarly titled measures of other REITs.
FFO increased by 149%50% from 19961997 to 19971998 as a result of the acquisition activity discussed
above under "Results of Operations". FFO for the periods ended December 31,
1998, 1997 and 1996 are summarized in the following table:table (in thousands):
1998 1997 1996 1995
---- ---- ----
Net income for common stockholders $ 50,590 27,402 9,907 4,994
Add (subtract):
Real estate depreciation and amortization net24,529 15,671 8,049 5,833
Gain on sale of office buildingoperating property (9,824) (451) - -
Minority interests in net income of
RedeemableExchangeable partnership units
1,826 2,042 -
-
------ ------ ----------------- --------- ---------
Funds from operations $ 44,66367,121 44,664 17,956
10,827
====== ====== ================= ========= =========
Cash flow provided by (used by)in):
Operating activities $ 65,002 43,044 16,004
15,892
Investing activities (236,393) (188,533) (109,842)
(61,504)
Financing activities 174,725 153,782 98,730 46,153
Liquidity and Capital Resources
- -------------------------------
Management anticipates that cash generated from operating activities will
provide the necessary funds on a short-term basis for its operating expenses,
interest expense and scheduled principal payments on outstanding indebtedness,
recurring capital expenditures necessary to properly maintain the shopping
centers, and distributions to share and unit holders. Net cash provided by
operating activities was $65 million and $43 million for the twelve months ended
December 31, 1998 and 1997, respectively. The Company incurred recurring and
non-recurring capital expenditures (non-recurring expenditures pertain to
immediate building improvements on new acquisitions and anchor tenant
improvements on new leases) of $8.3 million and $5.2 million, during 1998 and
1997, respectively. The Company paid scheduled principal payments of $3.4
million and $2.2 million during 1998 and 1997, respectively. The Company paid
dividends and distributions of $54.9 million and $35.9 million, during 1998 and
1997, respectively, to its share and unit holders.
Management expects to meet long-term liquidity requirements for term debt
payoffs at maturity, non-recurring capital expenditures, and acquisition,
renovation and development of shopping centers from: (i) excess cash generated
from operating activities, (ii) working capital reserves, (iii) additional debt
borrowings, and (iv) additional equity raised in the public markets. Net cash
used in investing activities was $236.4 million and $188.5 million, during 1998
and 1997, respectively, primarily for purposes discussed above under
Acquisitions and Development of Shopping Centers. Net cash provided by financing
activities was $174.7 million and $153.8 million during 1998 and 1997,
respectively, primarily related to the proceeds from the preferred unit and debt
offerings completed during 1998, and the proceeds from the common stock offering
in 1997, further discussed below. At December 31, 1998, the Company had 12
shopping centers under construction or undergoing major renovations, with costs
to date of $121.7 million. Total committed costs necessary to complete the
properties under development is estimated to be $47.4 million and will be
expended through 1999.
The Company's outstanding debt at December 31, 1998 and 1997 consists of the
following (in thousands):
1998 1997
---- ----
Notes Payable:
Fixed rate mortgage loans $ 298,148 199,078
Variable rate mortgage loans 11,051 30,841
Fixed rate unsecured loans 121,296 -
------- -------
Total notes payable 430,495 229,919
Acquisition and development line of credit 117,631 48,131
------- -------
Total $ 548,126 278,050
======= =======
The weighted average interest rate on total debt at December 31, 1998 and 1997
was 7.4% and 7.3%, respectively. The Company's debt is typically
cross-defaulted, but not cross-collateralized, and includes usual and customary
affirmative and negative covenants.
The Company is a party to a credit agreement dated as of March 27, 1998,
providing for an unsecured line of credit (the "Line") from a group of
lenders currently consisting of Wells Fargo, First Union, Wachovia Bank,
NationsBank, AmSouth Bank, Commerzbank AG, PNC Bank, and Star Bank. This credit
agreement provides for a $300 million commitment, and incorporates a competitive
bid facility of up to $150 million of the commitment amount. Maximum
availability under the Line is based on the discounted value of a pool of
eligible unencumbered assets (determined on the basis of capitalized net
operating income) less the amount of the Company's outstanding unsecured
liabilities. The Line matures in May 2000, but may be extended annually for one
year periods. Borrowings under the Line bear interest at a variable rate based
on LIBOR plus a specified spread, (.875% currently), which is dependent on the
Company's investment grade rating. The Company's ratings are currently Baa2 from
Moody's Investor Service, BBB from Duff and Phelps, and BBB- from Standard and
Poors. The Company is required to comply, and is in compliance, with certain
financial and other covenants customary with this type of unsecured financing.
These financial covenants include among others (i) maintenance of minimum net
worth, (ii) ratio of total liabilities to gross asset value, (iii) ratio of
secured indebtedness to gross asset value, (iv) ratio of EBITDA to interest
expense, (v) ratio of EBITDA to debt service and reserve for replacements, and
(vi) ratio of unencumbered net operating income to interest expense on unsecured
indebtedness. The Line is used primarily to finance the acquisition and
development of real estate, but is also available for general working capital
purposes.
On February 26, 1999, the Company entered into an agreement with the
various banks that provide the Line to increase the unsecured commitment amount
to $635 million.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred Units") to
an institutional investor, Belair Capital Fund, LLC, in a private placement. The
issuance involved the sale of 1.6 million Series A Preferred Units for $50.00
per unit. The Series A Preferred Units, which may be called by the Company at
par on or after June 25, 2003, have no stated maturity or mandatory redemption,
and pay a cumulative, quarterly dividend at an annualized rate of 8.125%. At any
time after June 25, 2008, the Series A Preferred Units may be exchanged for
shares of 8.125% Series A Cumulative Redeemable Preferred Stock of the Company
at an exchange rate of one share of Series A Preferred Stock for one Series A
Preferred Unit. The Series A Preferred Units and Series A Preferred Stock are
not convertible into common stock of the Company. The net proceeds of the
offering were used to reduce the Line.
On July 17, 1998 the Company, through RCLP, completed a $100 million
offering of seven year term notes at an effective interest rate of 7.17%. The
Notes were priced at 162.5 basis points over the current yield for seven year US
Treasury Bonds. The net proceeds of the offering were used to reduce the balance
of the Line.
Mortgage loans are secured by certain real estate properties, but generally may
be prepaid subject to a prepayment of a yield-maintenance premium. Mortgage
loans are generally due in monthly installments of interest and principal and
mature over various terms through 2018. Variable interest rates on mortgage
loans are currently based on LIBOR plus a spread in a range of 125 basis points
to 150 basis points. Fixed interest rates on mortgage loans range from 7.04% to
9.8%.
During 1998, the Company assumed mortgage loans with a fair value of $132.8
million related to the acquisition of shopping centers, which includes debt
premiums of $12.4 million based upon the above market interest rates of the debt
instruments. Debt premiums are being amortized over the terms of the related
debt instruments.
As of December 31, 1998, scheduled principal repayments on notes payable and the
Line for the next five years were as follows (in thousands):
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
-------------------------- --------- ---------- --------
1999 $ 3,771 21,579 25,350
2000 3,996 174,674 178,670
2001 3,911 41,928 45,839
2002 3,098 44,117 47,215
2003 2,914 13,291 16,205
Beyond 5 Years 17,811 206,607 224,418
Net unamortized debt
payments - 10,429 10,429
------- ------- -------
Total $ 35,501 512,625 548,126
======= ======= =======
Unconsolidated partnerships and joint ventures had mortgage loans payable of
$76.7 million at December 31, 1998, and the Company's proportionate share of
these loans was $34.4 million.
The Company qualifies and intends to continue to qualify as a REIT under the
Internal Revenue Code. As a REIT, the Company is allowed to reduce taxable
income by all or a portion of its distributions to stockholders. As
distributions have exceeded taxable income, no provision for federal income
taxes has been made. While the Company intends to continue to pay dividends to
its stockholders, it also will reserve such amounts of cash flow as it considers
necessary for the proper maintenance and improvement of its real estate, while
still maintaining its qualification as a REIT.
The Company's real estate portfolio has grown substantially during 1998 as a
result of the acquisitions and development discussed above. The Company intends
to continue to acquire and develop shopping centers in the near future, and
expects to meet the related capital requirements from borrowings on the Line.
The Company expects to repay the Line from time to time from additional public
and private equity and debt offerings, such as those completed during 1997 and
1998. Because such acquisition and development activities are discretionary in
nature, they are not expected to burden the Company's capital resources
currently available for liquidity requirements. The Company expects that cash
provided by operating activities, unused amounts available under the Line, and
cash reserves are adequate to meet liquidity requirements.
Pacific Retail Trust Merger
- ---------------------------
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held real
estate investment trust. The Agreement, among other matters, provides for the
merger of Pacific into Regency, and the exchange of each Pacific common or
preferred share into 0.48 shares of Regency common or preferred stock. The
stockholders approved the merger at a Special Meeting of Stockholders held
February 26, 1999. At the time of the merger, Pacific owned 71 retail shopping
centers that are operating or under construction containing 8.4 million SF of
gross leaseable area. On February 28, 1999, the effective date of the merger,
the Company issued equity instruments valued at $770.6 million to the Pacific
stockholders in exchange for their outstanding common and preferred shares, and
units. The total cost to acquire Pacific is expected to be $1.157 billion based
on the value of Regency shares issued including the assumption of $379 million
of outstanding debt and other liabilities of Pacific, and estimated closing
costs of $7.5 million. The price per share used to determine the purchase price
is $23.325 based on the five day average of the closing stock price of Regency's
common stock as listed on the New York Stock Exchange immediately before, during
and after the date the terms of the merger were agreed to and announced to the
public. The merger will be accounted for as a purchase with the Company as the
acquiring entity.
New Accounting Standards and Accounting Changes
- -----------------------------------------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities " (FAS 133), which is effective for all fiscal quarters of all fiscal
years beginning after June 15, 1999. FAS 133 establishes accounting and
reporting standards for derivative instruments and hedging activities. FAS 133
requires entities to recognize all derivatives as either assets or liabilities
in the balance sheet and measure those instruments at fair value. The Company
does not believe FAS 133 will materially effect its financial statements. g.
Environmental Matters
- ---------------------
The Company like others in the commercial real estate industry, is subject to
numerous environmental laws and regulations and the operation of dry cleaning
plants at the Company's shopping centers is the principal environmental concern.
The Company believes that the dry cleaners are operating in accordance with
current laws and regulations and has established procedures to monitor their
operations. The Company has approximately 31 properties that will require or are
currently undergoing varying levels of environmental remediation. These
remediations are not expected to have a material financial effect on the Company
due to financial statement reserves and various state-regulated programs that
shift the responsibility and cost for remediation to the state. Based on
information presently available, no additional environmental accruals were made
and management believes that the ultimate disposition of currently known matters
will not have a material effect on the financial position, liquidity, or
operations of the Company.
See note 11 of the
consolidated financial statements for further discussion.
19
Inflation
- ---------
Inflation has remained relatively low during the past three years1998 and 1997 and has had a minimal
impact on the operating performance of the shopping centers, however,
substantially all of the Company's long-term leases contain provisions designed
to mitigate the adverse impact of inflation. Such provisions include clauses
enabling the Company to receive percentage rentals based on tenants' gross
sales, which generally increase as prices rise, and/or escalation clauses, which
generally increase rental rates during the terms of the leases. Such escalation
clauses are often related to increases in the consumer price index or similar
inflation indices. In addition, many of the Company's leases are for terms of
less than ten years, which permits the Company to seek increased rents upon
re-rental at market rates. Most of the Company's leases require the tenants to
pay their share of operating expenses, including common area maintenance, real
estate taxes, insurance and utilities, thereby reducing the Company's exposure
to increases in costs and operating expenses resulting from inflation.
Year 2000 System ConversionsCompliance
- ---------------------------
Management recognizes the potential effect Year 2000 may have on the Company's
operations and, as a result, has implemented a Year 2000 Compliance Project. The
term "Year 2000 compliant" means that the software, hardware, equipment, goods
or systems utilized by, or material to the physical operations, business
operations, or financial reporting of an entity will properly perform date
sensitive functions before, during and after the year 2000.
The Company's Year 2000 Compliance Project includes an awareness phase, an
assessment phase, a renovation phase, and a testing phase of our data processing
network, accounting and property management systems, computer and operating
systems, software packages, and building management systems. The project also
includes surveying our major tenants and financial institutions. Total costs
incurred to date associated with the Company's Year 2000 compliance project have
been reflected in the Company's income statement throughout 1998 and 1997, and
were approximately $250,000.
The Company's computer hardware, operating systems, general accounting and
property management systems and principal desktop software applications are Year
2000 compliant as certified by the various vendors. We are currently testing
these systems, and expect to complete the testing phase by June 30, 1999. Based
on initial testing, Management does not anticipate any Year 2000 issues that
will materially impact operations or operating results.
An assessment of the Company's building management systems has been completed.
This assessment has resulted in the identification of certain lighting,
telephone, and voice mail systems that may not be Year 2000 compliant. While we
have not yet begun renovations, Management believes that the cost of upgrading
these systems will not exceed $500,000. It is anticipated that the renovation
and testing phases will be complete by June 30, 1999, and the Company expects to
be compliant upon completion of these phases.
The Company has conducted a comprehensive reviewsurveyed its major tenants and financial institutions to
determine the extent to which the Company is vulnerable to third parties'
failure to resolve their Year 2000 issues. The Company will be able to more
adequately assess its third party risk when responses are received from the
majority of the entities contacted.
Management believes its planning efforts are adequate to address the Year 2000
issue and that its risk factors are primarily those that it cannot directly
control, including the readiness of its computer systemsmajor tenants and financial
institutions. Failure on the part of these entities to identifybecome Year 2000
compliant could result in disruption in the Company's cash receipt and
disbursement functions. There can be no guarantee, however, that the systems that couldof
unrelated entities upon which the Company's operations rely will be affected bycorrected on
a timely basis and will not have a material adverse effect on the "Year 2000" problem and is in
process of resolvingCompany.
The Company does not have a formal contingency plan or a timetable for
implementing one. Contingency plans will be established, if they are deemed
necessary, after the issue. TheCompany has adequately assessed the impact on operations
should third parties fail to properly respond to their Year 2000 problemissues.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
- -----------
The Company is theexposed to interest rate changes primarily as a result of computer
programs being written using two digits rather than fourits
line of credit and long-term debt used to define the
applicable year. Anymaintain liquidity and fund capital
expenditures and expansion of the Company's programs that have time sensitive software
may recognize a date using "00" asreal estate investment portfolio and
operations. The Company's interest rate risk management objective is to limit
the year 1900 rather than 2000. This could
result in major system failureimpact of interest rate changes on earnings and miscalculations. During 1997,cash flows and to lower its
overall borrowing costs. To achieve its objectives the Company converted its operating system,borrows primarily
at fixed rates and its general accountingmay enter into derivative financial instruments such as
interest rate swaps, caps and lease
administration software systems to versions containing modifications that
corrected for the Year 2000 problem. Both suppliers have received ITAA 2000
certification from The Information Technology Association of America, the
industry's century date change certification program. The Company will continue
to assess its other internal systems and reprogram or upgrade as necessary. The
Company is also reviewing the Year 2000 system conversions of other companies of
which it does businesstreasury locks in order to determine their compliance.mitigate its interest
rate risk on a related financial instrument. The Company has no plans to enter
into derivative or interest rate transactions for speculative purposes, and at
December 31, 1998, the Company did not have any borrowings hedged with
derivative financial instruments.
The Company's interest rate risk is monitored using a variety of techniques. The
table below presents the principal amounts maturing (in thousands), weighted
average interest rates of remaining debt, and the fair value of total debt (in
thousands), by year of expected maturity to evaluate the expected cash flows and
sensitivity to interest rate changes.
Fair
1999 2000 2001 2002 2003 Thereafter Total Value
---- ---- ---- ---- ---- ---------- ----- -----
Fixed rate debt $23,243 60,907 37,027 47,215 16,205 224,418 409,014 419,444
Average interest rate for all debt 7.83% 7.75% 7.91% 7.87% 7.70% 7.62% - -
Variable rate LIBOR debt 2,107 117,763 8,813 - - - 128,682 128,682
Average interest rate for all debt 6.16% 6.16% 6.55% - - - - -
As the table incorporates only those exposures that exist as of December 31,
1998, it does not consider those exposures or positions which could arise after
that date. Moreover, because firm commitments are not presented in the table
above, the information presented therein has limited predictive value. As a
result, the Company's ultimate realized gain or loss with respect to interest
rate fluctuations will depend on the exposures that arise during the period, the
Company's hedging strategies at that time, and interest rates.
Forward Looking Statements
- --------------------------
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe
harbor for forward-looking statements made by or on behalf of the Company. The
Company and its representatives may from time to time make written or oral
statements that are "forward-looking," including statements contained in this
report and other filings with the Securities and Exchange Commission and in
reports to the Company's stockholders. All statements that express expectations
and projections with respect to future matters, including the launching or
prospective development of new business initiatives; anticipated yields on real
estate acquisitions or developments; "Year 2000" remediation efforts; and
environmental remediation efforts, are forward-looking within the meaning of the
Act. Such statements involve unknown risks and uncertainties of business and
economic conditions pertaining to the operation, acquisition, or development of
shopping centers including the retail business sector, and may cause actual
results of the Company in the future to significantly differ from any future
results that may be implied by such forward-looking statements.
Item 8. Consolidated Financial Statements and Supplementary Data
The Consolidated Financial Statements and supplementary data included in this
Report are listed in Part IV, Item 14(a).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning the directors of the Company is incorporated herein by
reference to the Company's definitive proxy statement to be filed with the
Securities and Exchange Commission within 120 days after the end of the fiscal
year covered by this Form 10-K with respect to its 19981999 Annual Meeting of
Shareholders.
