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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO
COMMISSION FILE NUMBER 1-13038
CRESCENT REAL ESTATE EQUITIES COMPANY
------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
TEXAS 52-1862813
- -------------------------------- ----------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
777 Main Street, Suite 2100, Fort Worth, Texas 76102
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (817) 321-2100
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of each class: on Which Registered:
- -------------------- -------------------
Common Shares of Beneficial Interest par value $0.01 per share New York Stock Exchange
Series A Convertible Cumulative Preferred Shares of
Beneficial Interest par value $0.01 per share New York Stock Exchange
Series B Cumulative Redeemable Preferred Shares of
Beneficial Interest par value $0.01 per share New York Stock Exchange
- --------------------------------------------------------------------------------
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 twelve (12) months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past ninety (90) days.
YES X NO
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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. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
YES X NO
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As of June 30, 2004, the aggregate market value of the 92,476,149 common shares
held by non-affiliates of the registrant was approximately $1.5 billion.
Number of Common Shares outstanding as of March 2, 2005: 99,820,354
Number of Series A Preferred Shares outstanding as of March 2, 2005: 14,200,000
Number of Series B Preferred Shares outstanding as of March 2, 2005: 3,400,000
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement to be filed with the Securities and Exchange
Commission for Registrant's 2005 Annual Meeting of Shareholders to be held in
May 2005 are incorporated by reference into Part III.
TABLE OF CONTENTS
PAGE
PART I.
Item 1. Business............................................................... 3
Item 2. Properties............................................................. 13
Item 3. Legal Proceedings...................................................... 23
Item 4. Submission of Matters to a Vote of Security Holders.................... 23
PART II.
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.. 24
Item 6. Selected Financial Data................................................ 26
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................. 27
Item 7A. Quantitative and Qualitative Disclosures About Market Risk............. 61
Item 8. Financial Statements and Supplementary Data............................ 62
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................... 123
Item 9A. Controls and Procedures................................................ 123
Item 9B. Other Information...................................................... 127
PART III.
Item 10. Trust Managers and Executive Officers of the Registrant................ 129
Item 11. Executive Compensation................................................. 129
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters............................................ 129
Item 13. Certain Relationships and Related Transactions......................... 129
Item 14. Principal Accountant Fees and Services................................. 129
PART IV.
Item 15. Exhibits and Financial Statement Schedules............................. 130
2
PART I
ITEM 1. BUSINESS
References to "we," "us" or "our" refer to Crescent Real Estate Equities
Company and, unless the context otherwise requires, Crescent Real Estate
Equities Limited Partnership, which we refer to as our Operating Partnership,
and our other direct and indirect subsidiaries. We conduct our business and
operations through the Operating Partnership, our other subsidiaries and our
joint ventures. References to "Crescent" refer to Crescent Real Estate Equities
Company. The sole general partner of the Operating Partnership is Crescent Real
Estate Equities, Ltd., a wholly- owned subsidiary of Crescent Real Estate
Equities Company, which we refer to as the General Partner.
GENERAL
We operate as a real estate investment trust, or REIT, for federal income
tax purposes and provide management, leasing and development services for some
of our properties.
At December 31, 2004, our assets and operations consisted of four
investment segments:
- Office Segment;
- Resort/Hotel Segment;
- Residential Development Segment; and
- Temperature-Controlled Logistics Segment.
Within these segments, we owned in whole or in part the following
operating real estate assets, which we refer to as the Properties:
- THE OFFICE SEGMENT consisted of 78 office properties, which we refer
to as the Office Properties, located in 29 metropolitan submarkets
in eight states, with an aggregate of approximately 31.6 million net
rentable square feet. Fifty-seven of the Office Properties are
wholly-owned and twenty-one are owned through joint ventures, two of
which are consolidated and nineteen of which are unconsolidated.
- THE RESORT/HOTEL SEGMENT consisted of five luxury and destination
fitness resorts and spas with a total of 1,036 rooms/guest nights
and three upscale business-class hotel properties with a total of
1,376 rooms, which we refer to as the Resort/Hotel Properties. Seven
of the Resort/Hotel Properties are wholly-owned and one is owned
through a joint venture that is consolidated.
- THE RESIDENTIAL DEVELOPMENT SEGMENT consisted of our ownership of
common stock representing interests of 98% to 100% in four
residential development corporations. These Residential Development
Corporations, through partnership arrangements, owned in whole or in
part 23 upscale residential development properties, which we refer
to as the Residential Development Properties.
- THE TEMPERATURE-CONTROLLED LOGISTICS SEGMENT consisted of our 31.7%
interest in AmeriCold Realty Trust, or AmeriCold, a REIT. As of
December 31, 2004, AmeriCold operated 103 facilities, of which 87
were wholly-owned, one was partially-owned and fifteen were managed
for outside owners. The 88 owned facilities, which we refer to as
the Temperature-Controlled Logistics Properties, had an aggregate of
approximately 443.7 million cubic feet (17.6 million square feet) of
warehouse space. AmeriCold also owned two quarries and the related
land.
See Note 3, "Segment Reporting," included in Item 8, "Financial Statements
and Supplementary Data," for a table showing selected financial information for
each of these investment segments for the three years ended December 31, 2004,
2003 and 2002, and total assets, consolidated property level financing,
consolidated other liabilities and minority interests for each of these
investment segments at December 31, 2004 and 2003.
See Note 1, "Organization and Basis of Presentation," included in Item 8,
"Financial Statements and Supplementary Data," for a table that lists our
principal subsidiaries and the properties that they own.
3
See Note 9, "Investments in Unconsolidated Companies," included in Item 8,
"Financial Statements and Supplementary Data," for a table that lists our
ownership in significant unconsolidated joint ventures and investments as of
December 31, 2004.
BUSINESS OBJECTIVES AND STRATEGIES
BUSINESS OBJECTIVES
Our primary business objective is to be the recognized leader in real
estate investment management of premier commercial office assets and to allocate
capital to high-yielding resort and residential real estate. We strive to
provide an attractive return on equity to our shareholders, through our focus on
increasing earnings, cash flow growth and predictability, and continually
strengthening our balance sheet. We also strive to attract and retain the best
talent available, to align their interests with the interests of our
shareholders and to empower management through the development and
implementation of a cohesive set of operating, investing and financing
strategies.
OPERATING STRATEGIES
We seek to enhance our operating performance by distinguishing ourselves
as the recognized leader in real estate investment management of premier
commercial office assets.
Our operating strategies include:
- using our operating platform to provide superior asset management
services to institutional partners in our joint venture office
assets;
- operating the Office Properties as long-term investments;
- providing exceptional customer service;
- increasing occupancies, rental rates and same-store net operating
income while continuing to limit tenant concessions to market
levels;
- capitalizing on economies of scale through dominant market position;
and
- emphasizing brand recognition of our Class A Office Properties and
luxury and destination fitness resorts and spas.
INVESTING STRATEGIES
We focus on investment opportunities primarily within the Office Segment
in markets considered "demand-driven," or metropolitan areas expected to enjoy
significant long-term employment and office demand growth. These investment
opportunities are evaluated in light of our long-term investment strategy of
investing in assets within markets with at least above national average economic
expansion rates combined with significant office development supply constraints.
We also focus on allocating capital in businesses which have experienced
operators, particularly in premier residential development and resort real
estate. Investment opportunities are expected to provide growth in earnings and
cash flow after applying management skills, renovation and expansion capital and
strategic vision.
Our investment strategies include:
- capitalizing on strategic acquisition opportunities, including
acquisitions with joint venture capital resources, primarily within
our investment segments;
- continually evaluating existing portfolio for potential
joint-venture opportunities with institutional partners;
- continually reviewing opportunities to maximize returns on assets
through strategic dispositions of assets based on current and
prospective market valuations;
4
- allocating capital to residential development partners for
opportunities that increase return on equity and add diversification
to our portfolio;
- investing in real estate-related securities and mezzanine debt to
maximize returns on excess capital; and
- evaluating future repurchases of our common shares, considering
stock price, cost of capital, alternative investment options and
growth implications.
FINANCING STRATEGIES
We employ a disciplined set of financing strategies to fund our operating
and investing activities.
Our financing strategies include:
- funding operating expenses and capital expenditures, debt service
payments and distributions to shareholders and unitholders primarily
through our cash flow from operations as well as return of capital
from the Residential Development Segment;
- taking advantage of market opportunities to refinance existing debt
to reduce interest costs, maintaining a conservative debt maturity
schedule and expanding our lending group;
- minimizing our exposure to market changes in interest rates through
fixed rate debt and interest rate swaps to limit floating rate debt;
and
- utilizing a combination of debt, equity, joint venture capital and
strategic asset disposition alternatives to finance acquisition and
development opportunities.
AVAILABLE INFORMATION
You can find our website on the Internet at www.crescent.com. We provide
free of charge on our website our annual report on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K, and amendments to those reports as
soon as reasonably practicable after electronically filed with or furnished to
the Securities and Exchange Commission.
EMPLOYEES
As of March 2, 2005, we had approximately 747 employees. None of these
employees are covered by collective bargaining agreements. We consider our
employee relations to be good.
TAX STATUS
We have elected to be taxed as a REIT under Sections 856 through 860 of
the U.S. Internal Revenue Code of 1986, as amended, or the Code, and operate in
a manner intended to enable us to continue to qualify as a REIT. As a REIT, we
generally will not be subject to corporate federal income tax on net income that
we currently distribute to our shareholders, provided that we satisfy certain
organizational and operational requirements including the requirement to
distribute at least 90% of our REIT taxable income to our shareholders each
year. If we fail to qualify as a REIT in any taxable year, we will be subject to
federal income tax (including any applicable alternative minimum tax) on our
taxable income at regular corporate tax rates. We are subject to certain state
and local taxes.
We have elected to treat certain of our corporate subsidiaries as taxable
REIT subsidiaries, each of which we refer to as a TRS. In general, a TRS may
perform additional services for our tenants and may engage in any real estate or
non-real estate business (except for the operation or management of health care
facilities or lodging facilities or the provision to any person, under a
franchise, license or otherwise, of rights to any brand name under which any
lodging facility or health care facility is operated). A TRS is subject to
corporate federal income tax.
5
ENVIRONMENTAL MATTERS
We and our Properties are subject to a variety of federal, state and local
environmental, health and safety laws, including:
- Comprehensive Environmental Response, Compensation, and Liability
Act, as amended ("CERCLA");
- Resource Conservation & Recovery Act;
- Clean Water Act;
- Clean Air Act;
- Toxic Substances Control Act; and
- Occupational Safety & Health Act.
The application of these laws to a specific property that we own will be
dependent on a variety of property-specific circumstances, including the former
uses of the property and the building materials used at each property. Under
certain environmental laws, principally CERCLA and comparable state laws, a
current or previous owner or operator of real estate may be required to
investigate and clean up certain hazardous or toxic substances,
asbestos-containing materials, or petroleum product releases at the property.
They may also be held liable to a governmental entity or third parties for
property damage and for investigation and clean up costs such parties incur in
connection with the contamination, whether or not the owner or operator knew of,
or was responsible for, the contamination. In addition, some environmental laws
create a lien on the contaminated site in favor of the government for damages
and costs it incurs in connection with the contamination. The owner or operator
of a site also may be liable under certain environmental laws and common law to
third parties for damages and injuries resulting from environmental
contamination emanating from the site. Such costs or liabilities could exceed
the value of the affected real estate. The presence of contamination or the
failure to remediate contamination may adversely affect the owner's ability to
sell or lease real estate or to borrow using the real estate as collateral.
Our compliance with existing environmental, health and safety laws has not
had a material adverse effect on our financial condition or results of
operations, and management does not believe it will have such an effect in the
future. To further protect our financial interests regarding environmental
matters, we have in place a Pollution and Remediation Legal Liability insurance
policy which will respond in the event of certain future environmental
liabilities. In addition, we are not aware of any outstanding or future material
costs or liabilities due to environmental contamination at properties we
currently own or owned in the past. However, we cannot predict the impact of new
or changed laws or regulations on our current properties or on properties that
we may acquire in the future.
INDUSTRY SEGMENTS
OFFICE SEGMENT
OWNERSHIP STRUCTURE
As of December 31, 2004, we owned or had an interest in 78 Office
Properties located in 29 metropolitan submarkets in eight states, with an
aggregate of approximately 31.6 million net rentable square feet. As lessor, we
have retained substantially all of the risks and benefits of ownership of the
Office Properties and account for the leases of our 59 consolidated Office
Properties as operating leases. Fifty-seven of the Office Properties are
wholly-owned and twenty-one are owned through joint ventures, two of which are
consolidated and nineteen of which are unconsolidated. Additionally, we provide
management and leasing oversight services for all of our Office Properties.
RECENT DEVELOPMENTS
JOINT VENTURES
During the year ended December 31, 2004, we contributed Office Properties
(Houston Center, Post Oak Central, The Crescent, Fountain Place and Trammell
Crow Center) to limited partnerships in which we have a 23.85% interest.
Subsequent to December 31, 2004, we contributed 1301 McKinney Street and an
adjacent parking garage to a limited partnership in which we have a 23.85%
interest.
6
PURCHASES
During the year ended December 31, 2004, we purchased the following office
properties:
- Peakview Tower in Denver, Colorado;
- 1301 McKinney Street in Houston, Texas;
- One Live Oak in Atlanta, Georgia;
- The Alhambra in Miami, Florida;
- Dupont Centre in Irvine, California;
- Six Office Properties and seven retail parcels within Hughes Center
in Las Vegas, Nevada.
Subsequent to December 31, 2004, we purchased the Exchange Building in
Seattle, Washington.
SALES
During the year ended December 31, 2004, we sold the following office
properties:
- 12404 Park Central in Dallas, Texas;
- 5050 Quorum in Dallas, Texas;
- Addison Tower in Dallas, Texas;
- Ptarmigan Place in Denver, Colorado;
- Liberty Plaza in Dallas, Texas;
- 1800 West Loop South in Houston, Texas.
Subsequent to December 31, 2004, we sold Albuquerque Plaza in Albuquerque,
New Mexico.
MARKET INFORMATION
The Office Property portfolio reflects our research-driven strategy of
investing in first-class assets within markets that have significant potential
for long-term rental growth. Within our selected submarkets, we have focused on
premier locations that management believes are able to attract and retain the
highest quality tenants and command premium rents. Consistent with our long-term
investment strategies, we have sought new acquisitions that have strong economic
returns based on in-place tenancy and/or strong value-creation potential given
the market and Crescent's core competencies. Moreover, we have also sought
assets with dominant positions within their markets and submarkets due to
quality and/or location which mitigates the risks of market volatility.
Accordingly, management's long-term investment strategy not only demands an
acceptable current cash flow return on invested capital, but also considers
long-term cash flow growth prospects. We apply a well-defined leasing strategy
in order to capture the potential rental growth in our portfolio of Office
Properties from occupancy gains within the markets and the submarkets in which
we have invested.
In selecting the Office Properties, our research has analyzed demographic,
economic and market data to identify metropolitan areas expected to enjoy
significant long-term employment and office demand growth. The markets in which
we are currently invested are projected to continue to exceed national
employment and population growth rates, as illustrated in the following table.
In addition, we consider these markets "Demand-Driven". Our research-based
office investment strategy also includes metropolitan regions with at least
above national average economic expansion rates combined with significant office
development supply constraints. Additionally, our investment strategy seeks
geographic and regional economic diversification within the universe of markets
expected to experience excellent economic and office demand growth.
7
PROJECTED POPULATION GROWTH AND EMPLOYMENT GROWTH FOR ALL COMPANY MARKETS
POPULATION EMPLOYMENT
GROWTH GROWTH
METROPOLITAN STATISTICAL AREA 2005-2007 2005-2007
- ----------------------------- ---------- ----------
Atlanta, GA 7.5 7.4
Austin, TX 9.1 9.8
Colorado Springs, CO 5.2 4.9
Dallas, TX 6.4 6.7
Denver, CO 4.1 5.1
Fort Worth, TX 6.5 6.6
Houston, TX 5.1 5.8
Las Vegas, NV 11.6 8.2
Miami, FL 3.0 4.5
Orange County, CA 4.1 6.0
Phoenix, AZ 7.9 8.6
San Diego, CA 5.6 6.5
Seattle, WA 4.3 7.8
United States 2.8 4.3
- -----------------------------
Source: Economy.com, Inc. Data represents total percentage change for years
2005, 2006 and 2007.
Our major office markets, which include Dallas, Houston, Austin, Denver,
Miami, and Las Vegas, currently enjoy rising employment and are among the
leading metropolitan areas for population and employment growth over the next
three years.