20
The following table provides information concerning the executive
officers of the Company
severalExecutive Officer Positions with the Company
(Age) Principal Occupations During the Past Five Years
----------------- ------------------------------------------------
Martin E. Stein, Jr. Chairman, Chief Executive Officer, and Director
(age 46) of which were officersthe Company since its initial public offering in
October 1993; previously President of TRG for five years or more prior
to the Company's
acquisition of TRG'spredecessor real estate businessdivision since 1976.
MaryLou Rogers President and Chief Operating Officer since
(age 47) January, 1999 and Director of the Company since
March, 1997; Managing Director - Security Capital
U.S. Realty Strategic Group From March 1997 to
January 1999; Senior Vice President and
Director of Stores, New England - Macy's East/
Federated Department Stores from 1994 to March
1997; various retailing positions since joining
Macy's in November, 1993.
- ---------------------------------- ---------------------------------------------------------------
Position with the Company;
Name Principal Occupations During
(Age) Past Five Years
- ---------------------------------- ---------------------------------------------------------------
Martin E. Stein, Jr. (45) Chairman, Chief Executive Officer and Director of the
Company, and President, Chief Executive Officer and Director
of TRG
- ---------------------------------- ---------------------------------------------------------------
Bruce M. Johnson (50) Managing Director and Chief Financial Officer of the Company,
and previously Vice President of Investment Management and
Acquisitions of TRG.
- ---------------------------------- ---------------------------------------------------------------
Robert C. Gillander, Jr. (44) Managing Director of Investments for the Company, and
previously Vice President of Development of TRG
- ---------------------------------- ---------------------------------------------------------------
James D. Thompson (42) Managing Director of Operations for the Company, and
previously Vice President of Asset Management in North and
Central Florida regions of TRG.
- ---------------------------------- ---------------------------------------------------------------
Lee S. Wielansky (46) Managing Director of Investments of the Company, and
previously President and Chief Executive Officer of Midland
Development Group1977, including Senior Vice President
for Federated's Burdines Division and Henri
Bendel.
James G. Buis Managing Director - Southwestern U.S. Investments
(age 54) of the Company since February 1999; Managing
Director - Pacific Retail Trust from October,
1995 to February 1999; Executive Vice President
- Madison Property Corporation from 1993 to
October, 1995; Executive Vice President -
Rosewood Property Company from 1989 to 1993;
Retail Partner - Lincoln Property Company from
1979 to 1989.
John S. Delatour Managing Director - Western U.S. Operations of the
(age 40) Company since February, 1999; Managing Director -
Pacific Retail Trust from June, 1996 to February
1999; Senior Vice President - Lincoln Property
Company from 1983 to June, 1996.
Robert C. Gillander Managing Director - Eastern U.S. Investments of the
(age 45) Company since its initial public offering in
October 1993, and Vice President of the
Company's predecessor real estate division
since 1978.
Bruce M. Johnson Managing Director and Chief Financial Officer of
(age 51) the Company since its initial public offering in
October 1993, and Executive Vice President of
the Company's predecessor real estate division
since 1979.
Brian M. Smith Managing Director - Pacific Investments of the
(age 44) Company since February, 1999; Managing Director -
Pacific Retail Trust from February, 1997 to
February 1999; Senior Vice President - Lowe
Enterprises, Inc. from 1994 to February 1997;
Managing Director - Trammell Crow Company from
1983 to 1994.
James D. Thompson Managing Director - Eastern Operations of the
(age 42) Company since its initial public offering in
October 1993, and Vice President of the Company's
predecessor real estate division since 1981.
Lee S. Wielansky Managing Director - Investments and Director of the
(age 48) Company since March 1998; President and Chief
Executive Officer - Midland Development Group
from 1983 to March 1998.
- ---------------------------------- ---------------------------------------------------------------
Item 11. Executive Compensation
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 19981999 Annual
Meeting of Shareholders.
Item 12. Security Ownership of Certain Beneficial Owner and Management
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 19981999 Annual
Meeting of Shareholders.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 19981999 Annual
Meeting of Shareholders.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements and Financial Statement Schedules:
The Company's 19971998 financial statements and financial statement schedule,
together with the report of KPMG Peat Marwick LLP dated February 3, 1998,1, 1999, except for Note 1213
as to which the date is March 1, 1998,1999, are listed on the index immediately
preceding the financial statements at the end of this report.
(b) Reports on Form 8-K:
None
21
(c) Exhibits:
2. Agreement and Plan of Merger dated as of September 23, 1998 between
Regency Realty Corporation and Pacific Retail Trust (incorporated by
reference to Exhibit 2.1 to the registration statement on Form S-4 of
Regency Realty Corporation, No. 333-65491)
3. Articles of Incorporation
# (i) Restated Articles of Incorporation of Regency Realty
Corporation as amended to date.amended.
#(ii) Restated Bylaws of Regency Realty Corporation.
4. (a) See exhibits 3(i) and 3(ii) for provisions of the Articles of
Incorporation and Bylaws of Regency Realty Corporation defining
rights of security holders.
10.Material(b) Indenture dated July 20, 1998 between Regency Centers, L.P., the
guarantors named therein and First Union National Bank, as trustee
(incorporated by reference to Exhibit 4.1 to the registration
statement on Form S-4 of Regency Centers, L.P., No. 333-63723).
10. Material Contracts
~*(a) Regency Realty Corporation 1993 Long Term Omnibus Plan
~*(b) Form of Stock Purchase Award Agreement
~*(c) Form of Management Stock Pledge Agreement, relating to the
Stock Purchase Award Agreement filed as Exhibit 10(b)
~*(d) Form of Promissory Note, relating to the Stock Purchase Award
Agreement filed as Exhibit 10(b)
~*(e) Form of Option Award Agreement for Key Employees
~*(f) Form of Option Award Agreement for Non-Employee Directors
~*(g) Annual Incentive for Management Plan
~*(h) Form of Director/Officer Indemnification Agreement
~*(i) Form of Non-Competition Agreement between Regency Realty
Corporation and Joan W. Stein, Robert L. Stein, Richard W.
Stein,the Martin E. Stein Testamentary Trust A and the
Martin E. Stein Testamentary Trust B.
~*(j) Form of Employment Agreement with Martin E. Stein, Jr.
~*** (k) Form of Employment Agreements entered into with the following
executive officers:
(i) Bruce M. Johnson
(ii) Robert C. Gillander, Jr.
(iii) James D. Thompson
(l) The following documents, all dated November 5, 1993,
relating to a $51 million loan from Salomon Brothers
Inc. to corporations and subsidiaries wholly owned by
the Company.
** (i) Loan Agreement between RSP IV Criterion, Ltd.,
Regency Rosewood Temple Terrace, Ltd., Treasure
Coast Investors, Ltd., Landcom Regency Mandarin,
Ltd., RRC FL SPC, Inc., RRC AL SPC, Inc., RRC MS
SPC, Inc., and RRC GA SPC, Inc.(as borrowers) and
RRC Lender, Inc. (as lender)
** (ii) Promissory Note in the original principal amount of
$51 million
** (iii) Undertaking executed by the Registrant and RRC FL
SPC, Inc., RRC AL SPC, Inc., RRC MS SPC, Inc., and
RRC GA SPC, Inc.
** (iv) Certificate Purchase Agreement between RRC Lender,
Inc. (as seller) and Salomon Brothers, Inc. (as
lender)
(m) The following documents relating to the purchase by Security
Capital U.S. Realty and Security Capital Holdings, S.A. of up
to 45% of the Registrant's outstanding common stock:
++ (i) Stock Purchase Agreement dated June 11, 1996.
++ (ii) Stockholders' Agreement dated July 10, 1996.
+++ (A) First Amendment of Stockholders' Agreement dated
February 10, 1997.
(B) Amendment No. 2 to Stockholders' Agreement dated
December 4, 1997 (incorporated by reference to
Exhibit 6.2 to Schedule 13D/A filed by Security
Capital U.S. Realty on December 11, 1997)
++ (iii) Registration Rights Agreement dated July 10, 1996.
+ (n) Stock Grant Plan adopted on January 31, 1994 to grant stock to
employees.
~@ (o) Criteria for Restricted Stock Awards under 1993 Long Term
Omnibus Plan.
~@ (p) Form of 1996 Stock Purchase Award Agreement.
~@ (q) Form of 1996 Management Stock Pledge Agreement relating to the
Stock Purchase Award Agreement filed as Exhibit 10(p).
~@ (r) Form of Promissory Note relating to 1996 Stock Purchase Award
Agreement filed as Exhibit 10(p).
+++ Filed as an exhibit to the Company's Form 8-K report filed
March 14, 1997 and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25,
1997 and incorporated herein by reference.
@@ Included as an exhibit to the Company's Form 10-Q filed May 15,
1997 and incorporated herein by reference.
@@@ Included as an exhibit to the Company's Form 8-K/A report filed
March 19, 1998 and incorporated herein by reference.
@@@ (s) Second Amended and Restated Agreement of Limited Partnership of
Regency Centers, L.P.
(t) Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of Regency Centers, L.P. (incorporated by
reference to Exhibit 3.2 to the Registration Statement on Form
10 of Regency Centers, L.P.)
(u) Amended and Restated Credit Agreement dated as of February 26,
1999 by and among Regency Centers, L.P., a Delaware limited
partnership (the "Borrower"), Regency Realty Corporation, a
Florida corporation (the "Parent"), each of the financial
institutions initially a signatory hereto together with their
assignees, (the "Lenders"), and Wells Fargo Bank, National
Association, as contractual representative of the Lenders to
the extent and in the manner provided.
(v) Assignment and Acceptance Agreement dated as of February 26,
1999 by and among Regency Centers, L.P., Regency Realty
Corporation and Wells Fargo Bank, National Association, as
Agent.
- -------------------------
~ Management contract or compensatory plan or arrangement filed
pursuant to S-K 601(10)(iii)(A).
# Included as an exhibit to the Company's Form 10-Q filed August 11,
1997 and incorporated herein by reference.
* Included as an exhibit to the Pre-effective Amendment No. 2 to the
Company's S-11 filed October 5, 1993, and incorporated herein by
reference
** Included as an exhibit to the Company's Form 10-Q filed December 13,
1993, and incorporated herein by reference
*** Included as an exhibit to the Company's Form 10-Q filed November 14,
1996, and incorporated herein by reference
+ Included as an exhibit to the Company's Form 10-Q filed May 12, 1994,
and incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
+++ Filed as an exhibit to the Company's Form 8-K report filed March 14,
1997 and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25, 1997
and incorporated herein by reference.
@@ Included as an exhibit to the Company's Form 10-Q filed May 15, 1997
and incorporated herein by reference.
@@@ Included as an exhibit to the Company's Form 8-K/A report filed
March 19, 1998 and incorporated herein by reference.
22
~*(j) Form of Employment Agreement with Martin E. Stein, Jr.
~*** (k) Form of Employment Agreements entered into with the following
executive officers:
(i) Bruce M. Johnson
(ii) Robert C. Gillander, Jr.
(iii) James D. Thompson
(l) The following documents, all dated November 5, 1993,
relating to a $51 million loan from Salomon Brothers
Inc. to corporations and subsidiaries wholly owned by the Company.
** (i) Loan Agreement between RSP IV Criterion, Ltd., Regency
Rosewood Temple Terrace, Ltd., Treasure Coast Investors,
Ltd., Landcom Regency Mandarin, Ltd., RRC FL SPC, Inc.,
RRC AL SPC, Inc., RRC MS SPC, Inc.,and RRC GA SPC, Inc.
(as borrowers) and RRC Lender, Inc.(as lender)
** (ii) Promissory Note in the original principal amount of $51
million
** (iii) Undertaking executed by the Registrantand RRC FL SPC,Inc.
RRC AL SPC, Inc., RRC MS SPC, Inc., and RRC GA SPC, Inc.
** (iv) Certificate Purchase Agreement between RRC Lender,
Inc. (as seller) and Salomon Brothers, Inc.
(as lender)
(m) The following documents relating to the purchase by Security Capital
U.S. Realty and Security Capital Holdings, S.A. of up to 45% of the
Registrant's outstanding common stock:
++ (i) Stock Purchase Agreement dated June 11, 1996.
++ (ii) Stockholders' Agreement dated July 10, 1996.
- --------------------------
~ Management contract or compensatory plan or arrangement filed pursuant to
S-K 601(10)(iii)(A).
# Included as an exhibit to the Company's Form 10-Q filed August 11, 1997
and incorporated herein by reference.
* Included as an exhibit to the Pre-effective Amendment No. 2 to the
Company's S-11 filed October 5, 1993, and incorporated herein by reference
** Included as an exhibit to the Company's Form 10-Q filed December 13, 1993,
and incorporated herein by reference
*** Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
and incorporated herein by reference
+ Included as an exhibit to the Company's Form 10-Q filed May 12, 1994, and
incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
+++ Filed as an exhibit to the Company's Form 8-K report filed March 14, 1997
and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and
incorporated herein by reference.
@@ Included as an exhibit to the Company's Form 10-Q filed May 15, 1997 and
incorporated herein by reference.
@@@ Included as an exhibit to the Company's Form 8-K/A report filed
March 19, 1998 and incorporated herein by reference.
23
+++ (A) First Amendment of Stockholders' Agreement dated
February 10, 1997.
++ (iii) Registration Rights Agreement dated July 10, 1996.
+(n) Stock Grant Plan adopted on January 31, 1994 to grant stock to
employees.
~@(o) Criteria for Restricted Stock Awards under 1993 Long Term Omnibus Plan.
~@(p) Form of 1996 Stock Purchase Award Agreement.
~@(q) Form of 1996 Management Stock Pledge Agreement relating
to the Stock Purchase Award Agreement filed as Exhibit 10(p).
~@(r) Form of Promissory Note relating to 1996 Stock Purchase Award Agreement
filed as Exhibit 10(p).
@@ (s) Revolving Line of Credit Agreement dated May 30,1994 between RRC GA ONE,
Inc., as Borrower and Wachovia Bank of Georgia, N.A., as Lender.
@@ (t) First Modification to Revolving Line of Credit Agreement
dated April 30, 1995 between RRC GA ONE, Inc., as Borrower and
Wachovia Bank of Georgia, N.A., as Lender.
@@ (u) Second Modification to Revolving Line of Credit Agreement dated
December 19, 1995 between RRC GA ONE, Inc., as Original Borrower,
Regency Realty Group, Inc. and New Borrower and Regency Realty
Corporation, Inc., as Guarantor, and Wachovia Bank of Georgia, N.A.,
as Lender.
@@ (v) Third Modification to Revolving Line of Credit Agreement dated April
30, 1996 between Regency Realty Group,Inc. as Borrower, and Wachovia
Bank of Georgia, N.A., as Lender.
@@ (w) Fourth Modification to Revolving Line of Credit Agreement dated
November 1, 1996 between Regency Realty Group,Inc. as Borrower, and
Wachovia Bank of Georgia, N.A., as Lender.
@@ (x) Fifth Modification to Revolving Line of Credit Agreement dated
December 31, 1996 between Regency Realty Group,Inc. as Borrower, and
Wachovia Bank of Georgia, N.A., as Lender.
- --------------------------
~ Management contract or compensatory plan or arrangement filed pursuant to
S-K 601(10)(iii)(A).
# Included as an exhibit to the Company's Form 10-Q filed August 11, 1997
and incorporated herein by reference.
* Included as an exhibit to the Pre-effective Amendment No. 2 to the
Company's S-11 filed October 5, 1993, and incorporated herein by reference
** Included as an exhibit to the Company's Form 10-Q filed December 13, 1993,
and incorporated herein by reference
*** Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
and incorporated herein by reference
+ Included as an exhibit to the Company's Form 10-Q filed May 12, 1994, and
incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
+++ Filed as an exhibit to the Company's Form 8-K report filed March 14, 1997
and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and
incorporated herein by reference.
@@ Included as an exhibit to the Company's Form 10-Q filed May 15, 1997 and
incorporated herein by reference.
@@@ Included as an exhibit to the Company's Form 8-K/A report filed
March 19, 1998 and incorporated herein by reference.
24
@@(y) Third Amendment to Credit Agreement dated March 7, 1997
between Regency Realty Corporation as Borrower, each of the
Guarantors signatory hereto, each of the Lenders signatory
hereto, and Wells Fargo Bank, N.A. and successor in interest
to Wells Fargo Realty Advisors Funding, Inc., as Agent.
@@(z) Fourth Amendment to Credit Agreement dated March 24, 1997
between Regency Realty Corporation as Borrower, each of the
Guarantors signatory hereto, each of the Lenders signatory
hereto, and Wells Fargo Bank, N.A. and successor in interest
to Wells Fargo Realty Advisors Funding, Inc., as Agent.
@@@ (aa) Second Amended and Restated Agreement of Limited Partnership of Regency
Centers, L.P.
21. Subsidiaries of the Registrant
23. Consent of KPMG Peat Marwick LLP
27. Financial Data Table
________________________
~ Management contract or compensatory plan or arrangement filed pursuant to
S-K 601(10)(iii)(A).
# Included as an exhibit to the Company's Form 10-Q filed August 11, 1997
and incorporated herein by reference.
* Included as an exhibit to the Pre-effective Amendment No. 2 to the
Company's S-11 filed October 5, 1993, and incorporated herein by reference
** Included as an exhibit to the Company's Form 10-Q filed December 13, 1993,
and incorporated herein by reference
*** Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
and incorporated herein by reference
+ Included as an exhibit to the Company's Form 10-Q filed May 12, 1994, and
incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
+++ Filed as an exhibit to the Company's Form 8-K report filed March 14, 1997
and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and
incorporated herein by reference.
@@ Included as an exhibit to the Company's Form 10-Q filed May 15, 1997 and
incorporated herein by reference.
@@@ Included as an exhibit to the Company's Form 8-K/A report filed
March 19, 1998 and incorporated herein by reference.
25Schedule
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REGENCY REALTY CORPORATION
Date: March 20, 199812, 1999 By: /s/ Martin E. Stein, Jr.