UNEMPLOYMENT RATES FOR COMPANY MARKETS
AS OF DECEMBER 31,
------------------
MARKET 2004 2003
- ------------- ---- ----
United States 5.4% 6.0%
Texas 5.4 6.0
Dallas 5.5 6.1
Houston 5.5 6.1
Austin 4.0 4.8
Denver 5.1 6.0
Miami 5.4 6.2
Las Vegas 3.5 4.5
- -----------------
Source: U.S. Bureau of Labor Statistics and Texas Workforce Commission
The market performance of all of our office markets improved in 2004.
Occupancy rose and economic net absorption (the measure of office demand) turned
positive in almost all the markets. The statistics for the Houston market did
not reflect improvement based on annual performance, but in the second half of
2004, Houston did experience positive net absorption and occupancy improvement.
The Texas and Denver markets are still soft but have shown signs of recovery.
The Miami market remains healthy, and the Las Vegas market is one of the best
office markets in the country.
8
OFFICE MARKET ABSORPTION AND OCCUPANCY FOR COMPANY MARKETS(1)
ECONOMIC NET ABSORPTION ECONOMIC NET ABSORPTION
ALL CLASSES CLASS A ECONOMIC OCCUPANCY ECONOMIC OCCUPANCY
(IN SQUARE FEET) (IN SQUARE FEET) ALL CLASSES CLASS A
- --------- ----------------------- ------------------------ ------------------- -----------------
MARKET 2004 2003 2004 2003 2004 2003 2004 2003
- --------- --------- ---------- --------- ---------- ----- ----- ------ -----
Dallas 1,075,000 (4,161,000) 917,000 (830,000) 75.2% 74.7% 79.3% 78.3%
Houston 75,000 (1,972,000) (345,000) (1,010,000) 82.8% 83.0% 84.2% 84.8%
Austin 961,000 (1,532,000) 991,000 (363,000) 82.3% 80.4% 82.1% 77.5%
Denver 13,000 (1,884,000) 493,000 (19,000) 81.7% 82.2% 82.3% 81.5%
Miami 1,318,000 252,000 1,036,000 291,000 89.0% 87.1% 85.0% 81.4%
Las Vegas 1,892,000 928,000 615,000 154,000 88.8% 87.4% 91.1% 90.4%
- -----------------------------
Sources: CoStar Group (Dallas, Houston, Austin, Denver); Jones Lang LaSalle
(Miami); Grubb & Ellis Las Vegas (Las Vegas).
(1) Economic net absorption and economic occupancy exclude sublet space.
One of the reasons for the improved occupancy in 2004 is that most markets
have relatively low levels of construction activity. Therefore, all positive net
absorption translates directly into higher occupancy rates. The only market that
has significant construction (relative to its size) is Las Vegas, and its
occupancy levels demonstrate that this space, which is almost all Class B, is
being readily absorbed.
OFFICE MARKET CONSTRUCTION ACTIVITY FOR COMPANY MARKETS
OFFICE SPACE OFFICE SPACE OFFICE SPACE
COMPLETIONS COMPLETIONS UNDER
ALL CLASSES CLASS A CONSTRUCTION
(in square feet) --------------------- ------------------- ------------
MARKET 2004 2003 2004 2003 2004
- ---------------- --------- --------- ------- --------- ------------
Dallas 350,000 561,000 181,000 498,000 408,000
Houston 453,000 1,974,000 166,000 1,633,000 641,000
Austin 192,000 791,000 74,000 671,000 37,000
Denver 691,000 842,000 186,000 521,000 635,000
Miami 1,092,000 748,000 931,000 642,000 227,000
Las Vegas 1,296,000 1,018,000 210,000 139,000 1,488,000
- ------------------------
Sources: CoStar Group (Dallas, Houston, Austin, Denver); Jones Lang LaSalle
(Miami); Colliers International and Restrepo Consulting Group, LLC (Las Vegas).
COMPETITION
Our Office Properties, primarily Class A properties located within the
southwest, individually compete against a wide range of property owners and
developers, including property management companies and other REITs, that offer
space in similar classes of office properties (specifically Class A and Class B
properties). A number of these owners and developers may own more than one
property. The number and type of competing properties in a particular market or
submarket could have a material effect on our ability to lease space and
maintain or increase occupancy or rents in our existing Office Properties. We
believe, however, that the quality services and individualized attention that we
offer our tenants, together with our active preventive maintenance program and
superior building locations within markets, enhance our ability to attract and
retain tenants for our Office Properties. In addition, as of December 31, 2004,
on a weighted average basis, we owned approximately 14.7% of the Class A office
space in the 29 submarkets in which we owned Class A office properties, and
23.1% of the Class B office space in the one submarket in which we owned Class B
office properties. Management believes that ownership of a significant
percentage of office space in a particular market reduces property operating
expenses, enhances our ability to attract and retain tenants and potentially
results in increases in our net income.
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DIVERSIFIED TENANT BASE
Our top five tenants accounted for approximately 13% of our total Office
Segment revenues as of December 31, 2004. The loss of one or more of our major
tenants would have a temporary adverse effect on our financial condition and
results of operations until we are able to re-lease the space previously leased
to these tenants. Based on rental revenues from office leases in effect as of
December 31, 2004, no single tenant accounted for more than 6% of our total
Office Segment revenues for 2004.
RESORT/HOTEL SEGMENT
OWNERSHIP STRUCTURE
As of December 31, 2004, we owned or had an interest in eight Resort/Hotel
Properties. We hold one of the Resort/Hotel Properties, the Fairmont Sonoma
Mission Inn & Spa, through a joint venture arrangement, pursuant to which we own
an 80.1% interest in the limited liability company that owns the property. The
remaining Resort/Hotel Properties are wholly-owned.
Seven of the Resort/Hotel Properties are leased to taxable REIT
subsidiaries that we own or in which we have an interest. The Omni Austin Hotel
is leased to HCD Austin Corporation, an unrelated third party. Third party
operators manage all of the Resort/Hotel Properties.
RECENT DEVELOPMENTS
CANYON RANCH
On January 18, 2005, we formed two new entities, which we collectively
refer to as Canyon Ranch, with the founders of Canyon Ranch. As a result, all
Canyon Ranch assets are held 48% by us and 52% by its founders. The assets
contributed or sold to Canyon Ranch by the equity owners comprise the following:
- Canyon Ranch Tucson and Canyon Ranch Lenox Destination Resorts;
- Canyon Ranch SpaClub at the Venetian Resort in Las Vegas;
- Canyon Ranch SpaClub on the Queen Mary 2 ocean liner;
- Canyon Ranch Living Community in Miami, Florida;
- Canyon Ranch SpaClub at the Gaylord Palms Resort in Kissimee, Florida;
- All Canyon Ranch trade names and trademarks;
- Resort management contracts.
As part of the transaction, Canyon Ranch completed a private placement of
$110 million of Mandatorily Redeemable Convertible Preferred Membership units
and completed a $95 million mortgage financing. As a result of these
transactions, we received approximately $91.9 million which was used to pay down
or defease debt related to our previous investment in the properties and to pay
down our credit facility.
HYATT REGENCY HOTEL
On October 19, 2004, we completed the sale of the Hyatt Regency Hotel in
Albuquerque, New Mexico.
MARKET INFORMATION
Lodging demand is highly dependent upon the global economy and volume of
business travel as well as leisure travel. The hospitality market began to
soften in early 2001 as the national economy went into recession. In 2001 and
2002, the industry experienced declines in occupancy, room rates, and revenue
per available room (RevPAR is a combination of occupancy and room rates and is
the chief measure of hotel market performance). Leisure travel recovered
slightly in 2003, but business travel remained weak. As a result, market
conditions were flat in 2003. In 2004, not only did leisure travel rise, but
business travel increased for the first time since 2000. The result for the
entire industry was a 2.2 percentage point increase in occupancy to 61.3%, a
4.0% increase in average daily room rates (ADR), and a 7.8% increase in RevPAR.
In 2004, for the luxury section of the industry, the most comparable to our
portfolio, hotel occupancy rose 3.4 percentage points to 68%, ADR increased
5.2%, and RevPAR increased 10.8%.