-----------------------------------------------------------------
Martin E Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 20,199812, 1999 By: /s/ Bruce M. Johnson
-------------------------------------------------------------------
Bruce M. Johnson, Managing Director and
Principal Financial Officer
Date: March 20, 199812, 1999 By: /s/ J. Christian Leavitt
------------------------------------------------------------------
J. Christian Leavitt, Senior Vice
President, Treasurer, SecretaryFinance and PrincipalAccountingPrincipal
Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Date: March 20, 199812, 1999 /s/ Martin E. Stein, Jr.
---------------------------------------------------------------------
Martin E. Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 20, 199812, 1999 /s/ Joan W. Stein
-------------------------
Joan W. Stein, Chairman EmeritusMary Lou Rogers
---------------------------------------------
Mary Lou Rogers, President, Chief Operating
Officer and Director
Date: March 20, 199812, 1999 /s/ Edward L. Baker
--------------------------
Edward L. Baker,Thomas B. Allin
---------------------------------------------
Thomas B. Allin, Director
Date: March 20, 1998
--------------------------12, 1999 /s/ Raymond L. Bank
---------------------------------------------
Raymond L. Bank, Director
Date: March 20, 1998 /s/ J. Alexander Branch, III
---------------------------
J. Alexander Branch, Director
Date: March 20, 199812, 1999 /s/ A. R. Carpenter
-------------------------------------------------------------------------
A. R. Carpenter, Director
Date: March 20, 199812, 1999 /s/ Jeffrey A. Cozad
---------------------------------------------
Jeffrey A. Cozad, Director
Date: March 12, 1999 /s/ J. Dix Druce, Jr.
-------------------------------------------------------------------------
J. Dix Druce, Jr., Director
Date: March 20, 199812, 1999 /s/ Albert D. Ernest, Jr.
----------------------------
Albert D. Ernest, Jr.,John T. Kelley
---------------------------------------------
John T. Kelley, Director
Date: March 20, 199812, 1999 /s/ Douglas S. Luke
-------------------------------------------------------------------------
Douglas S. Luke, Director
26
Date: March 20, 199812, 1999 /s/ Mary Lou Rogers
----------------------------
Mary Lou Rogers,John C. Schweitzer
---------------------------------------------
John C. Schweitzer, Director
Date: March 20, 199812, 1999 /s/ Jonathan L. Smith
----------------------------
Jonathan L. Smith,Lee Wielansky
---------------------------------------------
Lee Wielansky, Director
Date: March 20, 199812, 1999 /s/ Richard W. Stein
-----------------------------
Richard W. Stein,Terry N. Worrell
---------------------------------------------
Terry N. Worrell, Director
Date: March 20, 1998 /s/ Lee S. Wielansky
----------------------------
Lee S. Wielansky, Director
27
REGENCY REALTY CORPORATION
INDEX TO FINANCIAL STATEMENTS
Regency Realty Corporation
Independent Auditors' Report F-2
Consolidated Balance Sheets as of December 31, 19971998 and 19961997 F-3
Consolidated Statements of Operations for the years ended
December 31, 1998, 1997, 1996, and 19951996 F-4
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1998, 1997 1996 and 19951996 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996 and 1995 F-8F-6
Notes to Consolidated Financial Statements F-10F-8
Financial Statement Schedule
Independent Auditors' Report on Financial Statement Schedule S-1
Schedule III - Regency Realty Corporation Combined Real Estate and
Accumulated Depreciation - December 31, 19971998 S-2
All other schedules are omitted because they are not applicable or
because information required therein is shown in the financial
statements or notes thereto.
F-1
F-2
Independent Auditors' Report
The Shareholders and Board of Directors
Regency Realty Corporation:
We have audited the accompanying consolidated balance sheets of Regency Realty
Corporation as of December 31, 19971998 and 1996,1997, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1997.1998. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Regency Realty
Corporation as of December 31, 19971998 and 1996,1997, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 19971998 in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
---------------------------
KPMG Peat Marwick LLP
Jacksonville, Florida
February 3, 1998,1, 1999, except for Note 12,13,
as to which the date is March 1, 1998
F-21999
REGENCY REALTY CORPORATION
Consolidated Balance Sheets
December 31, 1997 and 1996F-3
REGENCY REALTY CORPORATION
Consolidated Balance Sheets
December 31, 1998 and 1997
19961998 1997
---- ----
Assets
Real estate investments, at cost (notes 2, 4, 5 and 9):
Land $ 257,669,018 177,245,784 84,186,483
Buildings and improvements 925,514,995 622,555,583 304,820,998
Construction in progress - development for investment 15,647,659 13,427,370 1,665,144
Construction in progress - development for sale 20,869,915 20,173,039
1,695,062
------------ ----------------------------- ------------------
1,219,701,587 833,401,776 392,367,687
Less: accumulated depreciation 58,983,738 40,795,801
26,213,225
------------ ----------------------------- ------------------
1,160,717,849 792,605,975 366,154,462
Investments in real estate partnerships (note 3)4) 30,630,540 999,730
1,035,107
------------ ----------------------------- ------------------
Net real estate investments 1,191,348,389 793,605,705 367,189,569
Cash and cash equivalents (note 4)19,919,693 16,586,094 8,293,229
Tenant receivables, net of allowance for uncollectible accounts of
$1,162,570$1,787,686 and $832,091$1,162,570 at December 31, 1998 and
1997, and
1996, respectively 16,758,917 9,546,584 5,281,419
Deferred costs, less accumulated amortization of $3,842,914$5,295,336 and
$2,519,019$3,842,914 at December 31, 1998 and 1997, and 1996, respectively 6,872,023 4,252,991 3,961,439
Other assets 5,208,278 2,857,217
1,798,393
------------ ----------------------------- ------------------
$ 1,240,107,300 826,848,591
386,524,049
============ ============================= ==================
Liabilities and Stockholders' Equity
Liabilities:
Mortgage loansNotes payable (note 4)5) 430,494,910 229,919,242 97,906,288
Acquisition and development line of credit (note 5) 117,631,185 48,131,185 73,701,185
Accounts payable and other liabilities 19,936,424 11,597,232 6,300,640
Tenants' security and escrow deposits 3,110,370 2,319,941
1,381,673
------------ ----------------------------- ------------------
Total liabilities 571,172,889 291,967,600
179,289,786
------------ -----------
Redeemable------------------ ------------------
Series A preferred units (note 6) 78,800,000 -
Exchangeable operating partnership units (notes 2 and 6) 27,834,330 13,777,156 508,486
Limited partners' interest in consolidated partnerships (note 2)11,558,618 7,477,182
-
------------ ----------------------------- ------------------
118,192,948 21,254,338
508,486
------------ ----------------------------- ------------------
Stockholders' equity (notes 2, 6, 7 and 8):
Common stock $.01 par value per share: 150,000,000 shares
authorized; 23,992,03725,488,989 and 10,614,90523,992,037 shares issued and
outstanding at December 31, 1998 and 1997 and 1996, respectively254,889 239,920 106,149
Special common stock - 10,000,000 shares authorized:
Class B $.01 par value per share, 2,500,000
shares issued and outstanding 25,000 25,000
Additional paid in capital 578,466,708 535,498,878 223,080,831
Distributions in excess of net income (19,395,744) (20,494,893) (13,981,770)
Stock loans (8,609,390) (1,642,252)
(2,504,433)
------------- ------------------------------ ------------------
Total stockholders' equity 550,741,463 513,626,653
206,725,777
------------- ------------------------------ ------------------
Commitments and contingencies (notes 9,119, 10 and 12)13)
$ 1,240,107,300 826,848,591
386,524,049
============= ============================= ==================
See accompanying notes to consolidated financial statements.
F-3
F-4
REGENCY REALTY CORPORATION
Consolidated Statements of Operations
Years ended December 31, 1998, 1997 and 1996
1998 1997 1996 and 1995
1997 1996 1995
---- ---- ----
Revenues:
Minimum rent (note 9) $ 103,365,322 70,102,765 34,705,905
25,044,201
Percentage rent 3,012,105 2,151,379 997,981 672,986
Recoveries from tenants 17,051,82724,109,519 16,600,925 7,729,404 5,837,773
Management, leasing and brokerage fees 11,862,784 8,447,615 3,444,287 2,425,733
Equity in income of investments in
real estate partnerships (note 3)4) 946,271 33,311 69,990
4,226
----------- ---------- -------------------------- ---------------- ----------------
Total revenues 97,786,897143,296,001 97,335,995 46,947,567
33,984,919
----------- ---------- -------------------------- ---------------- ----------------
Operating expenses:
Depreciation and amortization 25,046,001 16,303,159 8,058,643 5,853,730
Operating and maintenance 18,455,672 14,212,555 7,655,934 5,682,967
General and administrative (note 10)15,064,148 9,963,926 6,048,140 4,894,432
Real estate taxes 12,388,521 8,691,576 4,409,460
3,000,557
----------- ---------- -------------------------- ---------------- ----------------
Total operating expenses 70,954,342 49,171,216 26,172,177
19,431,686
----------- ---------- -------------------------- ---------------- ----------------
Interest expense (income):
Interest expense 28,786,431 19,667,483 11,476,555
9,422,738
Interest income (1,957,575) (1,000,227) (666,031)
(454,207)
----------- ---------- -------------------------- ---------------- ----------------
Net interest expense 26,828,856 18,667,256 10,810,524
8,968,531
----------- ---------- -------------------------- ---------------- ----------------
Income before minority interests and sale
of real estate investments 45,512,803 29,497,523 9,964,866
Gain on sale of real estate investments 10,725,975 450,902 -
---------------- ---------------- ----------------
Income before minority interest 56,238,778 29,948,425 9,964,866 5,584,702
----------- ---------- ----------
Minority interest of redeemableexchangeable partnership units 2,041,823 -(1,826,273) (2,041,823) -
Minority interest of limited partners' 504,947partners (464,098) (504,947) -
Minority interest preferred unit distribution (3,358,333) - -
----------- ---------- ----------
Total minority interests 2,546,770 - -
----------- ---------- -------------------------- ---------------- ----------------
Net income 50,590,074 27,401,655 9,964,866 5,584,702
Preferred stock dividends - 57,721 590,904
----------- ---------- ----------- (57,721)
---------------- ---------------- ----------------
Net income for common stockholders $ 50,590,074 27,401,655 9,907,145
4,993,798
=========== ========== ========================== ================ ================
Net income per share (note 7):
Basic $ 1.80 1.28 .82 .75
=========== =========== ===========0.82
================ ================ ================
Diluted $ 1.75 1.23 .82 .75
=========== =========== ===========0.82
================ ================ ================
See accompanying notes to consolidated financial statements.
F-4statements
F-5
REGENCY REALTY CORPORATION
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1998, 1997 and 1996
and 1995Class B Additional Distributions Total
Preferred Common Class BCommon Paid In in excess of Stock Stockholders'
Stock CommonStock Stock Capital Net Income ----- -----Loans Equity
----------- --------- -------- ------------- ------------ ------- ---------------------- --------------
Balance at December 31, 1994 $ 5,748,835 64,546 - 101,069,294 (2,719,738)
Common stock issued as compensation - 516 - 831,083 -
Series B Preferred stock issued (note 6) 18,250,000 - - - -
Series B Preferred stock converted
to Class B common stock (18,250,000) - 9,125 18,240,875 -
Class B common stock issued (note 6) - - 15,875 31,734,125 -
Series A Preferred stock converted
to common stock (3,832,567) 2,225 - 3,830,342 -
Partial forgiveness of stock loans (note 8) - - - - -
Cash dividends declared:
Preferred stock - - - - (590,904)
Common stock, $1.58 per share - - - - (10,347,248)
Stock issuance costs - - - (484,478) -
Net income - - - - 5,584,702
----------- --------- ------------- ----------- ---------
Balance at
December 31, 1995 $ 1,916,268 67,287 25,000 155,221,241 (8,073,188) (2,150,034) 147,006,574
Common stock issued to
SC-USREALTY(noteSC-USREALTY (note 6) - 36,518 - 63,373,745 - Common stock purchased by executive
officers (note 8) - 800 - 1,339,200 -63,410,263
Common stock issued as
compensation, - 532 - 1,091,375 -
Common stock purchased by
directors or officers, or issued
under stock options - 691,401 - 139,9312,570,506 - (1,273,000) 1,298,907
Series A Preferred stock converted
to common stock (1,916,282)(1,916,268) 943 - 1,915,339 - Series A Preferred stock converted - partial share payment 14 - - - -
Partial forgiveness of
stock loans (note 8) - - - - - 918,601 918,601
Cash dividends declared:
Preferred stock - - - - (57,721) - (57,721)
Common stock, $1.62 per share - - - - (15,815,727) - (15,815,727)
Net income - - - - 9,964,866 - 9,964,866
----------- --------- -------- ------------- ----------- ------------ ------------ -------------
Balance at
December 31, 1996 $ - 106,149 25,000 223,080,831 (13,981,770) (2,504,433) 206,725,777
Common stock issued to
SC-USREALTY(noteSC-USREALTY (note 6) - 75,135 - 158,475,802 - - 158,550,937
Common stock issued in
secondary offering, net (note 6) - 25,448 - 65,487,586 - - 65,513,034
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - 1,359 - 3,026,241 - - 3,027,600
Common stock issued for
partnership units redeemed (note 2) - 30,271 - 81,246,827 - - 81,277,098
Common stock issued to
acquire real estate (note 2) - 1,558 - 4,181,591 - - 4,183,149
Partial forgiveness or
repayment of stock loans (note 8) - - - - - 862,181 862,181
Cash dividends declared:
Common stock, $1.68 per share - - - - (33,914,778) - (33,914,778)
Net income - - - - 27,401,655 - 27,401,655
----------- --------- -------- ------------- ----------- ---------------------- ------------ -------------
Balance at
December 31, 1997 $ - 239,920 25,000 535,498,878 (20,494,893) =========== ========= ============= =========== ============
See accompanying notes to consolidated financial statements.
F-5
REGENCY REALTY CORPORATION
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1997, 1996 and 1995
Total
Stock Stockholders'
Loans Equity
----- ------
Balance at December 31, 1994 $ (2,402,978) 101,759,959
Common stock issued as compensation - 831,599
Series B Preferred stock issued (note 6) - 18,250,000
Series B Preferred stock converted
to Class B common stock - -
Class B common stock issued (note 6) - 31,750,000
Series A Preferred stock converted
to common stock - -
Partial forgiveness of stock loans (note 8) 252,944 252,944
Cash dividends declared:
Preferred stock - (590,904)
Common stock, $1.58 per share - (10,347,248)
Stock issuance costs - (484,478)
Net income - 5,584,702
-------------- -------------
Balance at December 31, 1995 $ (2,150,034) 147,006,574(1,642,252) 513,626,653
Common stock issued to
SC-USREALTY(note (note 6) - 63,410,263
Common stock purchased by executive
officers (note 8) (1,273,000) 67,000
Common stock issued as compensation4,358 - 1,091,907
Common stock purchased by directors - 140,000
Series A Preferred stock converted
to common stock9,637,208 - - Series A Preferred stock converted -
partial share payment - 14
Partial forgiveness of stock loans (note 8) 918,601 918,601
Cash dividends declared:
Preferred stock - (57,721)
Common stock, $1.62 per share - (15,815,727)
Net income - 9,964,866
-------------- -------------
Balance at December 31, 1996 $ (2,504,433) 206,725,777
Common stock issued to SC-USREALTY(note 6) - 158,550,937
Common stock issued in secondary
offering, net (note 6) 65,513,0349,641,566
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - 3,027,6004,208 - 10,746,701 - (7,409,151) 3,341,758
Common stock issued for
partnership units redeemed (note 2) - 81,277,098752 - 1,670,631 - - 1,671,383
Common stock issued to
acquire real estate (note 2) - 4,183,1495,651 - 14,263,472 - - 14,269,123
Reallocation of minority interest - - - 6,649,818 - - 6,649,818
Partial forgiveness or
repayment of stock loans (note 8) 862,181 862,181- - - - - 442,013 442,013
Cash dividends declared:
Common stock, $1.68$1.76 per share - (33,914,778)- - - (49,490,925) - (49,490,925)
Net income - 27,401,655
-------------- --------------- - - 50,590,074 - 50,590,074
----------- --------- -------- ------------- ------------ ------------ -------------
Balance at
December 31, 19971998 $ (1,642,252) 513,626,653
============== ==============- 254,889 25,000 578,466,708 (19,395,744) (8,609,390) 550,741,463
=========== ========= ======== ============= ============ ============ =============
See accompanying notes to consolidated financial statements.