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COMPETITION
We believe that our luxury and destination fitness resorts and spas are
unique properties due to location, concept and high replacement cost, all of
which create barriers for competition to enter. However, the luxury and
destination fitness resorts and spas do compete against business-class hotels or
middle-market resorts in their geographic areas, as well as against luxury
resorts nationwide and around the world. Our upscale business class Resort/Hotel
Properties in Denver, Austin and Houston are business and convention center
hotels that compete against other business and convention center hotels.
RESIDENTIAL DEVELOPMENT SEGMENT
OWNERSHIP STRUCTURE
As of December 31, 2004, we owned common stock representing interests of
98% to 100% in four Residential Development Corporations, which in turn, through
joint ventures or partnership arrangements, owned in whole or in part 23
Residential Development Properties. The Residential Development Corporations are
responsible for the continued development and the day-to-day operations of the
Residential Development Properties.
RECENT DEVELOPMENTS
On September 14, 2004, we completed the sale of Breckenridge Commercial
Retail Center in Breckenridge, Colorado.
On October 21, 2004, we entered into a partnership agreement with
affiliates of JPI Multi-Family Investments, L.P. to develop a multi-family
luxury apartment project in Dedham, Massachusetts. We funded $13.3 million, or
100% of the equity, and received a limited partnership interest which earns a
preferred return and a profit split above the preferred return hurdle.
COMPETITION AND MARKET INFORMATION
Our Residential Development Properties compete against a variety of other
housing alternatives in each of their respective areas. These alternatives
include other planned developments, pre-existing single-family homes,
condominiums, townhouses and non-owner occupied housing, such as luxury
apartments. Management believes that Desert Mountain and the properties owned by
CRDI, representing our most significant investments in Residential Development
Properties, contain certain features that provide competitive advantages to
these developments.
Desert Mountain, a luxury residential and recreational private community
in Scottsdale, Arizona, offers six 18-hole Jack Nicklaus signature golf courses
with adjacent clubhouses. Management believes Desert Mountain has few direct
competitors due in part to the superior environmental attributes and the amenity
package that Desert Mountain offers to its members. Sources of competition come
from the resale market of existing lots and homes within Desert Mountain and
from a few smaller projects in the area. In addition, Desert Mountain has a
superior amenity package and future residential golf development in the
Scottsdale area is limited due to the lack of water available for golf course
use.
CRDI invests primarily in mountain resort residential real estate in
Colorado and California, and residential real estate in downtown Denver,
Colorado. Management believes that the Properties owned by CRDI have limited
direct competitors because the projects' locations are unique, land availability
is limited, and development rights are restricted in most of these locations.
Residential development demand is highly dependent upon the national
economy, mortgage interest rates and home sales. As the economy showed signs of
improvement in 2004, we generally saw improved activity, absorption, and pricing
in all regions of our residential investments.
11
TEMPERATURE-CONTROLLED LOGISTICS SEGMENT
OWNERSHIP STRUCTURE
As of December 31, 2004, the Temperature-Controlled Logistics Segment
consisted of our 31.7% interest in AmeriCold Realty Trust, or AmeriCold, a REIT.
AmeriCold operates 103 facilities, of which 87 are wholly-owned, one is
partially-owned and fifteen are managed for outside owners. The 88 owned
facilities, which we refer to as the Temperature-Controlled Logistics
Properties, have an aggregate of approximately 443.7 million cubic feet (17.6
million square feet) of warehouse space. AmeriCold also owns two quarries and
the related land.
RECENT DEVELOPMENTS
On November 18, 2004, Vornado Crescent Portland Partnership, or VCPP, the
partnership through which we owned our 40% interest in AmeriCold, sold a 20.7%
interest in AmeriCold to The Yucaipa Companies for $145.0 million, resulting in
a gain of approximately $12.3 million, net of transaction costs, to us. In
addition, Yucaipa will assist in the management of AmeriCold and may earn a
promote of up to 20% of the increase in value through December 31, 2007. The
promote is payable out of the remaining outstanding common shares in AmeriCold,
including the common shares held by us, and limited to 10% of these remaining
common shares.
Immediately following this transaction, VCPP dissolved and, after the
payment of all of its liabilities, distributed its remaining assets to its
partners. The assets distributed to us consisted of common shares, representing
an approximately 31.7% interest in AmeriCold, cash of approximately $34.3
million and a note receivable of approximately $8.0 million.
On November 4, 2004, AmeriCold purchased 100% of the ownership interests
in its tenant, AmeriCold Logistics, for approximately $47.7 million. The
purchase was funded by a contribution from AmeriCold's owner, VCPP, which funded
its contribution through a loan from our partner, Vornado Realty, L.P. On
November 4, 2004, AmeriCold also purchased 100% of the ownership interests in
Vornado Crescent and KC Quarry, L.L.C., or VCQ, for approximately $24.9 million.
AmeriCold used a cash contribution from its owner, of which our portion was
approximately $9.9 million, to fund the purchase. As a result of our 56%
ownership interest in VCQ, we received proceeds from the sale of VCQ of
approximately $13.2 million.
On February 5, 2004, AmeriCold completed a $254.4 million mortgage
financing with Morgan Stanley Mortgage Capital Inc., which resulted in a cash
distribution to us of $90.0 million.
BUSINESS AND INDUSTRY INFORMATION
AmeriCold provides the food industry with refrigerated warehousing,
transportation management services and other logistical services. The
Temperature-Controlled Logistics Properties consist of production, distribution
and public facilities. In addition, AmeriCold manages facilities owned by its
customers for which it earns fixed and incentive fees. Production facilities
differ from distribution facilities in that they typically serve one or a small
number of customers located nearby. These customers store large quantities of
processed or partially processed products in the facility until they are further
processed or shipped to the next stage of production or distribution.
Distribution facilities primarily serve customers who store a wide variety of
finished products to support shipment to end-users, such as food retailers and
food service companies, in a specific geographic market. Public facilities
generally serve the needs of local and regional customers under short-term
agreements. Food manufacturers and processors use public facilities to store
capacity overflow from their production facilities or warehouses. These
facilities also provide a number of additional services such as blast freezing,
import/export and labeling.
AmeriCold provides supply chain management solutions to food manufacturers
and retailers who require multi-temperature storage, handling and distribution
capability for their products. Service offerings include comprehensive
transportation management, supply chain network modeling and optimization,
consulting and grocery retail-based distribution strategies such as multi-vendor
consolidation, direct-store delivery (DSD) and seasonal product distribution.
AmeriCold's technology provides food manufacturers with real time detailed
inventory information via the Internet.
12
AmeriCold's customers consist primarily of national, regional and local
food manufacturers, distributors, retailers and food service organizations. A
breakdown of AmeriCold's largest customers includes:
PERCENTAGE OF
2004 REVENUE
-------------
H.J. Heinz Company 16.0%
ConAgra Foods, Inc. 11.3
Altria Group Inc. (Kraft Foods) 6.7
Sara Lee Corp. 5.0
Tyson Foods, Inc. 4.0
General Mills, Inc. 3.9
Schwan Corp. 3.4
McCain Foods, Inc. 3.2
Jack in the Box 1.6
J.R. Simplot Company 1.6
Other 43.3
----
TOTAL 100%
====
On November 18, 2004, Tony Schnug became Chief Executive Officer of
AmeriCold. Mr. Schnug is a partner of The Yucaipa Companies and was responsible
for conducting due diligence of potential acquisitions and oversees management
of portfolio companies on strategy and operational issues. Previously, Mr.
Schnug was an executive officer of Yucaipa portfolio companies including Fred
Meyer, Ralphs and Food 4 Less with responsibilities covering logistics,
manufacturing and construction.
COMPETITION
AmeriCold is the largest operator of temperature-controlled warehouse
space in North America. As a result, AmeriCold does not have any competitors of
comparable size. AmeriCold operates in an environment in which competition is
national, regional and local in nature and in which the range of service,
temperature-controlled logistics facilities, customer mix, service performance
and price are the principal competitive factors.
ITEM 2. PROPERTIES
We consider all of our Properties to be in good condition,
well-maintained, suitable and adequate to carry on our business.
OFFICE PROPERTIES
As of December 31, 2004, we owned or had an interest in 78 Office
Properties, located in 29 metropolitan submarkets in eight states, with an
aggregate of approximately 31.6 million net rentable square feet. Our Office
Properties are located primarily in the Dallas and Houston, Texas, metropolitan
areas. As of December 31, 2004, our Office Properties in Dallas and Houston
represented an aggregate of approximately 69% of our office portfolio based on
total net rentable square feet (30% for Dallas and 39% for Houston).
13
OFFICE PROPERTY TABLE(1)
The following table shows, as of December 31, 2004, certain information
about our Office Properties. In the table, "CBD" means central business
district.
WEIGHTED
AVERAGE
FULL-SERVICE
ECONOMIC RENTAL RATE PER OUR
NO. OF NET RENTABLE OCCUPANCY OCCUPIED SQ. OWNERSHIP
STATE, CITY, PROPERTY PROPERTIES SUBMARKET YEAR COMPLETED AREA (SQ.FT.) PERCENTAGE FT. (2) PERCENTAGE
- ---------------------------- ---------- ------------------- -------------- ------------- --------------- --------------- ----------
TEXAS
DALLAS
Bank One Center 1 CBD 1987 1,530,957 79.5% $ 22.07 50%
The Crescent 2 Uptown/Turtle Creek 1985 1,299,522 91.2 32.95 24
Fountain Place 1 CBD 1986 1,200,266 94.1 21.04 24
Trammell Crow Center 1 CBD 1984 1,128,331 93.6 24.92 24
Stemmons Place 1 Stemmons Freeway 1983 634,381 82.8 17.64 100
Spectrum Center 1 Quorum/Bent Tree 1983 598,250 73.8 20.38 100
Waterside Commons 1 Las Colinas 1986 458,906 71.0 17.80 100
125 E. John Carpenter
Freeway 1 Las Colinas 1982 446,031 82.6 21.04 100
The Aberdeen 1 Quorum/Bent Tree 1986 320,629 100.0 15.89 100
MacArthur Center I & II 1 Las Colinas 1982/1986 298,161 89.0 19.91 100
Stanford Corporate Centre 1 Quorum/Bent Tree 1985 274,684 95.5 21.14 100
Palisades Central II 1 Richardson 1985 237,731 95.2 20.29 100
3333 Lee Parkway 1 Uptown/Turtle Creek 1983 233,543 75.4 18.04 100
The Addison 1 Quorum/Bent Tree 1981 215,016 98.7 23.67 100
Palisades Central I 1 Richardson 1980 180,503 70.5 18.54 100
Greenway II 1 Richardson 1985 154,329 100.0 16.81 100
Greenway I & IA 2 Richardson 1983 146,704 49.4(3) 14.76 100
----- ----------- --------- --------- ---
Subtotal/Weighted Average 19 9,357,944 86.2% $ 22.62 62%
----- ----------- --------- --------- ---
FORT WORTH
Carter Burgess Plaza 1 CBD 1982 954,895 96.4% $ 18.39 100%
----- ---------- --------- -------- ---
HOUSTON
Greenway Plaza 10 Greenway Plaza 1969-1982 4,348,052 88.0% $ 20.69 100%
Houston Center 4 CBD 1974-1983 2,955,146 90.9 20.59 24
Post Oak Central 3 West Loop/Galleria 1974-1981 1,279,759 92.0 20.57 24
Five Houston Center 1 CBD 2002 580,875 94.9 30.45 25
Five Post Oak Park 1 West Loop/Galleria 1986 567,396 85.0 18.22 30
Four Westlake Park 1 Katy Freeway West 1992 561,065 99.6 22.75 20
BriarLake Plaza 1 Westchase 2000 502,410 96.3 24.18 30
Three Westlake Park 1 Katy Freeway West 1983 414,792 94.7 22.09 20
----- ----------- --------- -------- ---
Subtotal/Weighted Average 22 11,209,495 90.6% $ 21.40 54%
----- ----------- --------- -------- ---
AUSTIN
816 Congress (4) 1 CBD 1984 433,024 73.0%(3) $ 21.04 100%
301 Congress Avenue 1 CBD 1986 418,338 73.3 22.52 50
Bank One Tower 1 CBD 1974 389,503 95.9 23.56 20
Austin Centre 1 CBD 1986 343,664 75.4 20.28 100
100
The Avallon 3 Northwest 1993/1997 318,217 78.8 18.22
Barton Oaks Plaza One 1 Southwest 1986 98,955 59.8 24.04 100
----- ----------- --------- -------- ---
Subtotal/Weighted Average 8 2,001,701 78.2% $ 21.49 74%
----- ----------- --------- -------- ---
14
WEIGHTED
AVERAGE
FULL-SERVICE
ECONOMIC RENTAL RATE PER OUR
NO. OF YEAR NET RENTABLE OCCUPANCY OCCUPIED SQ. OWNERSHIP
STATE, CITY, PROPERTY PROPERTIES SUBMARKET COMPLETED AREA (SQ.FT.) PERCENTAGE FT. (2) PERCENTAGE
- ---------------------------- ---------- ------------------------ ---------- ------------- ------------ --------------- ----------
COLORADO
DENVER
Johns Manville Plaza 1 CBD 1978 675,400 93.6% $ 19.78 100%
707 17th Street 1 CBD 1982 550,805 87.4 21.03 100
Regency Plaza 1 Denver Technology Center 1985 309,862 82.9 20.18 100
55 Madison 1 Cherry Creek 1982 137,176 86.6 19.27 100
The Citadel 1 Cherry Creek 1987 130,652 95.7 25.24 100
44 Cook 1 Cherry Creek 1984 124,174 90.4 19.81 100
----- ----------- ------ ------- ---
Subtotal/Weighted Average 6 1,928,069 89.6% $ 20.54 100%
----- ----------- ------ ------- ---
COLORADO SPRINGS
Briargate Office and
Research Center 1 Colorado Springs 1988 260,046 68.2% $ 16.60 100%
----- ----------- ------ ------- ---
FLORIDA
MIAMI
Miami Center 1 CBD 1983 782,211 93.9% $ 30.34 40%
Datran Center 2 South Dade/Kendall 1986/1988 476,412 93.6 27.07 100
The BAC - Colonnade
Building 1 Coral Gables 1989 216,115 92.9 30.37 100
The Alhambra 2 Coral Gables 1961/1987 317,566 86.5 29.39 100
----- ----------- ------ ------- ---
Subtotal/Weighted Average 6 1,792,304 92.4% $ 29.31 74%
----- ----------- ------ ------- ---
ARIZONA
PHOENIX
Two Renaissance Square 1 Downtown/CBD 1990 476,373 84.9% $ 23.94 100%
----- ----------- ------ ------- ---
CALIFORNIA
SAN DIEGO
Chancellor Park 1 University Town Centre 1988 195,733 82.4% $ 28.55 100%
----- ----------- ------ ------- ---
IRVINE
Dupont Centre 1 John Wayne Airport 1986 250,782 89.6% $ 27.52 100%
----- ----------- ------ ------- ---
NEVADA
LAS VEGAS
Hughes Center (5) 8 Central East 1986 - 1999 1,110,890 97.7% $ 30.89 98%
----- ----------- ------ ------- ---
PORTFOLIO EXCLUDING
PROPERTIES HELD FOR SALE AND
PROPERTIES NOT STABILIZED 74 29,538,232 88.5%(3) $ 22.63(6) 67%
===== =========== ====== ======= ===
PROPERTIES HELD FOR SALE
NEW MEXICO
ALBUQUERQUE
Albuquerque Plaza (7) 1 CBD 1990 366,236 84.5% $ 18.96 100%
----- ----------- ------ ------- ---
PROPERTIES NOT STABILIZED
TEXAS
HOUSTON
1301 McKinney St.(8) 1 CBD 1982 1,247,061 48.1% $ 21.21 100%
----- ----------- ------ ------- ---
COLORADO
DENVER
Peakview Tower (8) 1 Greenwood Village 2001 264,149 75.0% $ 23.22 100%
----- ----------- ------ ------- ---
GEORGIA
ATLANTA
One Live Oak (8) 1 Buckhead 1981 201,488 68.1% $ 23.13 100%
----- ----------- ------ ------- ---
TOTAL PORTFOLIO 78 31,617,166 69%
===== =========== ===
- ------------------
(1) Office Property Table data is presented without adjustments to give effect
to our actual ownership percentage in joint ventured properties.
(2) Calculated in accordance with GAAP based on base rent payable as of
December 31, 2004, giving effect to free rent and scheduled rent increases
and including adjustments for expenses payable by or reimbursable from
customers.
15
(3) Leases have been executed at certain Office Properties but had not commenced
as of December 31, 2004. If such leases had commenced as of December 31,
2004, the percent leased for Office Properties excluding held for sale
properties would have been 89.8%. Properties whose percent leased exceeds
economic occupancy by 5 percentage points or more are as follows: Greenway I
& IA - 58.4% and 816 Congress - 78.6%.