F-6
REGENCY REALTY CORPORATION
Consolidated Statements of Cash Flows
Years endedEnded December 31, 1998, 1997 and 1996
1998 1997 1996 and 1995
1997 1996 1995
---- ---- ----
Cash flows from operating activities:
Net income $ 50,590,074 27,401,655 9,964,866 5,584,702
Adjustments to reconcile net income to net
cashCash provided by operating activities:
Depreciation and amortization 25,046,001 16,303,159 8,058,643 5,853,730
Deferred financing cost and debt premium amortization (822,276) 907,224 699,424
582,362Stock based compensation 2,422,547 2,561,139 2,940,414
Minority interest of redeemable partnership units 1,826,273 2,041,823 -
Minority interest preferred unit distribution 3,358,333 - -
Minority interest of limited partners 464,098 504,947 - -
Equity in income of investments in real estate partnerships (946,271) (33,311) (69,990) (4,226)
Gain on sale of office buildingreal estate investments (10,725,975) (450,902) - -
Changes in assets and liabilities:
(Increase) decrease in tenantTenant receivables (5,143,938) (3,596,964) (2,660,656)
9,879
Increase in deferredDeferred leasing commissions (2,337,253) (1,120,184) (585,889)
(479,454)
Increase in otherOther assets (4,059,535) (1,641,108) (1,019,637)
(619,800)
Increase in tenants'Tenants' security deposits 517,396 480,743 405,158
304,378
Increase in accountsAccounts payable and other liabilities 2,247,138 1,212,000 4,660,370
------------ ----------- ----------4,811,991 (314,001) (1,728,414)
---------------- ----------------- -----------------
Net cash provided by operating activities 65,001,465 43,044,220 16,003,919
15,891,941
------------ ----------- -------------------------- ----------------- -----------------
Cash flows from investing activities:
Acquisition and development of real estate (229,348,139) (162,244,207) (102,933,980) (59,537,217)
Investment in real estate partnershippartnerships (29,068,392) - (881,309)
-
Capital improvements (8,325,492) (5,226,138) (2,898,250) (1,978,643)
Construction in progress for resalesale, net of reimbursement (696,876) (23,776,953) (3,360,206) -
Proceeds from sale of propertyreal estate investments 30,662,197 2,645,229 - -
Distributions received from real estate partnership investments 383,853 68,688 231,581
12,146
------------ ------------ --------------------------- ----------------- -----------------
Net cash used in investing activities (236,392,849) (188,533,381) (109,842,164)
(61,503,714)
------------ ------------ --------------------------- ----------------- -----------------
Cash flows from financing activities:
Net proceeds from common stock issuance 10,225,529 225,094,980 63,617,263 (484,478)
Series B preferred stock issued - - 18,250,000
Class B common stock issued - - 31,750,000
Proceeds from issuance of redeemable
partnership units 7,694 2,255,140 - -
Distributions to redeemable partnership unit holders (2,023,132) (1,954,375) (16,846)
Contributions from limited partners in consolidated partnerships 4,289,995 - Distributions-
Net distributions to limited partners in consolidated partnerships (672,656) (1,124,480) -
Distributions to preferred unit holders (3,358,333) - -
Dividends paid to stockholders (49,490,925) (33,914,778) (16,179,518)
(10,760,237)
(Repayment) orNet proceeds from issuance of Series A preferred units 78,800,000 - -
Net proceeds from term notes 99,758,000 - -
Proceeds (repayment) of acquisition and development
line of credit, net 69,500,000 (25,570,000) 51,361,382 (18,736,629)
Proceeds from mortgage loans payable 7,345,000 15,972,920 1,518,331
26,773,540
RepaymentsRepayment of mortgage loans payable (37,354,368) (26,408,932) (808,068) (417,851)
Deferred financing costs (2,301,821) (568,449) (762,771)
(221,708)
------------ ------------- ----------------------------- ----------------- -----------------
Net cash provided by financing activities 174,724,983 153,782,026 98,729,773
46,152,637
------------ ------------- ---------------------------- ----------------- -----------------
Net increase in cash and cash equivalents 3,333,599 8,292,865 4,891,528 540,864
------------ ------------- ------------
Cash and cash equivalents at beginning of periodyear 16,586,094 8,293,229 3,401,701
2,860,837
------------ ------------- ---------------------------- ----------------- -----------------
Cash and cash equivalents at end of periodyear $ 19,919,693 16,586,094 8,293,229
3,401,701
=========== ============= ============
F-7
REGENCY REALTY CORPORATION
Consolidated Statements of Cash Flows
Years Ended December 31, 1997, 1996 and 1995
-continued-
1997 1996 1995
---- ---- ----
================ ================= =================
Supplemental disclosure of cash flow information - cash paid
for interest (including(net of capitalized interest of approximately
$3,417,000, $1,896,000 and $381,000 in 1998, 1997 and $285,000
in 1997, 1996, and 1995,
respectively) $ 20,527,091 10,979,841 9,147,175
=========== =========== ==========24,693,895 18,631,091 10,598,841
================ ================= =================
Supplemental disclosure of non cashnon-cash transactions:
Mortgage loans assumed from sellers ofto acquire real estate $142,448,966$ 132,832,342 142,448,966 3,918,752
-
============ =========== ==========
Redeemable================ ================= =================
Exchangeable operating partnership units and common
stock issued to sellers ofacquire real estate $ 37,023,849 96,380,706 525,332
-
============ =========== ========================== ================= =================
See accompanying notes to consolidated financial statements.
F-8
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 19961998
1. Summary of Significant Accounting Policies
(a) Organization and Principles of Consolidation
Regency Realty Corporation (the Company) was formed for the
purpose of managing, leasing, brokering, acquiring, and developing
shopping centers. The Company also provides management, leasing,
brokerage and development services for real estate not owned by
the Company.
The accompanying consolidated financial statements include the
accounts of the Company,Regency Realty Corporation, its wholly owned qualified
REIT subsidiaries, and its majority owned or controlled
subsidiaries and partnerships.partnerships (the "Company" or "Regency"). All
significant intercompany balances and transactions have been
eliminated in the consolidated financial statements. The Company
owns approximately 91%96% of the outstanding common units of Regency
Centers, L.P. ("RCLP" or the "Partnership" formerly known as
Regency Retail Partnership, L.P., ("RRLP") and partnership interests
ranging from 51% to 93% in fourfive majority owned real estate
partnerships (the "Majority Partnerships"). The equity interests
of third parties held in RRLPRCLP and the Majority Partnerships are
included in the consolidated financial statements as redeemableexchangeable
operating partnership units and limited partners' interests in
consolidated partnerships.partnerships, respectively. The Company is a
qualified real estate investment trust ("REIT") which began
operations in 1993.
(b) Revenues
The Company leases space to tenants under agreements with varying
terms. Leases are accounted for as operating leases with minimum
rent recognized on a straight-line basis over the term of the
lease regardless of when payments are due. Accrued rents are
included in tenant receivables. Minimum rent has been adjusted to
reflect the effects of recognizing rent on a straight line basis.
Substantially all of the lease agreements contain provisions which
provide additional rents based on tenants' sales volume
(contingent or percentage rent) or reimbursement of the tenants'
share of real estate taxes and certain common area maintenance
(CAM) costs. These additional rents are reflected on the accrual
basis. On May 22, 1998, the Emerging Issues Task Force (EITF)
reached a consensus on Issue 98-9 "Accounting for Contingent Rent
in Interim Financial Periods". The EITF has stated that lessors
should defer recognition of contingent rent that is based on
meeting specified targets until those specified targets are met
and not ratably throughout the year. The Company has previously
recognized contingent rent ratably over the year based on the
historical trends of its tenants. Although the EITF subsequently
reversed its original consensus related to contingent rent, the
Company has adopted the provisions of Issue 98-9 prospectively and
has ceased the recognition of contingent rents until such time as
its tenants have achieved their specified target. The effect of
the adoption was not material to the financial statements during
1998, since most of the Company's tenants had met their specified
targets prior to year end and contingent rents were appropriately
recognized.
Management, leasing, brokerage and development fees are recognized
as revenue when earned. F-9
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
(c) Real Estate Investments
Land, buildings and improvements are recorded at cost. All direct
and indirect costs clearly associated with the acquisition,
development and construction of real estate projects owned by the
Company are capitalized as buildings and improvements while
maintenanceexcept for
operating properties acquired. Effective March 19, 1998, the EITF
ruled in Issue 97-11, "Accounting for Internal Costs Relating to
Real Estate Property Acquisitions", that only internal costs of
identifying and acquiring non-operating properties that are
directly identifiable with the acquired properties should be
capitalized, and that all internal costs associated with
identifying and acquiring operating properties should be expensed
as incurred. The Company had previously capitalized direct costs
associated with the acquisition of operating properties as a cost
of the real estate. The Company has adopted EITF 97-11 effective
March 19, 1998. During 1997, the Company capitalized approximately
$1.5 million of internal costs related to acquiring operating
properties. Through the effective date of EITF 97-11, the Company
has capitalized $855,000 of internal acquisition costs. For the
remainder of 1998, the Company incurred approximately $1.5 million
of internal costs related to acquiring operating properties which
was expensed.
Maintenance and repairs which do not improve or extend the useful
lives of the respective assets are reflected in operating and
maintenance expense. The property cost includes the capitalization
of interest expense incurred during construction in accordance
with generally accepted accounting principles.
Depreciation is computed using the straight line method over
estimated useful lives up to forty years for buildings and
improvements, term of lease for tenant improvements, and five to
seven years for furniture and equipment.
F-9
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 1996
(d) Income Taxes
The Company qualifies and intends to continue to qualify as a REIT
under the Internal Revenue Code. As a REIT, the Company is allowed
to reduce taxable income by all or a portion of its distributions
to stockholders. As distributions have exceeded taxable income, no
provision for federal income taxes has been makemade in the
accompanying consolidated financial statements.
Earnings and profits, which determine the taxability of dividends
to stockholders, differ from net income reported for financial
reporting purposes primarily because of different depreciable
lives and bases of rental properties and differences in the timing
of recognition of earnings upon disposition of properties.
Regency Realty Group, Inc. and Regency Realty Group II, Inc. file separate
tax returns and are, the Company's management company
subsidiary ("RRG"), is subject to Federal and State income taxes. The two
Management Companiestaxes
and files separate tax returns. RRG had combined taxable income of
$277,227$1,052,233, $918,763 and $150,674$0 for the years ended December 31, 1998,
1997 and 1996, respectively, andrespectively. RRG incurred a taxable
loss for the year ended December 31, 1995. Regency Realty Group, Inc. had a net
operating loss carryforward of $1,057,644 at December 31, 1997, and accordingly
paid no income tax in 1997. No income tax benefit has been recorded for the net
operating loss carryforwards. Regency Realty Group II, Inc. paid $330,441 in Federal and State income
tax of $344,833 and $327,021 in 1998 and 1997, respectively, and
hadpaid no operations priortax in 1996.
F-10
REGENCY REALTY CORPORATION
Notes to 1997.Consolidated Financial Statements
December 31, 1998
(d) Income Taxes (continued)
At December 31, 1998 and 1997, the net book basis of real estate
assets exceeds the tax basis by approximately $122 million and
$39.6 million, respectively, primarily due to the difference
between the cost basis of the assets acquired and their carryover
basis recorded for tax purposes.
At
December 31, 1996, the tax basis of real estate assets exceeds the
net book basis by approximately $1.9 million primarily due to
higher depreciation expense for book purposes.
The following summarizes the tax status of dividends paid during
the years ended December 31:
1997 1996 1995
---- ---- ----
Dividend per Share $1.68 1.62 1.58
Ordinary Income31 (unaudited):
1998 1997 1996
---- ---- ----
Dividend per share $1.76 1.68 1.62
Ordinary income 71% 85% 77% 64%
Capital Gain - - -
Return of
Capital gain 2% - -
Return of capital 27% 15% 23% 36%
(e) Deferred Costs
Deferred costs consist of internal and external commissions
associated with leasing the rental property and loan costs
incurred in obtaining financing which are limited to initial
direct and incremental costs. The net leasing commission balance
was $1,738,701$3.3 and $1,108,374$1.7 million at December 31, 19971998 and 1996,1997,
respectively. The net loan cost balance was $2,514,290$3.5 and $2,853,065$2.5 million
at December 31, 19971998 and 1996,1997, respectively. Such costs are
deferred and amortized using the straight-line method over the terms of the respective leases and
loans.
(f) Fair Value of Financial Instruments
The fair value of the Company's mortgage loans payable and
acquisition and development line of credit are estimated based on
the current rates available to the Company for debt of the same
remaining maturities. Therefore, the Company considers their
carrying value to be a reasonable estimation of their fair value.
(g) Earnings Per Share
The Company adoptedapplies the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 128,"Earnings "Earnings per Share", on
December 31, 1997. This statement governs to the
computation, pre
sentation,presentation, and disclosure requirements forof earnings
per share
("EPS") for entities with publicly held
F-10
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 1996
(g) Earnings per Share (continued)
common stock. Effective December 31, 1997 the Company has
calculated EPS in accordance with SFAS No. 128 and all periods
presented have been restated.
Netshare. Basic net income per share of common stock is computed
based upon the weighted average number of common shares
and share equivalents
outstanding during the year. When dilutive,Diluted net income per share also
includes common share equivalents for stock options, redeemableexchangeable
partnership units, and Class B common stock are
included as share equivalents (seewhen dilutive. See
note 7 for the calculation of earnings per share).
(h)share.
(g) Cash and Cash Equivalents
Any instruments which have an original maturity of ninety days or
less when purchased are considered cash equivalents.
(i)(h) Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's
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.
(j) F-11
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
(i) Impairment of Long-Lived Assets
The Company adoptedapplies the provisions of SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of", on January 1, 1996.. This Statement requires that long-lived assets
and certain identifiable intangibles be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to
be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceed the fair
value of the assets. Adoption of this Statement did not have a
material impact on the Company's financial position, results of
operations, or liquidity.
(k)(j) Stock Option Plan
Prior to January 1, 1996, theThe Company accounted for its stock
option plan in accordance withapplies the provisions of Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees", and related interpretations. As such,
compensation expense would be recorded on the date of grant only
if the current market price of the underlying stock exceeded the
exercise price. On January 1, 1996, the Company adopted SFAS No. 123, "Accounting
for Stock-BasedStock Based Compensation", which requires
entities toallows companies a choice in
the method of accounting for stock options. Entities may recognize
as expense over the vesting period the fair value of all
stock-based awards on the date of grant.
Alternatively,grant or SFAS No. 123 also
allowspermits entities to continue to apply the provisions of APB
Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants
made in 1995 and future years as if the fair-value-based method defined in SFAS No. 123 had
been applied. APB Opinion No. 25 "Accounting for Stock Issued to
Employees", and related interpretations states that compensation
expense would be recorded on the date of grant only if the current
market price of the underlying stock exceeded the exercise price.
The Company has elected to continue to apply the provisions of APB
Opinion No. 25 and provide the pro forma disclosure provisions of
SFAS No. 123.
(k) Statement of Financial Accounting Standards No. 131
The FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"), which is effective for fiscal years
beginning after December 15, 1997. FAS 131 establishes standards
for the way that public business enterprises report information
about operating segments in annual financial statements and
requires that those enterprises report selected information about
operating segments in interim and annual financial reports. The
Company adopted FAS 131 as disclosed in note 3.
(l) Reclassifications
Certain reclassifications have been made to the 1995 and 19961997 amounts to
conform to classifications adopted in 1997.
F-111998.
F-12
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 19961998
2. Acquisitions of Shopping Centers
On March 7, 1997,During 1998, the Company acquired through its partnership, Regency
Retail Partnership, L.P.31 shopping centers fee simple
for approximately $355.9 million and also invested $28.4 million in 12
joint ventures ("RRLP"JV Properties"), substantiallyfor a total investment of $384.3
million in 43 shopping centers ("1998 Acquisitions"). Included in the
1998 Acquisitions are 32 shopping centers acquired from various entities
comprising the Midland Group ("Midland"). Of the 32 Midland centers, 31
are anchored by Kroger, and 12 are owned through joint ventures in which
the Company's ownership interest is 50% or less. The Company's investment
in the properties acquired from Midland is $236.6 million at December 31,
1998. The Company expects to acquire all of the interests in two of the
JV Properties for approximately $20.3 million during 1999 which will
increase its total investment in the Midland properties to $256.9
million. In addition, during 1999 and 2000, the Company may pay
contingent consideration of up to an estimated $23 million, through the
issuance of Partnership units and the payment of cash. The amount of such
consideration, if issued, will depend on the satisfaction of certain
performance criteria relating to the assets ofacquired from Midland.
Transferors who received cash at the initial Midland closing will receive
contingent future consideration in cash rather than units.
The Company acquired 35 shopping centers during 1997 (the "1997
Acquisitions") for approximately $395.7 million. Included in the 1997
Acquisitions are 26 shopping centers acquired from Branch Properties
L.P. ("Branch"), a privately held real estate firm
based in Atlanta, Georgia, for $232.4 million. The assets acquired from
Branch included 100% fee simple interests in 19 operating shopping
centers and 1 center under development, and also partnership interests
(ranging from 50% to 93%) in four partnerships with outside investors
that owned 4 operating shopping centers and 2 centers under development.
The Company also assumed the third party property management contracts of
Branch on approximately 3 million SF of shopping center gross leasable
area ("GLA") that generate management fees and leasing commission
revenues.
At closing and during 1997, RRLP issued 3,572,427 units of limited
partnership interest (the "Units") andDuring 1998, the Company issued 155,797 shares
of common stock in exchange for the assets acquired and the liabilities
assumed from Branch. The Units are redeemable on a one-for-one basis in
exchange for shares of common stock. On June 13, 1997, 3,027,080
partnership units were converted to common stock. The purchase price of
Branch, as recorded in the Company's consolidated financial statements,
includes approximately $96.4 million for Units and common stock issued
(based upon $26.85, the fair market value of the Company's common stock
on the date the acquisition was publicly announced), $27.3 million in
cash, $7.8 million for transaction costs and to establish reserves, and
$97.2 million of assumed debt. Limited partners' interest in consolidated
partnerships of $7.9 million was recorded for the four partnerships with
outside investors. For purposes of determining minority interest, the
Company owned 32.6% of the outstanding Units in the Partnership until the
approval by the Company's shareholders at its annual meeting on June 12,
1997, at which time 3,027,080 of the outstanding Units held by Unit
Holders were redeemed for Common Stock. At completion of the redemption,
the Company owned approximately 91% of the outstanding Units of the
Partnership.
Additional721,997
additional Units and shares of common stock may be issued onvalued at $18.2 million to
Branch as contingent consideration for the fifteenth day after the first, second and third anniversariessatisfaction of the
closing (each an "Earn-Out Closing"), based on thecertain
performance criteria of the properties acquired (the "Property Earn-Out").acquired. The formula forCompany expects to
issue the Property Earn-Out provides for calculating increases in value on a
property-by-property basis, based on increases in net incomeremaining contingent consideration, 298,064 Units, during 1999.
The operating results of the year
of calculation. The Property Earn-Out is limited to 721,997 units at the
first Earn-Out Closing1998 and 1,020,061 units at all Earn-Out Closings
(including the first Earn-Out Closing).
Including the acquisition of the properties from Branch, the Company
acquired or completed development of 38 shopping centers in 1997 and 13
shopping centers in 1996 (the "Acquisitions") accounted for as purchases,
at cost totaling approximately $406.9 million and $107.1 million,
respectively, through the issuance of common stock, partnership units,
assumed mortgage loans and cash. The operating resultsAcquisitions are included in
the Company's consolidated financial statements from the date each
property was acquired. The following unaudited pro forma information
presents the consolidated results of operations as if theall 1998 and 1997
Acquisitions had occurred on January 1, 1996, after giving effect1997. Such pro forma information
reflects adjustments to certain
adjustments including1) increase depreciation, interest expense, additionaland
general and administrationadministrative costs, interest expense on new debt incurred,2) remove the office buildings sold,
and an
increase in3) adjust the weighted average common shares, outstanding forand common stock, operating partnership units, and Class B common stockequivalent
shares outstanding issued to acquire the shopping centers as if shares and units had been issued on
January 1, 1996.properties. Pro forma revenues
would have been $112.9 million$156.4 and $102.4$144.4 million in 19971998 and 1996,1997, respectively.
Pro forma net income for common stockholders would have been $27.8 million$44.5 and
$10.5$28.0 million in 19971998 and 1996,1997, respectively. Pro forma basic net income
per share would have been $1.20$1.55 and $.63$1.31 in 19971998 and 1996,1997, respectively.
Pro forma diluted net income per share would have been $1.17$1.52 and $.60,$1.22,
in 1998 and 1997, respectively. This data does not purport to be
indicative of what would have occurred had the Acquisitions been made on
January 1, 1996,1997, or of results which may occur in the future.
F-12
F-13
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
3. Segments
The Company was formed, and currently operates, for the purpose of 1)
operating and developing Company owned retail shopping centers (Retail
segment), and 2) providing services including property management,
leasing, brokerage, and construction and development management for
third-parties (Service operations segment). The Company had previously
operated four office buildings, all of which have been sold during 1998
and 1997 (Office buildings segment). The Company's reportable segments
offer different products or services and are managed separately because
each requires different strategies and management expertise. There are no
material inter-segment sales or transfers.
The Company assesses and measures operating results starting with Net
Operating Income for the Retail and Office Buildings segments and Income
for the Service operations segment and converts such amounts into a
performance measure referred to as Funds From Operations (FFO). The
operating results for the individual retail shopping centers have been
aggregated since all of the Company's shopping centers exhibit highly
similar economic characteristics as neighborhood shopping centers, and
offer similar degrees of risk and opportunities for growth. FFO as
defined by the National Association of Real Estate Investment Trusts
consists of net income (computed in accordance with generally accepted
accounting principles) excluding gains (or losses) from debt
restructuring and sales of income producing property held for investment,
plus depreciation and amortization of real estate, and adjustments for
unconsolidated investments in real estate partnerships and joint
ventures. The Company considers FFO to be the industry standard for
reporting the operations of real estate investment trusts ("REITs").
Adjustments for investments in real estate partnerships are calculated to
reflect FFO on the same basis. While management believes that FFO is the
most relevant and widely used measure of the Company's performance, such
amount does not represent cash flow from operations as defined by
generally accepted accounting principles, should not be considered an
alternative to net income as an indicator of the Company's operating
performance, and is not indicative of cash available to fund all cash
flow needs. Additionally, the Company's calculation of FFO, as provided
below, may not be comparable to similarly titled measures of other REITs.
The accounting policies of the segments are the same as those described
in note 1. The revenues, FFO, and assets for each of the reportable
segments are summarized as follows for the years ended as of December 31,
1998, 1997, and 19961996. Non-segment assets to reconcile to total assets
include cash, accounts receivable and deferred financing costs.
F-14
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
3. Segments (continued)
1998 1997 1996
---- ---- ----
Revenues:
Retail segment $ 130,900,785 84,203,386 39,004,931
Service operations segment 11,862,784 8,447,615 3,444,287
Office buildings segment 532,432 4,684,994 4,498,349
================ ================ =================
Total revenues $ 143,296,001 97,335,995 46,947,567
================ ================ =================
Funds from Operations:
Retail segment net operating income $ 100,239,863 63,056,124 28,652,114
Service operations segment income 11,862,784 8,447,615 3,444,287
Office buildings segment net operating income 349,161 2,928,125 2,785,772
Adjustments to calculate consolidated FFO:
Interest expense (28,786,431) (19,667,483) (11,476,555)
Interest income 1,957,575 1,000,227 666,031
Earnings from recurring land sales 901,853 - -
General and administrative (15,064,148) (9,963,926) (6,048,140)
Non-real estate depreciation (679,740) (406,113) (49,200)
Minority interests of limited partners (464,098) (504,947) -
Minority interests in depreciation
and amortization (526,018) (285,280) -
Share of joint venture depreciation
and amortization 688,686 59,038 39,626
Dividends on preferred shares and units (3,358,333) 0 (57,721)
---------------- ---------------- -----------------
Funds from Operations 67,121,154 44,663,380 17,956,214
---------------- ---------------- -----------------
Reconciliation to net income for common
stockholders:
Real estate related depreciation
and amortization (24,366,261) (15,897,046) (8,009,443)
Minority interests in depreciation
and amortization 526,018 285,280 -
Share of joint venture depreciation
and amortization (688,686) (59,038) (39,626)
Earnings from property sales 9,824,122 450,902 -
Minority interests of exchangeable
partnership units (1,826,273) (2,041,823) -
---------------- ---------------- -----------------
Net income available for common
stockholders $ 50,590,074 27,401,655 9,907,145
================ ================ =================
As of December 31
Assets (in thousands): 1998 1997 1996
---------------------- ---- ---- ----
Retail segment $ 1,170,478 754,174 342,900
Service operations segment 20,870 20,173 1,695
Office buildings segment - 19,258 21,559
Cash and other assets 48,759 33,244 20,370
================ ================ =================
Total assets $ 1,240,107 826,849 386,524
================ ================ =================
F-15
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
4. Investments Inin Real Estate Partnerships
The Company accounts for all investments in which it owns less than 50%
and does not have controlling financial interest, using the equity
method. The Company has a 10% investment in Village
Commons Shopping Center and during 1996 acquired a 25% investment in
Ocean East Mall. The Company's combined investment in these two
partnerships was $999,730$30.6
million and $1,035,107$999,730 at December 31, 19971998 and 1996,1997, respectively. Net
income is allocated in accordance with each of the partnership
agreements.
4. Mortgage Loans5. Notes Payable and Acquisition and Development Line of Credit
The Company's outstanding debt at December 31, 1998 and 1997 consists of
the following (in thousands):
1998 1997
---- ----
Notes Payable:
Fixed rate mortgage loans $ 298,148 199,078
Variable rate mortgage loans 11,051 30,841
Fixed rate unsecured loans 121,296 -
------- -------
Total notes payable 430,495 229,919
Acquisition and development
line of credit 117,631 48,131
------- -------
Total $ 548,126 278,050
======= =======
The Company has an acquisition and development line of credit (the
"Line") which provides for a commitment up to $300 million, and
incorporates a competitive bid facility of up to $150 million of the
commitment amount. Maximum availability under the Line is based on the
discounted value of a pool of eligible unencumbered assets less the
amount of the Company's outstanding unsecured liabilities. The Line,
which is unsecured, matures in May 2000, but may be extended annually for
one year periods. Borrowings under the Line bear interest at a variable
rate based on LIBOR plus a specified spread, (.875% currently), which is
dependent on the Company's investment grade rating. The interest rate on
the Line was 6.56% at December 31, 1998. The Company's ratings are
currently Baa2 from Moody's Investor Service, BBB from Duff and Phelps,
and BBB- from Standard and Poors. The Company is required to comply, and
is in compliance, with certain financial covenants customary with this
type of unsecured financing. The Line is used primarily to finance the
acquisition and development of real estate, but is also available for
general working capital purposes.
On July 17, 1998 the Company through RCLP, completed a $100 million
offering of seven year term notes at an effective interest rate
of 7.17%. The Notes were priced at 162.5 basis points over the current
yield for seven year US Treasury Bonds. The notes are unsecured and
mature on July 15, 2005. The net proceeds of the offering were used to
repay borrowings under the Line.
Mortgage loans payableare secured by certain real estate rental propertyproperties, but
generally may be prepaid subject to a prepayment of a yield-maintenance
premium. Mortgage loans are as
follows:
1997 1996
---- ----
6.72%mortgage loan, held by a trust created for
the benefit of investors who purchased mortgage
pass-through certificates, non recourse to the
Company, interest only paid monthly, due in full
November 5, 2000 $ 51,000,000 51,000,000
7.04%to 7.97% mortgage notes, payable in monthly
installments of $206,108 including principal and
interest, maturing from December 15, 2000
to December 15, 2010 29,064,254 -
8.52% mortgage note, interest only, payable monthly
maturing December 15, 2001 24,750,000 -
7.60%to 8.01% mortgage notes payable in monthly principal
installments of $39,646 maturing from June 28, 2001
to August 17, 2002 22,005,752 22,465,410
7.92% to 8.95% mortgage notes, payable in monthly
installments of $117,628, including principal
and interest, maturing from October 1, 2005
to August 1, 2009 13,282,672 -
8.40%mortgage note, payable in monthly installments of
$102,646 including principal and interest, maturing
on June 1, 2017 12,916,746 -
7.84% mortgage note, payable in monthly
installments of $92,119 including principal
and interest, maturing on September 1, 2005 12,490,525 -
9.50% mortgage note, payable in monthly
installments of $78,633 including principal
and interest, maturing on March 1, 2002 8,713,253 8,823,403
9.80% mortgage note, payable in monthly
installments of $73,899, including principal
and interest, maturing on February 1, 1999 7,892,935 8,000,421
F-13generally due in monthly installments of
interest and principal and mature over various terms through 2018.
Variable interest rates on mortgage loans are currently based on LIBOR
plus a spread in a range of 125 basis points to 150 basis points. Fixed
interest rates on mortgage loans range from 7.04% to 9.8%.
F-16
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 19971998
5. Notes Payable and 1996
4. Mortgage Loans Payable (continued)
7.94% mortgage note, payable in monthly
installments of $52,214 including principal
and interest, maturing on December 21, 2002 6,612,868 -
9.75% mortgage note, payable in monthly
installments of $55,630 including principal
and interest, maturing on January 1, 1998 5,864,972 -
8.625% mortgage note, payable in monthly
installments of $23,225 including principal
and interest, maturing on June 1, 2003 2,295,238 -
7.90%to 8.10% mortgage notes, payable in monthly
installments of $21,595, including principal and
interest, maturing from April 1, 2012
to June 1, 2017 2,189,049 -
6.987% to 7.863% (Libor + 1.25%) mortgage notes,
interest only, payable monthly maturing
from November 30, 1998 to June 12, 2000 24,122,500 -
Construction notes payable, interest only
payable monthly at Libor + 1.5% and Prime +1/4% 4,682,835 1,518,331
maturing December, 2001
7.375% (Libor + 1.5%) mortgage note, payable in
monthly principal installments of $4,438,
maturing on August 1, 1998 2,035,643 -
8.28%mortgage note, payable in monthly installments
of $37,598 including principal and interest, paid in
full during 1997 - 3,801,821
8.72% mortgage note, rate adjusts annually,
payable in monthly installments of $23,105
including principal and interest, paid in
full during 1997 - 2,296,902
----------- ----------
Total mortgage loans payable $ 229,919,242 97,906,288
============ ==========
Principal maturities on the mortgage loans are as follows:
Year Amount
1998 27,168,334
1999 9,518,649
2000 64,633,229
2001 39,361,601
2002 26,759,455
Thereafter 62,477,974
------------
Total 229,919,242
As part of their borrowing arrangements, the Company is expected to
maintain escrow balances for the payment of real estate taxes on the
mortgaged properties, and in the case of the $51,000,000 mortgage loan,
also maintain interest, insurance and specified capital improvement
escrows. Escrow balances recorded as cash and cash equivalents were
$3,292,325 and $1,069,337 at December 31, 1997 and 1996, respectively.
F-14
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 1996
5. Acquisition and Development Line of Credit The Company has a $150 million unsecured revolving line of credit which
is used to finance real estate acquisitions and developments. The
interest rate is based upon LIBOR plus 1.5% with interest only for two
years, and if then terminated, becomes a two year term loan maturing in
May, 2000 with principal due in seven equal quarterly installments. The
borrower may request a one year extension of the interest only revolving
period annually in May of each year.
On February 24,(continued)
During 1998, the Company entered intoassumed mortgage loans with a commitment agreement
withfair value of
$132.8 million related to the various banks that provideacquisition of shopping centers, which
includes debt premiums of $12.4 million based upon the above market
interest rates of the debt instruments. Debt premiums are being amortized
over the terms of the related debt instruments.
As of December 31, 1998, scheduled principal repayments on notes payable
and the Line were as follows (in thousands):
Scheduled
Scheduled Principal Term Loan Total
Payments by Year Payments Maturities Payments
---------------- --------- ---------- --------
1999 $ 3,771 21,579 25,350
2000 3,996 174,674 178,670
2001 3,911 41,928 45,839
2002 3,098 44,117 47,215
2003 2,914 13,291 16,205
Beyond 5 Years 17,811 206,607 224,418
Net unamortized debt
payments - 10,429 10,429
------- ------- -------
Total $ 35,501 512,625 548,126
======= ======= =======
Unconsolidated partnerships and joint ventures had mortgage loans payable
of $76.7 million at December 31, 1998, and the Company's proportionate
share of these loans was $34.4 million.
The fair value of the Company's notes payable and Line are estimated
based on the current rates available to increase the unsecured
commitment amountCompany for debt of the same
remaining maturities. Variable rate notes payable, and the Company's
Line, are considered to $300 million, provide for a $150 million competitive
bid facility, and reducebe at fair value since the interest rates on such
instruments reprice based on current market conditions. Notes payable
with fixed rates, that have been assumed in connection with acquisitions,
are recorded in the accompanying financial statements at fair value. The
Company considers the carrying value of all other fixed rate notes
payable to be a reasonable estimation of their fair value based on the
line based upon
achieving an investment grade ratingfact that the rates of BBB- or higher. Once ratingssuch notes are achieved, the interest rate on the Line will be reducedsimilar to Libor plus
.95%, and further reduced ifrates available to the
Company receives ratings better thanfor debt of the minimum requirement from two agencies. During the 1st quarter of 1998,
the Company received investment grade ratings from Moody's of Baa2 and
S&P of BBB-.same terms.
6. Stockholders' Equity
On June 11, 1996, the Company entered into a Stockholders Agreement (the
"Agreement") with SC-USREALTY granting it certain rights such as
purchasing common stock, nominating representatives to the Company's
Board of Directors, and subjecting SC-USREALTY to certain restrictions
including voting and ownership restrictions. The Agreement primarily
granted SC-USREALTY (i) the right to acquire 7,499,400 shares for
approximately $132 million and also participation rights entitling it
to purchase additional equity in the Company, at the same price as that
offered to other purchasers, each time that the Company sells additional
shares of capital stock or options or other rights to acquire capital
stock, in order to preserve SC-USREALTY's pro rata ownership position;
and (ii) the right to nominate a
F-17
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
6. Stockholders' Equity (continued)
proportionate number of directors on the Company's Board, rounded down
to the nearest whole number, based upon SC-USREALTY's percentage
ownership of outstanding common stock (but not to exceed 49% of the
Board). As of December 31, 1997, SC-USREALTY has acquired all of the 7,499,400 shares
related to the Agreement. In connection with the Units and shares of
common stock issued in exchange for Branch's assets (see note 2, Acquisitions of Shopping Centers),assets. SC-USREALTY acquired
1,750,000 shares during August and December, 1997 at $22.125 per share in
accordance with their rights as provided for in the Agreement. In
connection with the Units and shares of common stock issued for Branch in
March 1998, SC-USREALTY acquired 435,777 shares at $22.125 per share in
accordance with their rights as provided for in the Agreement. The
acquisition of Branch is discussed further in note 2.
For a period of at least five years (subject to certain exceptions),
SC-USREALTY is precluded from, among other things, (i) acquiring more
than 45% of the outstanding common stock on a diluted basis, (ii)
transferring shares without the Company's approval in a negotiated
transaction that would result in any transferee beneficially owning more
than 9.8% of the Company's capital stock, or (iii) acting in concert with
any third parties as part of a 13D group. Subject to certain exceptions,
SC-USREALTY is required to vote its shares either as recommended by the
Board of Directors or proportionately in accordance with the vote of the
other shareholders.stockholders.
On July 11, 1997, the Company sold 2,415,000 shares to the public at
$27.25 per share. In connection with that offering, SC-USREALTY purchased
an additional 1,785,000 shares at $27.25 directly from the Company. On
August 11, 1997, the Underwriters exercised the over-allotment option and
the Company issued an additional 129,800 shares to the public and 95,939
shares to SC-USREALTY at $27.25 per share. Total proceeds from the sale
of common stock to the public and SC-USREALTY of approximately $117
million net of offering expenses was used to reduce the balance of the
Company's line of credit.Line.
In connection with the purchaseacquisition of a shopping center on February 28,
1996, the Companycenters, RCLP has issued
28,848Exchangeable Operating Partnership Operating Units to a limited partnerpartners convertible
on a one for one basis into shares of common stock after the first anniversary of the Company. There
are currently 1,361,396 Exchangeable Operating Partnership Units
outstanding.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred
Units") to an institutional investor in a private placement. The
issuance date.