(4) 816 Congress was formerly known as Frost Bank Plaza.
(5) Hughes Center consists of seven wholly-owned office properties and one joint
ventured office property in which we own a 67% general partner interest.
(6) The weighted average full-service cash rental rate per square foot
calculated based on base rent payable for Office Properties excluding held
for sale properties as of December 31, 2004, without giving effect to free
rent and scheduled rent increases that are taken into consideration under
GAAP but including adjustment for expenses paid by or reimbursed from
customers, is $21.89.
(7) We completed the disposition of Albuquerque Plaza in February 2005.
(8) Property statistics exclude 1301 McKinney Street (acquired December 21,
2004), Peakview Tower (acquired December 29, 2004) and One Live Oak
(acquired December 15, 2004). These office properties will be included in
portfolio statistics once stabilized. Stabilization is deemed to occur upon
the earlier of (a) achieving 90% occupancy or (b) one year following the
acquisition date.
The following table shows, as of December 31, 2004, the principal
businesses conducted by the tenants at our Office Properties, based on
information supplied to us from the tenants. Based on rental revenues from
office leases in effect as of December 31, 2004, no single tenant
accounted for more than 6% of our total Office Segment revenues for 2004.
Percent of
Industry Sector Leased Sq. Ft.
- ------------------------- ----------------
Professional Services (1) 32%
Financial Services (2) 21
Energy(3) 19
Technology 5
Telecommunications 4
Manufacturing 3
Food Service 3
Government 3
Retail 2
Medical 2
Other (4) 6
---
TOTAL LEASED 100%
===
- ------------------
(1) Includes legal, accounting, engineering, architectural and advertising
services.
(2) Includes banking, title and insurance and investment services.
(3) Includes oil and gas and utility companies.
(4) Includes construction, real estate and other industries.
AGGREGATE LEASE EXPIRATIONS OF OFFICE PROPERTIES
The following tables show schedules of lease expirations for leases in
place as of December 31, 2004, for our total Office Properties and for Dallas,
Houston and Austin, Texas; Denver, Colorado; Miami, Florida and Las Vegas,
Nevada, individually, for each of the 10 years beginning 2005.
16
TOTAL OFFICE PROPERTIES(1)
SQUARE SQUARE
FOOTAGE FOOTAGE ANNUAL NUMBER
OF SIGNED OF ANNUAL PERCENTAGE EXPIRING OF
EXPIRING RENEWALS EXPIRING PERCENTAGE FULL-SERVICE OF ANNUAL PER SQUARE CUSTOMERS
LEASES OF LEASES OF SQUARE RENT UNDER FULL-SERVICE FOOTAGE WITH
YEAR OF LEASE (BEFORE EXPIRING (AFTER FOOTAGE EXPIRING RENT FULL-SERVICE EXPIRING
EXPIRATION RENEWALS) LEASES (2) RENEWALS) EXPIRING LEASES (3) EXPIRING RENT(3) LEASES
- ------------- ---------- ----------- ---------- ---------- ------------- ------------ ------------ ---------
2005 4,018,746 (4) (1,259,578) 2,759,168 (4)(5) 10.7% $ 60,347,813 10.3% $ 21.87 461
2006 2,539,559 (301,283) 2,238,276 (6) 8.7 55,145,138 9.4 24.64 296
2007 2,739,463 76,435 2,815,898 10.9 63,713,617 10.9 22.63 281
2008 1,934,875 33,603 1,968,478 7.6 44,547,182 7.6 22.63 226
2009 2,487,870 48,117 2,535,987 9.8 57,735,181 9.9 22.77 226
2010 2,095,934 420,497 2,516,431 9.7 58,775,551 10.1 23.36 134
2011 1,438,847 14,789 1,453,636 5.6 34,718,839 5.9 23.88 63
2012 1,165,786 66,788 1,232,574 4.8 30,668,203 5.3 24.88 48
2013 1,446,151 93,344 1,539,495 6.0 33,852,852 5.8 21.99 43
2014 2,858,279 137,013 2,995,292 11.6 60,795,889 10.4 20.30 47
2015 and
thereafter 3,147,209 670,275 3,817,484 14.6 83,670,579 14.4 21.92 65
---------- ----------- ---------- ---------- ------------- -------- ----------- ------
Total 25,872,719 - 25,872,719 (7) 100.0% $ 583,970,844 100.0% $ 22.57 1,890
========== =========== ========== ========== ============= ======== =========== ======
- ------------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties. Excludes held for sale
properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end of
the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewals), giving effect to free rent and
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based on
current expense levels.
(4) As of December 31, 2004, leases totaling 1,497,682 square feet (including
renewals of 1,259,578 square feet and new leases of 238,104 square feet)
have been signed and will commence during 2005. These signed leases
represent approximately 37% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 859,269 square feet Q2: 853,232
square feet Q3: 568,988 square feet Q4: 477,679 square feet.
(6) Expirations by quarter are as follows: Q1: 540,479 square feet Q2: 488,865
square feet Q3: 505,485 square feet Q4: 703,447 square feet.
(7) Reconciliation of Occupied Square Feet to Net Rentable Area:
SQUARE FEET
-----------
Occupied Square Footage, per 10 Year Expiration Report: 25,872,719
Non-revenue Generating Space: 275,504
-----------
Total Occupied Office Square Footage: 26,148,223
Total Vacant Square Footage: 3,390,009
-----------
Total Office Net Rentable Area: 29,538,232
===========
DALLAS OFFICE PROPERTIES(1)
SQUARE SQUARE
FOOTAGE FOOTAGE ANNUAL NUMBER
OF SIGNED OF ANNUAL PERCENTAGE EXPIRING OF
EXPIRING RENEWALS EXPIRING PERCENTAGE FULL-SERVICE OF ANNUAL PER SQUARE CUSTOMERS
LEASES OF LEASES OF SQUARE RENT UNDER FULL-SERVICE FOOTAGE WITH
YEAR OF LEASE (BEFORE EXPIRING (AFTER FOOTAGE EXPIRING RENT FULL-SERVICE EXPIRING
EXPIRATION RENEWALS) LEASES (2) RENEWALS) EXPIRING LEASES (3) EXPIRING RENT(3) LEASES
- ------------- ---------- ----------- ---------- ---------- ------------- ------------ ------------ ---------
2005 1,607,787 (4) (736,163) 871,624 (4)(5) 10.9% $ 18,509,275 10.4% $ 21.24 121
2006 563,269 (8,963) 554,306 (6) 6.9 13,839,468 7.7 24.97 54
2007 822,112 112,771 934,883 11.7 21,449,731 12.0 22.94 57
2008 493,335 16,140 509,475 6.4 11,448,312 6.4 22.47 58
2009 432,917 3,797 436,714 5.5 11,485,245 6.4 26.30 40
2010 716,402 231,985 948,387 11.9 23,360,283 13.1 24.63 34
2011 431,838 11,664 443,502 5.5 10,431,664 5.8 23.52 17
2012 288,698 4,485 293,183 3.7 5,942,177 3.3 20.27 18
2013 252,305 130,066 382,371 4.8 8,513,851 4.8 22.27 12
2014 743,673 - 743,673 9.3 16,069,375 9.0 21.61 14
2015 and
thereafter 1,640,574 234,218 1,874,792 23.4 37,738,399 21.1 20.13 23
Total 7,992,910 - 7,992,910 100.0% $178,787,780 100.0% $ 22.37 448
========== ========= ========== ======= ============ ====== ========= ====
- -----------------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end of
the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewals), giving effect to free rent and
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based on
current expense levels.
(4) As of December 31, 2004, leases totaling 854,034 square feet (including
renewals of 736,163 square feet and new leases of 117,871 square feet) have
been signed and will commence during 2005. These signed leases represent
approximately 53% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 242,092 square feet Q2: 185,443
square feet Q3: 287,116 square feet Q4: 156,973 square feet.
(6) Expirations by quarter are as follows: Q1: 178,876 square feet Q2: 169,727
square feet Q3: 165,230 square feet Q4: 40,473 square feet.