F-15involved the sale of 1.6 million Series A Preferred Units
for $50.00 per unit. The Series A Preferred Units, which may be called by
the Partnership at par on or after June 25, 2003, have no stated maturity
or mandatory redemption, and pay a cumulative, quarterly dividend at an
annualized rate of 8.125%. At any time after June 25, 2008, the Series A
Preferred Units may be exchanged for shares of 8.125% Series A Cumulative
Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series A Preferred Stock for one Series A Preferred Unit. The
Series A Preferred Units and Series A Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were
used to reduce the acquisition and development line of credit.
F-18
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
7. Earnings Per Share
The following summarizes the calculation of basic and diluted earnings
per share for the years ended, December 31, 1998, 1997 and 1996
6. Stockholders' Equity (continued)
The Company completed a $50,000,000 private placement by issuing
2,500,000 shares of non-voting Class B common stock to a single investor
on December 20, 1995 (the "Private Placement"). The proceeds from the
Private Placement were used to acquire five shopping centers. The Company
initially issued $18,250,000 of
Series B preferred stock on October 26, 1995 to fund the acquisition of a
shopping center. These shares were subsequently converted into Class B
common stock. The Class B common stock is convertible into 2,975,468
shares of common stock beginning on the third anniversary of the issuance
date, subject to certain limitations defined in the agreement. The
dividend on each share of Class B common is payable when and if declared
by the Board of Directors pari passu with any dividend on the common
stock of the Company.
7. Earnings Per Share
The following summarizes the calculation of basic and diluted earnings
per share for the years ended, December 31, 1997, 1996, and 1995 (in
thousands except per share data):
Basic Earnings Per Share (EPS) Calculation:1998 1997 1996 1995
-------------------------------------------
---- ---- ----
Basic Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding 25,150 17,424 7,331
6,630======= ======= ====== =====
Net income for common stockholders $ 50,590 27,402 9,907
4,994stockholders
Less: dividends paid on Class B common stock
5,378 5,140 3,879
-------- ------- ------ -----
Net income for Basic EPS 45,212 22,262 6,028
4,994
======= ===== ============ ======
Basic EPS $ 1.80 1.28 0.82 0.75.82
======= ===== ============ ======
Diluted Earnings Per Share (EPS)
Calculation:
Weighted average shares outstanding
for Basic EPS 25,150 17,424 7,331
6,630
RedeemableExchangeable operating partnership units 1,223 1,243 18 -
Incremental shares to be issued under common
stock options using the Treasury method 14 80 3 -
Contingent units or shares for the acquisition
of real estate 511 955 -
-
------- ----- ------------ ------
Total diluted shares 26,898 19,702 7,352
6,630
======= ===== ============ ======
Net income for Basic EPS $ 45,212 22,262 6,028 4,994
Add: minority interest of redeemableexchangeable
partnership units 1,826 2,042 -
-
------- ----- ------------ ------
Net income for Diluted EPS 47,038 24,304 46,028 4,9946,028
======= ======= ======
=====
Diluted EPS $ 1.75 1.23 0.82 0.75
$.82
======= ======= ====== =====
Class B common stock is not included in the above calculation because
it is anti-dilutive.
F-16
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 1996
8. Long-termLong-Term Stock Incentive Plans
In 1993, the Company adopted a Long TermLong-Term Omnibus Plan (the "Plan")
pursuant to which the Board of Directors may grant stock and stock
options to officers, directors and other key employees. The Plan provides
for the issuance of up to 12% of the Company's common shares outstanding
not to exceed 33.0 million shares of authorized but unissued common stock.shares. Stock options are granted with an
exercise price equal to the stock's fair market value at the date of
grant. All stock options granted have ten year terms, and with respect to
F-19
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
officers and other key employees, become fully exercisable after fivefour
years from the date of grant, and with respect to directors, become
fully exercisable after one year.
At December 31, 1997,1998, there were approximately 1.3 million300,000 shares available
for grant under the Plan. The per share weighted-average fair value of
stock options granted during 1998 and 1997 was $2.22 and 1996 was $3.26 and $3.04 on the
date of grant using the Black Scholes option-pricing model with the
following weighted-average assumptions: 1998 - expected dividend yield
7.5%, risk-free interest rate of 4.8%, expected volatility 21%, and an
expected life of 6.5 years; 1997 - expected dividend yield 6.3%,
risk-free interest rate of 6.3%, expected volatility 21%, and an expected
life of 5.7 years; 1996 - expected dividend yield 6.6%,
risk-free interest rate of 5.9%, expected volatility 21%, and an expected
life of five years. The Company applies APB Opinion No. 25 in accounting
for its Plan and, accordingly, no compensation cost has been recognized
foritsfor its stock options in the consolidated financial statements.
Had the Company determined compensation cost based on the fair value at
the grant date for its stock options under SFAS No. 123, the Company's
net income for common stockholders would have been reduced to the pro
forma amounts indicated below (in thousands except per share data):
Net income for
common stockholders 1997 1996 1995
------------------- ---- ---- ----
As reported $27,402 9,907 4,994Net income for
Common stockholders 1998 1997 1996
------------------- ---- ---- ----
As reported: $50,590 $27,402 $9,907
Net income per share:
Basic $ 1.80 $ 1.28 $ 0.82
Diluted $ 1.75 $ 1.23 $ 0.82
Pro forma: $49,565 $25,777 $9,897
Net income per share:
Basic $ 1.76 $ 1.18 $ 0.82
Diluted $ 1.71 $ 1.15 $ 0.82 0.75
Diluted 1.23 0.82 0.75
Pro forma 25,777 9,897 4,994(*)
Net income per share:
Basic 1.18 0.82 0.75
Diluted 1.15 0.82 0.75
-------------------
* The options granted during 1995 were issued on December 31,
1995 and accordingly had no effect to income.
Pro forma net income for common stockholders reflects only
options granted subsequent to the issuance of SFAS 123 in 1997, 1996 and
1995. Therefore, the full impact of calculating compensation
cost for stock options under SFAS No. 123 is not reflected in
the pro forma net income for common stockholders amounts
presented above because compensation cost is reflected over
the options' vesting period and compensation cost for options
granted prior to January 1, 1995 is not considered.
F-17
F-20
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 19961998
8. Long-termLong-Term Stock Incentive Plans (continued)
Stock option activity during the periods indicated is as follows:
Number of Weighted-Average
Shares Exercise Price
Outstanding, December 31, 1994 191,000 $19.16
Granted 6,000 17.25
Forfeited (11,000) 19.25
----------
Outstanding, December 31, 1995 186,000 19.09
Granted 12,000 24.67
----------
Outstanding, December 31, 1996 198,000 19.43
----------
Granted 1,252,276 25.39
Forfeited (7,000) 23.54
Exercised (124,769) 19.25
----------
Outstanding, December 31, 1997 1,318,507 $25.08Weighted
Average
Number of Exercise
Shares Price
--------- --------
Outstanding, December 31, 1995 186,000 $ 19.09
Granted 12,000 24.67
---------
Outstanding, December 31, 1996 198,000 19.43
---------
Granted 1,252,276 25.39
Forfeited (7,000) 23.54
Exercised (124,769) 19.25
---------
Outstanding, December 31, 1997 1,318,507 25.08
---------
Granted 741,265 24.39
Forfeited (123,495) 25.33
Exercised (227,700) 24.97
---------
Outstanding, December 31, 1998 1,708,577 $ 24.71
=========
The following table presents information regarding all options outstanding at
December 31, 1997.
Weighted
Average Weighted
Number of Remaining Range of Average
Options Contractual Exercise Exercise
Outstanding Life Prices Price
61,231 6.1 years $ 16.75 - 19.25 $ 18.77
1,155,800 9.0 years 25.25 25.25
101,476 6.8 years 26.25 - 27.75 26.99
------------ --------- ------------------ -------------
1,318,507 8.7 years $ 16.75 - 27.75 $ 25.08
=========== =========== ================== =============
1998.
Weighted
Average Weighted
Number of Remaining Range of Average
Options Contractual Exercise Exercise
Outstanding Life Prices Price
----------- ----------- -------- --------
51,731 5.0 years $ 16.75 - 19.25 $ 18.93
1,231,578 8.6 years 22.25 - 25.25 24.26
425,268 8.4 years 26.19 - 27.75 26.69
----------- --------- ----------------- ------------
1,708,577 8.5 years $ 16.75 - 27.75 $ 24.71
=========== ========= ================= ============
F-21
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
The following table presents information regarding options currently
exercisable at December 31, 1997.
Weighted
Number of Range of Average
Options Exercise Exercise
Exercisable Prices Price
61,231 $ 16.75 - 19.25 $ 18.77
240,500 25.25 - 26.25 25.27
76,476 26.88 26.88
--------- ---------------- --------
378,207 $ 16.75 - 26.88 $ 24.54
========= ================1998:
Weighted
Number of Range of Average
Options Exercise Exercise
Exercisable Prices Price
----------- -------- ---------
51,731 $ 16.75 - 19.25 $ 18.93
98,300 25.25 25.25
88,881 26.25 - 27.75 26.99
------ ------------- --------
238,912 $ 16.75 - 27.75 $ 24.53
======= ================== ========
F-18
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 1996
Also as part of the Plan, in 1993, 1996 and 1996,1998, certain officers and
employees purchased common stock at fair market value directly from the
Company, of which 90%, 95% and 95%, respectively, was financed by a stock
purchase loan provided by the Plan. These recourse loans are fully
secured by stock, bear interest at fixed rates of 7.34%6% to 7.79% and mature
after ten years. The Board of Directors may authorize the forgiveness of
all or a portion of the principal balance based on the Company's
achievement of specified financial objectives, and total stockholder
return performance targets. During 1998, 1997, and 1996, $662,196,
$601,516, and 1995, $601,516, $646,598 and
$379,418 was forgiven, respectively, and is included as a
charge to income on the consolidated statements of operations. The
Company also has a performance based restricted stock plan for officers
whereby a portion of the shares authorized under the Plan may be granted
upon the achievement of certain total stockholder return performance
targets. Shares granted under the plan become fully vested by January 1,
2000. During 1998, 1997 and 1996, the Company charged $250,000, $259,600
and $809,400 to income on the consolidated statement of operations
related to the restricted stock plan. In addition, the Company provided
it's officers, directors and employees with other stock based
compensation totaling $1.5, $1.7, and $1.5 million during 1998, 1997 and
1996, respectively.
9. Operating Leases
The Company's properties are leased to tenants under operating leases
with expiration dates extending to the year 2041.2028. Future minimum rent
under noncancelable operating leases as of December 31,1997,31,1998, excluding
tenant reimbursements of operating expenses and excluding additional
contingent rentals based on tenants' sales volume are as follows:
Year ending December 31, Amount
1999 110,538,266
2000 105,061,943
2001 89,224,053
2002 74,990,466
2003 64,644,898
Thereafter 481,164,703
------------
Total $ 925,624,329
============
F-22
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
$ 82,113,717
1999 73,918,555
2000 65,821,489
2001 53,281,014
2002 45,529,249
Thereafter 306,007,382
-----------
Total $626,671,4069. Operating Leases (continued)
At December 31, 1997,1998, the real estate portfolio as a whole was
approximately 92.8%93% leased.
The shopping centers' tenant base includes primarily national and
regional supermarkets, drug stores, discount department stores and other
retailers and, consequently, the credit risk is concentrated in the
retail industry. There were no tenants which individually represented 10%
or more of the Company's combined minimum rent. The combined annualized
rent from the Company's four largest retail tenants represented
approximately 20%26.9% of annualized minimumbase rent at December 31, 1997.1998.
10. Related Party Transactions
The Company provides management, leasing, and brokerage services for
certain commercial real estate properties of The Regency Group, Inc. and
its affiliates ("TRG"), a corporation wholly-owned by certain officers
and stockholders of the Company. Fees for such services are charged to
TRG based on current market rates. From time to time, certain personnel
of the Company may provide administrative services to TRG, pursuant to an
agreement. The cost of such services are reimbursed by TRG based on
percentage allocations of management time and general overhead made in
compliance with applicable regulations of the Internal Revenue Service.
11. Contingencies
The Company like others in the commercial real estate industry, is
subject to numerous environmental laws and regulations and the operation
of dry cleaning plants at the Company's shopping centers is the principal
environmental concern. The Company believes that the dry cleaners are
operating in accordance with current laws and regulations and has
established procedures to monitor their operations. While the Company has
registered the plants located in Florida under a state funded program
designed to substantially fund the clean up, if necessary, of any
environmental issues, the owner or operator is not relieved from the
ultimate responsibility for clean up. The Company also has established
F-19
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 1996
due diligence procedures to identify and evaluate potential environmental
issues on properties under consideration for acquisition. In connection
with acquisitions during 19971998 and 1996,1997, the Company has established
environmental reserves of $1,944,633which amounted to $2.2 million and $600,000,$1.9 million at
December 31, 1998 and 1997, respectively. While it is not possible to
predict with certainty, management believes that the reserves are
adequate to cover future clean-up costs related to these sites. The
Company's policy is to accrue environmental clean-up costs when it is
probable that a liability has been incurred and that amount is reasonably
estimable. Based on information presently available, no additional
environmental accruals were made and management believes that the
ultimate disposition of currently known matters will not have a material
effect on the financial position, liquidity, or operations of the
Company.
12. Subsequent Event
On March 11, 1998, the Company acquired the real estate assets of
entities comprising the Midland Group ("Midland") consisting of 21
shopping centers (the "Midland Properties") plus a development pipeline
of 11 shopping centers. Of the 21 centers acquired, 20 are anchored by
Kroger and King Soopers, a Kroger subsidiary. Eight of the shopping
centers included in the development pipeline will be owned through a
joint venture in which the Company will own less than a 50% interest upon
completion of construction.
At closing and during 1998, the Company will pay approximately $230.4
million for the 21 properties and pay transaction costs through the
issuance of units of RRLP interest valued at $26.58 per unit or cash to
$47 million, the assumption of $92.5 million of debt, and $90.9 million
to pay off existing secured real estate loans. The Company will incur
additional costs to establish reserves, pay severance, and prepay
existing assumed loans. Subsequent to 1998, the Company expects to pay
approximately $12.7 million to acquire equity interests in the
development pipeline as the properties reach stabilization. The Company
may also be required to make payments aggregating $10.5 million through
the year 2000 contingent upon increases in net income from existing
properties, the development pipeline, and new properties developed or
acquired in accordance with the contribution agreement.
13.11. Market and Dividend Information (Unaudited)
The Company tradesCompany's common stock is traded on the New York Stock Exchange
("NYSE") under the symbol "REG". The Company currently has approximately
3,500 shareholders. The following table sets forth the high and low
prices and the cash dividends declared on the Company's common stock by
quarter for 19971998 and 1996.1997. All amounts are in thousands except per share
data.
1998 1997
1996
----------------------------------- ------------------------------------------------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
----- ----- --------- ----- ----- --------
March 31 $ 27.812 24.750 .44 28.000 25.000 .42
17.500 15.875 .405
June 30 26.687 24.062 .44 28.125 24.875 .42
21.125 16.500 .405
September 30 26.500 20.500 .44 28.250 24.875 .42
22.375 19.250 .405
December 31 23.437 20.250 .44 28.000 24.250 .42 26.250 21.125 .405
F-20
F-23
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1997 and 1996
14.1998
12. Summary of Quarterly Financial Data (Unaudited)
Presented below is a summary of the consolidated quarterly financial data
for the years ended December 31, 1997 and 1996.
Presented below is a summary of the consolidated quarterly financial data
for the years ended December 31, 1998 and 1997 (amounts in thousands,
except per share data):
First Second Third Fourth
Quarter Quarter Quarter Quarter
(amounts in thousands, except per share data)------- ------- ------- -------
1998:
Revenues $ 30,909 35,187 37,199 40,001
Net income for
common stockholders 19,556 10,798 10,061 10,175
Net income per share:
Basic .74 .38 .34 .35
Diluted .72 .36 .34 .34
1997:
Revenues $ 17,733 24,626 26,790 28,638
Net income for common stockholders 4,037 4,727 8,743 9,895
Net income per share:
Basic .25 .26 .34 .37
Diluted .25 .26 .32 .35
1996:
Revenues $ 10,501 10,952 12,030 13,46428,187
Net income for
common stockholders 2,576 2,597 3,025 1,7094,037 4,727 8,743 9,895
Net income per share:
Basic .24 .24.25 .26 .09.34 .37
Diluted .24 .24.25 .26 .09.32 .35
F-2113. Subsequent Event
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held
real estate investment trust. The Agreement, among other matters,
provides for the merger of Pacific into Regency, and the exchange of each
Pacific common or preferred share into 0.48 shares of Regency common or
preferred stock. The stockholders approved the merger at a Special
Meeting of Stockholders held February 26, 1999. At the time of the
merger, Pacific owned 71 retail shopping centers that are operating or
under construction containing 8.4 million SF of gross leaseable area. On
February 28, 1999, the effective date of the merger, the Company issued
equity instruments valued at $770.6 million to the Pacific stockholders
in exchange for their outstanding common and preferred shares, and units.
The total cost to acquire Pacific is $1.157 billion based on the value of
Regency shares issued, including the assumption of $379 million of
outstanding debt and other liabilities of Pacific, and estimated closing
costs of $7.5 million. The price per share used to determine the purchase
price is $23.325 based on the five day average of the closing stock price
of Regency's common stock as listed on the New York Stock Exchange
immediately before, during and after the date the terms of the merger
were agreed to and announced to the public. The merger will be accounted
for as a purchase with the Company as the acquiring entity.
On February 26, 1999, the Company entered into an agreement with
the various banks that provide the Line to increase the unsecured
commitment amount to $635 million.
S-1
Independent Auditors' Report
On Financial Statement Schedule
The Shareholders and Board of Directors
Regency Realty Corporation
Under date of February 3, 1998,1, 1999, except for Note 1213 as to which the date is March
1, 1998,1999, we reported on the consolidated balance sheets of Regency Realty
Corporation as of December 31, 19971998 and 1996,1997, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1997,1998, as contained in the
annual report on Form 10-K for the year 1997.1998. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedule as listed in the accompanying index on page
F-1 of the annual report on Form 10-K for the year 1997.1998. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits.
In our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Jacksonville, Florida
February 3, 1998
S-11, 1999
S-2
Schedule III
REGENCY REALTY CORPORATION Schedule III
Combined Real Estate and Accumulated Depreciation
December 31, 19971998
Initial Cost Total Cost
--------------------------------------------------- Cost Capitalized ----------------------------------------------------------------------------
Building & Subsequent to Building &
Land Improvements AcquistionAcquisition Land Improvements Total
--------------- ------------ ---------------- ---------- ------------------ ------------ -----
Anastasia Shopping PlazaANASTASIA SHOPPING PLAZA 1,072,451 3,617,493 112,404159,607 1,072,451 3,729,897 4,802,348
Ashford Place3,777,100 4,849,551
ASHFORD PLACE 2,803,998 9,943,994 79,313 2,803,998 10,023,307 12,827,305
Aventura(761,970) 2,583,998 9,402,024 11,986,022
AVENTURA SHOPPING CENTER 2,751,094 9,317,790 117,291157,829 2,751,094 9,435,081 12,186,175
Berkshire Commons9,475,619 12,226,713
BECKETT COMMONS 1,625,242 5,844,871 - 1,625,242 5,844,871 7,470,113
BENEVA 2,483,547 8,851,199 - 2,483,547 8,851,199 11,334,746
BENT TREE PLAZA 1,927,712 6,659,082 - 1,927,712 6,659,082 8,586,794
BERKSHIRE COMMONS 2,294,960 8,151,236 36,13176,079 2,294,960 8,187,367 10,482,327
Bolton Plaza8,227,315 10,522,275
BLOOMINGDALE 3,861,759 14,100,891 - 3,861,759 14,100,891 17,962,650
BOLTON PLAZA 2,660,227 6,209,110 1,168,755 2,634,663 7,403,429 10,038,092
Bonner's Point1,219,398 2,634,664 7,454,071 10,088,735
BONNERS POINT 859,854 2,878,641 129,319166,034 859,854 3,007,960 3,867,814
Boynton Lakes3,044,675 3,904,529
BOYNTON LAKES PLAZA 2,783,000 10,043,027 -37,669 2,783,000 10,043,027 12,826,027
Braelin Village10,080,696 12,863,696
BRAELINN VILLAGE EQUIPORT 4,191,214 12,389,585 29,000876,936 4,191,214 12,418,585 16,609,799
Briarcliff LaVista13,266,521 17,457,735
BRIARCLIFF LA VISTA 694,120 2,462,819 - 694,120 2,462,819 3,156,939
Briarcliff VillageBRIARCLIFF VILLAGE 4,597,018 16,303,813 334,677 4,597,018 16,638,490 21,235,508
BROOKVILLE PLAZA 1,208,012 4,205,994 - 4,597,018 16,303,813 20,900,831
Buckhead Court1,208,012 4,205,994 5,414,006
BUCKHEAD COURT 1,737,569 6,162,941 101,703 1,737,569 6,264,644 8,002,213
Cambridge Square1,229,361 1,627,569 7,502,302 9,129,871
CAMBRIDGE SQUARE 792,000 2,916,034 9,50359,747 792,000 2,925,537 3,717,537
Carmel Commons2,975,781 3,767,781
CARMEL COMMONS 2,466,200 8,903,187 394,4501,526,996 2,466,200 9,297,637 11,763,837
Carriage Gate10,430,183 12,896,383
CARRIAGE GATE 740,960 2,494,750 973,9381,101,049 740,960 3,468,688 4,209,648
Chasewood Plaza3,595,799 4,336,759
CENTER OF SEVEN SPRINGS 1,737,994 6,290,048 1,452,432 1,757,440 7,723,034 9,480,474
CHASEWOOD PLAZA 1,675,000 11,390,727 4,316,7934,500,773 2,476,486 14,906,034 17,382,520
City View15,090,014 17,566,500
CHERRY GROVE 3,533,146 12,710,297 - 3,533,146 12,710,297 16,243,443
CITY VIEW SHOPPING CENTER 1,207,204 4,341,304 23,53446,444 1,207,204 4,364,838 5,572,042
Columbia Marketplace4,387,748 5,594,952
COLUMBIA MARKETPLACE 1,280,158 4,285,745 147,651177,291 1,280,158 4,433,396 5,713,554
Country Club4,463,036 5,743,194
COUNTRY CLUB 1,105,201 3,709,452 71,05887,739 1,105,201 3,780,510 4,885,711
Courtyard3,797,191 4,902,392
COURTYARD SHOPPING CENTER 1,761,567 4,187,039 194,673263,527 1,761,567 4,381,712 6,143,279
Cromwell Square4,450,566 6,212,133
CROMWELL SQUARE 1,771,892 6,285,288 -27,249 1,771,892 6,285,288 8,057,180
Cumming6,312,537 8,084,429
CUMMING 400 2,374,562 8,420,776 1,506134,871 2,374,562 8,422,282 10,796,844
Dunwoody Hall8,555,647 10,930,209
DELK SPECTRUM 2,984,577 11,048,896 - 2,984,577 11,048,896 14,033,473
DUNWOODY HALL 1,819,209 6,450,922 13,824329,740 1,819,209 6,464,746 8,283,955
Dunwoody Village6,780,662 8,599,871
DUNWOODY VILLAGE 2,326,063 7,216,045 107,4042,064,462 2,326,063 7,323,449 9,649,512
East Port Plaza9,280,507 11,606,570
EAST POINTE 1,868,120 6,742,983 - 1,868,120 6,742,983 8,611,103
EAST PORT PLAZA 3,257,023 11,611,363 98,247164,282 3,257,023 11,709,610 14,966,633
Ensley Square11,775,645 15,032,668
ENSLEY SQUARE 915,493 3,120,928 410,219 915,493 3,531,147 4,446,640
EVANS CROSSING 1,468,743 5,123,617 - 915,493 3,120,928 4,036,421
Garden Square1,468,743 5,123,617 6,592,360
FLEMING ISLAND 3,076,701 6,291,505 - 3,076,701 6,291,505 9,368,206
FRANKLIN SQUARE 2,584,025 9,379,749 - 2,584,025 9,379,749 11,963,774
GARDEN SQUARE 2,073,500 7,614,748 5,250 2,073,500 7,619,998 9,693,498
Glenwood Village361,367 2,136,135 7,913,480 10,049,615
GARNER FESTIVAL 5,591,099 19,897,197 - 5,591,099 19,897,197 25,488,296
GLENWOOD VILLAGE 1,194,198 4,235,476 48,93081,175 1,194,198 4,284,406 5,478,604
Harpeth Village4,316,651 5,510,849
HAMILTON MEADOWS 2,034,566 6,582,429 - 2,034,566 6,582,429 8,616,995
HARPETH VILLAGE FIELDSTONE 2,283,874 5,559,498 3,537,926 2,283,874 9,097,424 11,381,298
HIGHLAND SQUARE 2,615,250 9,359,722 - 2,283,874 5,559,498 7,843,372
Hyde Park Plaza2,615,250 9,359,722 11,974,972
HINSDALE LAKE COMMONS 4,217,840 15,039,854 - 4,217,840 15,039,854 19,257,694
HYDE PARK 9,240,000 33,340,181 2,650 9,240,000 33,342,831 42,582,831
Kingsdale2,625,631 9,735,102 35,470,710 45,205,812
KERNERSVILLE PLAZA 1,741,562 6,081,020 - 1,741,562 6,081,020 7,822,582
KINGSDALE SHOPPING CENTER 3,866,500 14,019,614 -153,027 3,866,500 14,019,614 17,886,114
LaGrange Marketplace14,172,641 18,039,141
LAGRANGE MARKETPLACE 983,923 3,294,003 92,93698,595 983,923 3,386,939 4,370,862
Loehmann's Plaza3,392,598 4,376,521
LAKE PINE PLAZA 2,008,110 6,908,986 - 2,008,110 6,908,986 8,917,096
LAKESHORE 1,617,940 5,371,499 - 1,617,940 5,371,499 6,989,439
LOEHMANNS PLAZA 3,981,525 14,117,891 -11,371 3,981,525 14,117,891 18,099,416
Lovejoy Station14,129,262 18,110,787
LOVEJOY STATION 1,540,000 5,581,468 1,654 1,540,000 5,583,122 7,123,122
Lucedale MarketplaceLUCEDALE MARKETPLACE 641,565 2,147,848 54,53564,089 641,565 2,202,383 2,843,948
Mainstreet Square2,211,937 2,853,502
MAINSTREET SQUARE 1,274,027 4,491,897 9,66634,392 1,274,027 4,501,563 5,775,590
Mariner's Village4,526,289 5,800,316
MARINERS VILLAGE 1,628,000 5,907,835 106,970134,497 1,628,000 6,014,805 7,642,805
Marketplace - Alexander City 1,211,605 4,056,242 2,827,753 1,758,433 6,337,167 8,095,600
Marketplace - Murphreesburo6,042,332 7,670,332
MARKETPLACE ST PETE 1,287,000 4,662,740 223,490 1,287,000 4,886,230 6,173,230
MARKETPLACE CENTER OLD FORT 2,432,942 1,755,643 1,813,070 2,432,942 3,568,713 6,001,655
Market Place - St. Petersburg 1,287,000 4,662,740 145,115 1,287,000 4,807,855 6,094,855
Martin Downs ShoppesMARTIN DOWNS VILLAGE CENTER 2,000,000 5,133,495 2,981,179 2,437,664 7,677,010 10,114,674
MARTIN DOWNS VILLAGE SHOPPES 700,000 1,207,861 865,494879,527 817,135 1,956,220 2,773,355
Martin Downs Village Center 2,000,000 5,133,495 2,419,646 2,437,664 7,115,477 9,553,141
Memorial Bend1,970,253 2,787,388
MAXTOWN ROAD (NORTHGATE) 1,753,136 6,244,449 - 1,753,136 6,244,449 7,997,585
MAYNARD CROSSING 4,066,381 14,083,800 - 4,066,381 14,083,800 18,150,181
MEMORIAL BEND SHOPPING CENTER 3,256,181 11,546,660 - 3,256,181 11,546,660 14,802,841
Merchants Village1,481,282 3,366,181 12,917,942 16,284,123
MERCHANTS VILLAGE 1,054,306 3,162,919 -3,185,485 1,054,306 3,162,919 4,217,225
Millhopper6,348,404 7,402,710
MILLHOPPER 1,073,390 3,593,523 142,278928,847 1,073,390 3,735,801 4,809,191
(*) The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
S-2
4,522,370 5,595,760
NEWBERRY SQUARE 2,341,460 8,466,651 784,841 2,341,460 9,251,492 11,592,952
NORTH MIAMI SHOPPING CENTER 603,750 2,021,250 85,433 603,750 2,106,683 2,710,433
OAKLEY PLAZA 1,772,540 6,406,975 65,103 1,772,540 6,472,078 8,244,618
OCEAN BREEZE 1,250,000 3,341,199 2,424,031 1,527,400 5,487,830 7,015,230
OLD ST AUGUSTINE PLAZA 2,047,151 7,355,162 233,330 2,047,151 7,588,492 9,635,643
ORCHARD SQUARE 1,155,000 4,135,353 252,060 1,155,000 4,387,413 5,542,413
PACES FERRY PLAZA 2,811,522 9,967,557 1,627,529 2,811,622 11,594,986 14,406,608
PALM HARBOUR SHOPPING VILLAGE 2,899,928 10,998,230 1,058,599 2,899,928 12,056,829 14,956,757
PALM TRAILS PLAZA 2,438,996 5,818,523 - 2,438,996 5,818,523 8,257,519
PARAGON BRANDON JV 570,000 2,472,537 (3,042,537) - - -
PARK PLACE 2,231,745 7,974,362 - 2,231,745 7,974,362 10,206,107
PARKWAY STATION 1,123,200 4,283,917 142,744 1,123,200 4,426,661 5,549,861
PEACHLAND PROMENADE 1,284,562 5,143,564 61,087 1,284,561 5,204,652 6,489,213
PEARTREE VILLAGE 5,196,653 8,732,711 10,122,933 5,196,653 18,855,644 24,052,297
PIKE CREEK 5,077,406 18,860,183 - 5,077,406 18,860,183 23,937,589
PINE TREE PLAZA 539,000 1,995,927 (84,927) 539,000 1,911,000 2,450,000
POWERS FERRY SQUARE 3,607,647 12,790,749 3,253,948 3,607,647 16,044,697 19,652,344
POWERS FERRY 1,190,822 4,223,606 19,564 1,190,822 4,243,170 5,433,992
QUADRANT AT SOUTHPOINT I 2,342,823 15,541,967 (17,884,790) - - -
QUEENSBOROUGH 1,826,000 6,501,056 - 1,826,000 6,501,056 8,327,056
REGENCY COURT 3,571,337 12,664,014 285,562 3,571,337 12,949,576 16,520,913
REGENCY SQUARE BRANDON 577,975 18,156,719 7,542,763 4,491,461 21,785,996 26,277,457
RIVERMONT STATION 2,887,213 10,445,109 79,795 2,887,213 10,524,904 13,412,117
ROSWELL VILLAGE 2,304,345 6,777,200 181,066 2,304,345 6,958,266 9,262,611
RUSSELL RIDGE 2,153,214 - 6,565,264 2,215,341 6,503,137 8,718,478
SANDY PLAINS VILLAGE 2,906,640 10,412,440 433,698 2,906,640 10,846,138 13,752,778
SANDY SPRINGS VILLAGE 733,126 2,565,411 168,915 733,126 2,734,326 3,467,452
SHOPPES @ 104 2,651,000 9,523,429 - 2,651,000 9,523,429 12,174,429
SHOPPES AT MASON 1,576,656 5,357,855 - 1,576,656 5,357,855 6,934,511
SILVERLAKE 2,004,860 7,161,869 - 2,004,860 7,161,869 9,166,729
SOUTH MONROE 1,200,000 6,566,974 - 1,200,000 6,566,974 7,766,974
SOUTH POINTE CROSSING - 13,000 - - 13,000 13,000
ST ANN SQUARE 1,541,883 5,597,282 - 1,541,883 5,597,282 7,139,165
STATLER SQUARE 2,227,819 7,479,952 - 2,227,819 7,479,952 9,707,771
TAMIAMI TRAILS 2,046,286 7,462,646 108,330 2,046,286 7,570,976 9,617,262
TEQUESTA SHOPPES 1,782,000 6,426,042 235,213 1,782,000 6,661,255 8,443,255
TERRACE WALK 1,196,286 2,935,683 105,916 1,196,286 3,041,599 4,237,885
THE MARKETPLACE 1,211,605 4,056,242 2,840,716 1,758,434 6,350,129 8,108,563
TOWN CENTER AT MARTIN DOWNS 1,364,000 4,985,410 17,547 1,364,000 5,002,957 6,366,957
TOWN SQUARE 438,302 1,555,481 1,501,322 768,302 2,726,803 3,495,105
TROWBRIDGE CROSSING EQUIPORT 910,263 1,914,551 1,050,010 910,263 2,964,561 3,874,824
UNION SQUARE SHOPPING CENTER 1,578,654 5,933,889 386,260 1,578,656 6,320,147 7,898,803
UNIVERSITY COLLECTION 2,530,000 8,971,597 108,317 2,530,000 9,079,914 11,609,914
UNIVERSITY MARKETPLACE 3,250,562 7,044,579 2,409,463 3,532,046 9,172,558 12,704,604
VILLAGE CENTER 6 3,885,444 10,799,316 337,899 3,885,444 11,137,215 15,022,659
VILLAGE IN TRUSSVILLE 973,954 3,260,627 109,895 973,954 3,370,522 4,344,476
WELLEBY 1,496,000 5,371,636 346,882 1,496,000 5,718,518 7,214,518
WELLINGTON MARKET PLACE 5,070,384 13,308,972 319,657 5,070,384 13,628,629 18,699,013
WELLINGTON TOWN SQUARE 1,914,000 7,197,934 609,258 1,914,000 7,807,192 9,721,192
WEST COUNTY 1,491,462 4,993,155 126,744 1,491,462 5,119,899 6,611,361
WESTCHESTER PLAZA 1,857,048 6,456,178 - 1,857,048 6,456,178 8,313,226
WESTLAND I 198,344 1,747,391 (1,945,735) - - -
WINDMILLER PLAZA PHASE I 2,620,355 11,190,526 - 2,620,355 11,190,526 13,810,881
WOODCROFT SHOPPING CENTER 1,419,000 5,211,981 384,592 1,419,000 5,596,573 7,015,573
WORTHINGTON PARK CENTRE 3,346,203 10,053,858 - 3,346,203 10,053,858 13,400,061
--------------------------------------------------------------------------------------------
253,680,855 871,635,824 57,867,342 257,669,018 925,514,995 1,183,184,013
============================================================================================
Schedule III
-continued-
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
-------------------------- ------------ ---------
Anastasia Shopping Plaza 454,375 4,347,973ANASTASIA SHOPPING PLAZA 575,105 4,274,446 -
Ashford Place 270,924 12,556,381 4,737,136
Aventura 1,635,974 10,550,201 8,713,253
Berkshire Commons 833,858 9,648,469 7,892,935
Bolton Plaza 703,549 9,334,543ASHFORD PLACE 580,642 11,405,380 4,651,887
AVENTURA SHOPPING CENTER 2,111,008 10,115,705 8,602,768
BECKETT COMMONS 128,560 7,341,553 -
Bonner's Point 427,867 3,439,947BENEVA - 11,334,746 -
BENT TREE PLAZA 148,955 8,437,839 5,615,296
BERKSHIRE COMMONS 1,062,021 9,460,254 7,784,755
BLOOMINGDALE 300,874 17,661,776 -
BOLTON PLAZA 928,470 9,160,265 -
BONNERS POINT 535,045 3,369,484 1,613,000
Boynton LakesBOYNTON LAKES PLAZA 251,445 12,612,251 -
12,826,027BRAELINN VILLAGE EQUIPORT 729,122 16,728,613 12,356,039
BRIARCLIFF LA VISTA 139,030 3,017,909 1,649,897
BRIARCLIFF VILLAGE 968,021 20,267,487 13,282,120
BROOKVILLE PLAZA 103,342 5,310,664 3,668,969
BUCKHEAD COURT 389,391 8,740,480 -
Braelin Village 303,120 16,306,679 12,490,525
Briarcliff LaVista 59,584 3,097,355 1,667,855
Briarcliff Village 438,272 20,462,559 13,439,036
Buckhead Court 150,456 7,851,757CAMBRIDGE SQUARE 151,176 3,616,605 -