17
HOUSTON OFFICE PROPERTIES (1)
SQUARE SQUARE
FOOTAGE FOOTAGE ANNUAL NUMBER
OF SIGNED OF ANNUAL PERCENTAGE EXPIRING OF
EXPIRING RENEWALS EXPIRING PERCENTAGE FULL-SERVICE OF ANNUAL PER SQUARE CUSTOMERS
LEASES OF LEASES OF SQUARE RENT UNDER FULL-SERVICE FOOTAGE WITH
YEAR OF LEASE (BEFORE EXPIRING (AFTER FOOTAGE EXPIRING RENT FULL-SERVICE EXPIRING
EXPIRATION RENEWALS) LEASES (2) RENEWALS) EXPIRING LEASES (3) EXPIRING RENT(3) LEASES
- ------------- ---------- ----------- ---------- ---------- ------------- ------------ ------------ ---------
2005 946,093 (4) (273,066) 673,027 (4)(5) 6.7% $ 12,499,178 5.8% $ 18.63 161
2006 1,069,805 (228,259) 841,546 (6) 8.4 18,095,454 8.4 21.50 95
2007 1,167,054 (26,188) 1,140,866 11.3 23,637,226 11.0 20.72 87
2008 920,793 (10,177) 910,616 9.0 18,323,643 8.5 20.12 78
2009 1,005,511 4,836 1,010,347 10.0 19,471,578 9.1 19.27 71
2010 856,119 171,959 1,028,078 10.2 21,960,170 10.2 21.36 53
2011 692,079 300 692,379 6.9 15,242,281 7.1 22.01 23
2012 546,773 43,898 590,671 5.9 15,079,960 7.0 25.53 17
2013 477,800 (960) 476,840 4.7 11,640,875 5.4 24.41 12
2014 1,317,353 51,264 1,368,617 13.6 26,724,035 12.5 19.53 14
2015 and
thereafter 1,064,938 266,393 1,331,331 13.3 31,927,702 15.0 23.98 16
---------- --------- ---------- ----- ------------- ------- --------- ------
Total 10,064,318 - 10,064,318 100.0% $ 214,602,102 100.0% $ 21.33 627
========== ========= ========== ===== ============= ======= ========= ======
- ----------------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end of
the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewals), giving effect to free rent or
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based on
current expense levels.
(4) As of December 31, 2004, leases totaling 313,700 square feet (including
renewals of 273,066 square feet and new leases of 40,634 square feet) have
been signed and will commence during 2005. These signed leases represent
approximately 33% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 307,477 square feet Q2: 159,088
square feet Q3: 62,527 square feet Q4: 143,935 square feet.
(6) Expirations by quarter are as follows: Q1: 89,986 square feet Q2: 135,073
square feet Q3: 135,965 square feet Q4: 480,522 square feet.
AUSTIN OFFICE PROPERTIES (1)
SQUARE SQUARE
FOOTAGE FOOTAGE ANNUAL NUMBER
OF SIGNED OF ANNUAL PERCENTAGE EXPIRING OF
EXPIRING RENEWALS EXPIRING PERCENTAGE FULL-SERVICE OF ANNUAL PER SQUARE CUSTOMERS
LEASES OF LEASES OF SQUARE RENT UNDER FULL-SERVICE FOOTAGE WITH
YEAR OF LEASE (BEFORE EXPIRING (AFTER FOOTAGE EXPIRING RENT FULL-SERVICE EXPIRING
EXPIRATION RENEWALS) LEASES (2) RENEWALS) EXPIRING LEASES (3) EXPIRING RENT(3) LEASES
- ------------- ---------- ----------- ---------- ---------- ------------- ------------ ------------ ---------
2005 543,129(4) (46,104) 497,025(4)(5) 32.9% $ 11,074,450 33.9% $ 22.28 39
2006 182,458 (20,004) 162,454(6) 10.7 4,567,801 14.0 28.12 22
2007 87,781 - 87,781 5.8 2,124,806 6.5 24.12 19
2008 66,785 21,627 88,412 5.8 1,880,276 5.8 21.27 17
2009 141,810 - 141,810 9.4 2,960,701 9.1 20.88 17
2010 133,011 3,820 136,831 9.0 2,306,692 7.1 16.86 17
2011 19,302 - 19,302 1.3 325,185 1.0 16.85 4
2012 7,278 - 7,278 0.5 123,055 0.4 16.91 1
2013 11,604 - 11,604 0.8 259,977 0.8 22.40 1
2014 241,570 - 241,570 16.0 4,753,138 14.6 19.68 4
2015 and
thereafter 78,069 40,661 118,730 7.8 2,267,539 6.8 19.10 9
--------- ---------- ---------- ------ ------------ ------- -------- -----
Total 1,512,797 - 1,512,797 100.0% $ 32,643,620 100.0% $ 21.58 150
========= ========== ========== ====== ============ ======= ======== =====
- --------------------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end of
the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewals), giving effect to free rent or
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based on
current expense levels.
(4) As of December 31, 2004, leases totaling 68,541 square feet (including
renewals of 46,104 square feet and new leases of 22,437 square feet) have
been signed and will commence during 2005. These signed leases represent
approximately 13% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 89,222 square feet Q2: 358,196
square feet Q3: 17,033 square feet Q4: 32,574 square feet.
(6) Expirations by quarter are as follows: Q1: 92,831 square feet Q2: 36,126
square feet Q3: 14,368 square feet Q4: 19,129 square feet.
18
DENVER OFFICE PROPERTIES (1)
ANNUAL FULL- PERCENTAGE OF
YEAR OF SQUARE FOOTAGE SIGNED RENEWALS SQUARE FOOTAGE PERCENTAGE SERVICE RENT ANNUAL
LEASE OF EXPIRING LEASES OF EXPIRING LEASES OF EXPIRING LEASES OF SQUARE FOOTAGE UNDER EXPIRING FULL-SERVICE
EXPIRATION (BEFORE RENEWALS) (2) (AFTER RENEWALS) EXPIRING LEASES (3) RENT EXPIRING
- ---------- ------------------ ------------------ ------------------- ----------------- ------------ -------------
2005 111,378 (4) (3,147) 108,231 (4) (5) 6.3% $ 2,429,559 6.9%
2006 101,052 (2,036) 99,016 (6) 5.8 2,491,238 7.1
2007 137,380 - 137,380 8.0 2,964,855 8.4
2008 101,899 (495) 101,404 5.9 2,058,116 5.8
2009 314,655 (12,208) 302,447 17.6 6,432,115 18.2
2010 129,283 - 129,283 7.5 2,881,425 8.2
2011 48,310 - 48,310 2.8 910,457 2.6
2012 89,005 17,886 106,891 6.2 2,432,213 6.9
2013 160,009 (86,709) 73,300 4.3 1,427,502 4.0
2014 344,885 86,709 431,594 25.2 8,253,439 23.4
2015 and
thereafter 176,578 - 176,578 10.4 3,024,976 8.5
--------- ------- --------- ----- ------------ -----
Total 1,714,434 - 1,714,434 100.0% $ 35,305,895 100.0%
========= ======= ========= ===== ============ =====
ANNUAL EXPIRING NUMBER
YEAR OF PER SQUARE FOOTAGE OF CUSTOMERS WITH
LEASE FULL-SERVICE EXPIRING
EXPIRATION RENT(3) LEASES
- ---------- ------------------ -----------------
2005 $ 22.45 22
2006 25.16 19
2007 21.58 24
2008 20.30 15
2009 21.27 23
2010 22.29 7
2011 18.85 5
2012 22.75 3
2013 19.47 5
2014 19.12 4
2015 and
thereafter 17.13 6
----------- ---
Total $ 20.59 133
=========== ===
- ------------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end
of the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewal), giving effect to free rent or
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based
on current expense levels.
(4) As of December 31, 2004, leases totaling 29,051 square feet (including
renewals of 3,147 square feet and new leases of 25,904 square feet) have
been signed and will commence during 2005. These signed leases represent
approximately 26% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 84,072 square feet Q2: 5,911
square feet Q3: 13,956 square feet Q4: 4,292 square feet.
(6) Expirations by quarter are as follows: Q1: 30,371 square feet Q2: 22,869
square feet Q3: 45,776 square feet Q4: None.