Cambridge Square 72,374 3,645,163CARMEL COMMONS 434,794 12,461,589 -
Carmel Commons 173,087 11,590,750CARRIAGE GATE 735,440 3,601,319 -
Carriage Gate 544,405 3,665,243 2,377,489
Chasewood Plaza 2,187,169 15,195,351CENTER OF SEVEN SPRINGS 1,115,924 8,364,550 -
CHASEWOOD PLAZA 2,660,845 14,905,655 8,000,000
City View 162,095 5,409,947CHERRY GROVE 265,335 15,978,108 -
Columbia Marketplace 543,836 5,169,718CITY VIEW SHOPPING CENTER 273,129 5,321,823 -
COLUMBIA MARKETPLACE 679,672 5,063,522 2,586,000
Country Club 453,904 4,431,807COUNTRY CLUB 563,066 4,339,326 2,264,000
Courtyard 1,097,497 5,045,782COURTYARD SHOPPING CENTER 1,228,647 4,983,486 1,378,000
Cromwell Square 168,957 7,888,223 4,518,368
CummingCROMWELL SQUARE 372,007 7,712,422 4,464,426
CUMMING 400 226,366 10,570,478 6,489,309
Dunwoody Hall 173,531 8,110,424501,697 10,428,512 6,419,476
DELK SPECTRUM 304,219 13,729,254 8,138,553
DUNWOODY HALL 387,763 8,212,108 -
Dunwoody Village 138,770 9,510,742 5,864,972
East Port Plaza 221,661 14,744,972DUNWOODY VILLAGE 459,895 11,146,675 7,264,800
EAST POINTE 129,414 8,481,689 5,267,546
EAST PORT PLAZA 534,694 14,497,974 -
Ensley Square 60,018 3,976,403ENSLEY SQUARE 206,478 4,240,162 -
Garden Square 47,723 9,645,775 6,612,868
Glenwood Village 102,842 5,375,762 2,295,238
Harpeth VillageEVANS CROSSING 117,619 6,474,741 4,379,981
FLEMING ISLAND 78,219 9,289,987 3,522,104
FRANKLIN SQUARE 198,248 11,765,526 9,136,752
GARDEN SQUARE 244,096 9,805,519 6,516,686
GARNER FESTIVAL 124,404 25,363,892 -
7,843,372 4,682,835
Hyde Park Plaza 496,340 42,086,491GLENWOOD VILLAGE 257,101 5,253,748 2,211,233
HAMILTON MEADOWS 167,943 8,449,052 5,612,141
HARPETH VILLAGE FIELDSTONE 213,202 11,168,096 -
HIGHLAND SQUARE 135,556 11,839,416 3,942,071
HINSDALE LAKE COMMONS 31,394 19,226,300 -
HYDE PARK 1,381,919 43,823,893 24,750,000
Kingsdale 86,841 17,799,273KERNERSVILLE PLAZA 123,771 7,698,811 5,218,476
KINGSDALE SHOPPING CENTER 447,889 17,591,252 -
LaGrange Marketplace 409,552 3,961,310LAGRANGE MARKETPLACE 510,946 3,865,575 1,645,000
Loehmann's Plaza 379,505 17,719,911 10,000,000
Lovejoy Station 69,796 7,053,326LAKE PINE PLAZA 144,204 8,772,892 5,986,557
LAKESHORE 113,706 6,875,733 3,729,331
LOEHMANNS PLAZA 835,982 17,274,805 -
Lucedale Marketplace 269,896 2,574,052LOVEJOY STATION 209,663 6,913,459 -
LUCEDALE MARKETPLACE 340,083 2,513,419 1,390,000
Mainstreet Square 89,814 5,685,776MAINSTREET SQUARE 204,362 5,595,954 -
Mariner's Village 111,949 7,530,856MARINERS VILLAGE 273,727 7,396,605 -
MarketplaceMARKETPLACE ST PETE 375,700 5,797,530 -
Alexander City 677,302 7,418,298 4,933,946
MarketplaceMARKETPLACE CENTER OLD FORT 167,760 5,833,895 1,986,409
MARTIN DOWNS VILLAGE CENTER 1,298,279 8,816,395 4,150,000
MARTIN DOWNS VILLAGE SHOPPES 337,325 2,450,063 1,313,000
MAXTOWN ROAD (NORTHGATE) 107,300 7,890,285 5,440,112
MAYNARD CROSSING 286,993 17,863,188 11,711,134
MEMORIAL BEND SHOPPING CENTER 696,953 15,587,170 8,335,963
MERCHANTS VILLAGE 196,291 7,206,419 -
Murphreesburo 76,255 5,925,400 2,035,643
Market PlaceMILLHOPPER 932,895 4,662,865 2,401,000
NEWBERRY SQUARE 1,366,907 10,226,045 -
St. Petersburg 245,981 5,848,874NORTH MIAMI SHOPPING CENTER 605,557 2,104,876 1,160,000
OAKLEY PLAZA 290,343 7,954,275 -
Martin Downs Shoppes 278,923 2,494,432 1,313,000
Martin Downs Village Center 1,056,091 8,497,050 4,150,000
Memorial Bend 279,358 14,523,483 8,545,536
Merchants Village 67,584 4,149,641OCEAN BREEZE 929,096 6,086,134 2,805,000
OLD ST AUGUSTINE PLAZA 440,733 9,194,910 -
Millhopper 739,083 4,070,108 2,401,000
(*) The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
ORCHARD SQUARE 332,356 5,210,057 -
PACES FERRY PLAZA 630,953 13,775,655 -
PALM HARBOUR SHOPPING VILLAGE 700,457 14,256,300 -
PALM TRAILS PLAZA 84,337 8,173,182 -
PARAGON BRANDON JV - - -
PARK PLACE 33,228 10,172,879 -
PARKWAY STATION 319,124 5,230,737 -
PEACHLAND PROMENADE 571,096 5,918,117 -
PEARTREE VILLAGE 673,528 23,378,769 12,777,420
PIKE CREEK 226,061 23,711,528 12,442,166
PINE TREE PLAZA 48,350 2,401,650 -
POWERS FERRY SQUARE 798,322 18,854,022 -
POWERS FERRY 238,707 5,195,285 2,917,943
QUADRANT AT SOUTHPOINT I - - -
QUEENSBOROUGH 13,544 8,313,512 -
REGENCY COURT 718,475 15,802,438 -
REGENCY SQUARE BRANDON 6,100,596 20,176,861 12,000,000
RIVERMONT STATION 395,653 13,016,464 -
ROSWELL VILLAGE 300,168 8,962,443 -
RUSSELL RIDGE 633,539 8,084,939 -
SANDY PLAINS VILLAGE 640,709 13,112,069 -
SANDY SPRINGS VILLAGE 131,641 3,335,811 -
SHOPPES @ 104 138,509 12,035,920 -
SHOPPES AT MASON 111,748 6,822,763 3,925,611
SILVERLAKE 104,315 9,062,414 -
SOUTH MONROE 54,424 7,712,550 -
SOUTH POINTE CROSSING - 13,000 -
ST ANN SQUARE 143,068 6,996,097 4,972,117
STATLER SQUARE 157,923 9,549,848 5,472,654
TAMIAMI TRAILS 275,743 9,341,519 -
TEQUESTA SHOPPES 385,668 8,057,587 -
TERRACE WALK 624,306 3,613,579 683,000
THE MARKETPLACE 857,541 7,251,022 2,647,000
TOWN CENTER AT MARTIN DOWNS 260,896 6,106,061 -
TOWN SQUARE 97,568 3,397,537 -
TROWBRIDGE CROSSING EQUIPORT 109,285 3,765,539 1,800,000
UNION SQUARE SHOPPING CENTER 374,850 7,523,953 -
UNIVERSITY COLLECTION 502,408 11,107,506 -
UNIVERSITY MARKETPLACE 1,826,835 10,877,769 -
VILLAGE CENTER 6 878,291 14,144,368 -
VILLAGE IN TRUSSVILLE 529,193 3,815,283 1,775,000
WELLEBY 554,962 6,659,556 -
WELLINGTON MARKET PLACE 1,127,296 17,571,717 -
WELLINGTON TOWN SQUARE 486,760 9,234,432 -
WEST COUNTY 844,740 5,766,621 3,190,000
WESTCHESTER PLAZA 172,301 8,140,925 5,815,752
WESTLAND I - - -
WINDMILLER PLAZA PHASE I 141,017 13,669,864 -
WOODCROFT SHOPPING CENTER 299,819 6,715,754 -
WORTHINGTON PARK CENTRE 192,029 13,208,032 4,967,081
------------------------------------------------
58,983,738 1,124,200,275 297,736,226
================================================
S-3
Schedule III
-continued-
Initial Cost Total Cost
----------------------------- Cost Capitalized ---------------------------------------
Building & Subsequent to Building &
Land Improvements Acquistion Land Improvements Total
---- ------------ ---------- ---- ------------ -----
Newberry Square 2,341,460 8,466,651 671,840 2,341,460 9,138,491 11,479,951
North Miami Shopping Center 603,750 2,021,250 85,432 603,750 2,106,682 2,710,432
Oakley Plaza 1,772,540 6,406,975 20,481 1,772,540 6,427,456 8,199,996
Ocean Breeze 1,250,000 3,341,199 2,358,464 1,527,400 5,422,263 6,949,663
Old St. Augustine Plaza 2,047,151 7,355,162 36,833 2,047,151 7,391,995 9,439,146
Orchard Square 1,155,000 4,135,353 248,460 1,155,000 4,383,813 5,538,813
Paces Ferry Plaza 2,811,522 9,967,557 222,957 2,811,522 10,190,514 13,002,036
Palm Harbour 2,899,928 10,998,230 315,287 2,899,928 11,313,517 14,213,445
Paragon Cable Building 570,000 2,472,537 - 570,000 2,472,537 3,042,537
Parkway Station 1,123,200 4,283,917 115,856 1,123,200 4,399,773 5,522,973
Peachland Promenade 1,284,562 5,143,564 58,119 1,284,562 5,201,683 6,486,245
Peartree Village 5,196,653 8,732,711 4,408,150 5,196,653 13,140,861 18,337,514
Pine Tree Plaza 539,000 1,995,927 - 539,000 1,995,927 2,534,927
Powers Ferry Square 3,607,647 12,790,749 6,762 3,607,647 12,797,511 16,405,158
Powers Ferry Village 1,190,822 4,223,606 - 1,190,822 4,223,606 5,414,428
Quadrant 2,342,823 15,541,967 1,315,295 2,343,699 16,856,386 19,200,085
Regency Square at Brandon 577,975 18,156,719 7,307,792 4,491,461 21,551,025 26,042,486
Regency Court 3,571,337 12,664,014 3,480 3,571,337 12,667,494 16,238,831
Rivermont Station 2,887,213 10,445,109 - 2,887,213 10,445,109 13,332,322
Roswell Village 2,304,345 6,777,200 - 2,304,345 6,777,200 9,081,545
Russell Ridge 2,153,214 - 6,546,957 2,215,341 6,484,830 8,700,171
Sandy Plains Village 2,906,640 10,412,440 1,635 2,906,640 10,414,075 13,320,715
Sandy Springs Village 733,126 2,565,411 65,000 733,126 2,630,411 3,363,537
Seven Springs 1,737,994 6,290,048 1,424,083 1,757,441 7,694,684 9,452,125
Tamiami Trails 2,046,286 7,462,646 - 2,046,286 7,462,646 9,508,932
Tequesta Shoppes 1,782,000 6,426,042 120,447 1,782,000 6,546,489 8,328,489
Terrace Walk 1,196,286 2,935,683 92,305 1,196,286 3,027,988 4,224,274
Town Center at Martin Downs 1,364,000 4,985,410 7,903 1,364,000 4,993,313 6,357,313
Town Square 438,302 1,555,481 - 438,302 1,555,481 1,993,783
Trowbridge Crossing 910,263 1,914,551 - 910,263 1,914,551 2,824,814
Union Square 1,578,654 5,933,889 108,926 1,578,654 6,042,815 7,621,469
University Collection 2,530,000 8,971,597 90,249 2,530,000 9,061,846 11,591,846
University Marketplace 3,250,562 7,044,579 2,209,804 3,532,046 8,972,899 12,504,945
Village Center 3,885,444 10,799,316 295,220 3,885,443 11,094,537 14,979,980
Villages of Trussville 973,954 3,260,627 88,634 973,954 3,349,261 4,323,215
Welleby Plaza 1,496,000 5,371,636 253,171 1,496,000 5,624,807 7,120,807
Wellington Market Place 5,070,384 13,308,972 222,784 5,070,384 13,531,756 18,602,140
Wellington Town Square 1,914,000 7,197,934 574,179 1,914,000 7,772,113 9,686,113
West County Marketplace 1,491,462 4,993,155 123,569 1,491,462 5,116,724 6,608,186
Westland One 198,344 1,747,391 60,445 198,344 1,807,836 2,006,180
Woodcroft Shopping Center 1,419,000 5,211,981 312,251 1,419,000 5,524,232 6,943,232
------------- ------------ ---------- ----------- ------------ -----------
170,813,416 582,552,737 46,435,214 177,245,784 622,555,583 799,801,367
============= ============ =========== =========== ============ ===========
(*) The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
S-4
Schedule III
-continued-
Total Cost,
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
------------ ------------ ---------
Newberry Square 1,072,541 10,407,410 6,656,968
North Miami Shopping Center 488,954 2,221,478 1,160,000
Oakley Plaza 126,236 8,073,760 -
Ocean Breeze 748,808 6,200,855 2,805,000
Old St. Augustine Plaza 209,150 9,229,996 -
Orchard Square 219,788 5,319,025 -
Paces Ferry Plaza 269,031 12,733,005 5,065,000
Palm Harbour 393,904 13,819,541 -
Paragon Cable Building 242,120 2,800,417 -
Parkway Station 206,224 5,316,749 -
Peachland Promenade 420,484 6,065,761 4,280,979
Peartree Village 196,402 18,141,112 12,916,746
Pine Tree Plaza - 2,534,927 -
Powers Ferry Square 309,526 16,095,632 -
Powers Ferry Village 102,184 5,312,244 2,949,686
Quadrant 4,356,804 14,843,281 -
Regency Square at Brandon 5,449,050 20,593,436 12,000,000
Regency Court 306,445 15,932,386 5,732,000
Rivermont Station 130,374 13,201,948 -
Roswell Village 125,446 8,956,099 -
Russell Ridge 445,001 8,255,170 6,403,370
Sandy Plains Village 368,719 12,951,996 -
Sandy Springs Village 56,976 3,306,561 -
Seven Springs 868,180 8,583,945 -
Tamiami Trails 77,983 9,430,949 -
Tequesta Shoppes 216,001 8,112,488 -
Terrace Walk 545,763 3,678,511 683,000
Town Center at Martin Downs 135,242 6,222,071 -
Town Square 37,632 1,956,151 1,525,500
Trowbridge Crossing 36,818 2,787,996 1,800,000
Union Square 211,085 7,410,384 -
University Collection 270,068 11,321,778 -
University Marketplace 1,553,812 10,951,133 -
Village Center 577,869 14,402,111 -
Villages of Trussville 427,292 3,895,923 1,775,000
Welleby Plaza 336,416 6,784,391 -
Wellington Market Place 767,986 17,834,154 -
Wellington Town Square 292,551 9,393,562 -
West County Marketplace 683,268 5,924,918 3,190,000
Westland One 391,646 1,614,534 -
Woodcroft Shopping Center 135,538 6,807,694 -
---------- ----------- ------------
40,795,801 759,005,566 227,730,193
========== =========== ============
(*) The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
S-5
Schedule III
-continued-REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1998
Depreciation and amortization of the Company's investment in buildings and
improvements reflected in the statement of operationsoperation is calculated over the
estimated useful lives of the assets as follows:
Buildings and improvements up to 40 years
The aggregate cost for Federal income tax purposes was approximately
$719,377,653$1.029 billion at December 31, 1997.1998.
The changes in total real estate assets for the period ended December 31,
1998, 1997 and 1996:
1998 1997 1996
-------------------- --------------------------------- -------------- ------------
Balance, beginning of period 799,801,367 389,007,481 278,731,167
Developed or acquired properties 399,305,955 408,475,251 107,378,064
Sale of property (24,248,801) (2,907,503) -
Improvements 8,325,492 5,226,138 2,898,250
-------------------- ---------------------------------- -------------- ------------
Balance, end of period $1,183,184,013 799,801,367 389,007,481
==================== ==================
================ ============== ============
The changes in accumulated depreciation for the period ended December 31,
1998, 1997 and 1996:
1998 1997 1996
-------------------- ------------------
--------------- -------------- ------------
Balance, beginning of period 40,795,801 26,213,225 18,631,310
Sale of property (5,121,929) (713,176) -
Depreciation for period 23,309,866 15,295,752 7,581,915
-------------------- --------------------------------- -------------- ------------
Balance, end of period $58,983,738 40,795,801 26,213,225
==================== ================================= ============== ============
S-6