MIAMI OFFICE PROPERTIES (1)
ANNUAL FULL
SQUARE FOOTAGE SIGNED RENEWALS SQUARE FOOTAGE PERCENTAGE SERVICE RENT PERCENTAGE OF
YEAR OF LEASE OF EXPIRING LEASES OF EXPIRING LEASES OF EXPIRING LEASES OF SQUARE FOOTAGE UNDER EXPIRING ANNUAL FULL-SERVICE
EXPIRATION (BEFORE RENEWALS) (2) (AFTER RENEWALS) EXPIRING LEASES (3) RENT EXPIRING
- ------------- ------------------ ------------------ ------------------ ----------------- -------------- -------------------
2005 298,831 (4) (87,397) 211,434 (4)(5) 12.8% $ 5,999,117 12.2%
2006 173,875 10,037 183,912 (6) 11.1 5,366,608 10.9
2007 185,374 (20,079) 165,295 10.0 4,551,250 9.3
2008 122,471 13,659 136,130 8.3 4,188,186 8.5
2009 309,264 12,391 321,655 19.5 9,073,007 18.5
2010 197,177 11,433 208,610 12.6 6,305,265 12.8
2011 82,608 - 82,608 5.0 2,900,993 5.9
2012 142,887 - 142,887 8.7 4,822,107 9.8
2013 47,684 - 47,684 2.9 1,500,314 3.1
2014 36,952 - 36,952 2.2 1,039,717 2.1
2015 and
thereafter 52,402 59,956 112,358 6.9 3,420,368 6.9
--------- -------- --------- ----- -------------- -----
Total 1,649,525 - 1,649,525 100.0% $ 49,166,932 100.0%
========= ======== ========= ===== ============== =====
NUMBER
ANNUAL EXPIRING PER OF CUSTOMERS WITH
YEAR OF LEASE SQUARE FOOTAGE EXPIRING
EXPIRATION FULL-SERVICE RENT(3) LEASES
- ------------- -------------------- ------------------
2005 $ 28.37 56
2006 29.18 41
2007 27.53 38
2008 30.77 27
2009 28.21 37
2010 30.23 14
2011 35.12 4
2012 33.75 5
2013 31.46 4
2014 28.14 2
2015 and
thereafter 30.44 6
--------- ---
Total $ 29.81 234
========= ===
- ------------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end
of the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewals), giving effect to free rent or
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based
on current expense levels.
(4) As of December 31, 2004, leases totaling 106,560 square feet (including
renewals of 87,397 square feet and new leases of 19,163 square feet) have
been signed and will commence during 2005. These signed leases represent
approximately 36% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 56,415 square feet Q2: 44,147
square feet Q3: 70,616 square feet Q4: 40,256 square feet.
(6) Expirations by quarter are as follows: Q1: 35,503 square feet Q2: 25,099
square feet Q3: 28,701 square feet Q4: 94,609 square feet.
19
LAS VEGAS OFFICE PROPERTIES (1)
ANNUAL
FULL-SERVICE PERCENTAGE OF
SQUARE FOOTAGE SIGNED RENEWALS SQUARE FOOTAGE PERCENTAGE RENT UNDER ANNUAL
YEAR OF LEASE OF EXPIRING LEASES OF EXPIRING LEASES OF EXPIRING LEASES OF SQUARE FOOTAGE EXPIRING FULL-SERVICE RENT
EXPIRATION (BEFORE RENEWALS) (2) (AFTER RENEWALS EXPIRING LEASES (3) EXPIRING
- ------------- ------------------ ------------------ ------------------ ----------------- ------------ -----------------
2005 263,527 (4) (61,460) 202,067 (4)(5) 18.7% $ 5,962,078 17.8%
2006 203,609 - 203,609 (6) 18.8 6,134,333 18.3
2007 110,598 9,931 120,529 11.2 3,566,248 10.6
2008 160,703 8,473 169,176 15.7 5,255,285 15.7
2009 127,085 - 127,085 11.8 4,069,287 12.1
2010 52,101 - 52,101 4.8 1,658,818 4.9
2011 98,108 2,825 100,933 9.3 3,541,153 10.6
2012 26,134 - 26,134 2.4 848,665 2.5
2013 19,580 - 19,580 1.8 649,533 1.9
2014 19,295 - 19,295 1.8 592,589 1.8
2015 and
thereafter - 40,231 40,231 3.7 1,270,541 3.8
--------- ------ --------- ----- ------------ -----
Total 1,080,740 - 1,080,740 100.0% $ 33,548,530 100.0%
========= ====== ========= ===== ============ =====
NUMBER OF
ANNUAL EXPIRING PER CUSTOMERS WITH
YEAR OF LEASE SQUARE FOOTAGE EXPIRING
EXPIRATION FULL-SERVICE RENT(3) LEASES
- ------------- -------------------- -----------------
2005 $ 29.51 25
2006 30.13 35
2007 29.59 25
2008 31.06 20
2009 32.02 16
2010 31.84 5
2011 35.08 4
2012 32.47 2
2013 33.17 2
2014 30.71 2
2015 and
thereafter 31.58 1
----------- ---
Total $ 31.04 137
=========== ===
- ------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end
of the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewals), giving effect to free rent or
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based
on current expense levels.
(4) As of December 31, 2004, leases totaling 64,389 square feet (including
renewals of 61,460 feet and new leases of 2,929 square feet) have been
signed and will commence during 2005. These signed leases represent
approximately 24% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 22,478 square feet Q2: 12,948
square feet Q3: 103,265 square feet Q4: 63,376 square feet.
(6) Expirations by quarter are as follows: Q1: 40,699 square feet Q2: 47,134
square feet Q3: 47,062 square feet Q4: 68,714 square feet.
OTHER OFFICE PROPERTIES (1)
ANNUAL
FULL-SERVICE PERCENTAGE OF
SQUARE FOOTAGE SIGNED RENEWALS SQUARE FOOTAGE PERCENTAGE RENT UNDER ANNUAL
YEAR OF LEASE OF EXPIRING LEASES OF EXPIRING LEASES OF EXPIRING LEASES OF SQUARE FOOTAGE EXPIRING FULL-SERVICE RENT
EXPIRATION (BEFORE RENEWALS) (2) (AFTER RENEWALS EXPIRING LEASES (3) EXPIRING
- ------------- ------------------ ------------------ ------------------ ----------------- ------------ -----------------
2005 248,001 (4) (52,241) 195,760 (4)(5) 10.5% $ 3,874,156 9.7%
2006 245,491 (52,058) 193,433 (6) 10.4 4,650,236 11.7
2007 229,164 - 229,164 12.3 5,419,501 13.6
2008 68,889 (15,624) 53,265 2.9 1,393,364 3.5
2009 156,628 39,301 195,929 10.6 4,243,248 10.6
2010 11,841 1,300 13,141 0.7 302,898 0.8
2011 66,602 - 66,602 3.6 1,367,106 3.4
2012 65,011 519 65,530 3.5 1,420,026 3.6
2013 477,169 50,947 528,116 28.4 9,860,800 24.7
2014 154,551 (960) 153,591 8.3 3,363,596 8.4
2015 and
thereafter 134,648 28,816 163,464 8.8 4,021,054 10.0
--------- ------- --------- ----- ------------ -----
Total 1,857,995 - 1,857,995 100.0% $ 39,915,985 100.0%
========= ======= ========= ===== ============ =====
NUMBER
ANNUAL EXPIRING PER OF CUSTOMERS WITH
YEAR OF LEASE SQUARE FOOTAGE EXPIRING
EXPIRATION FULL-SERVICE RENT(3) LEASES
- ------------- -------------------- -----------------
2005 $ 19.79 37
2006 24.04 30
2007 23.65 31
2008 26.16 11
2009 21.66 22
2010 23.05 4
2011 20.53 6
2012 21.67 2
2013 18.67 7
2014 21.90 7
2015 and
thereafter 24.60 4
-------- ---
Total $ 21.48 161
======== ===
- ------------------------
(1) Lease expiration data is presented without giving effect to our actual
ownership percentage in joint ventured properties. Includes Ft. Worth,
Colorado Springs, Phoenix, San Diego and Irvine. Excludes held for sale
properties.
(2) Signed renewals extend the expiration dates of in-place leases to the end
of the renewed term.
(3) Calculated based on base rent payable under the lease for net rentable
square feet expiring (after renewals), giving effect to free rent or
scheduled rent increases taken into account under GAAP and including
adjustments for expenses payable by or reimbursable from customers based
on current expense levels.
(4) As of December 31, 2004, leases totaling 61,407 square feet (including
renewals of 52,241 feet and new leases of 9,166 square feet) have been
signed and will commence during 2005. These signed leases represent
approximately 24% of gross square footage expiring during 2005.
(5) Expirations by quarter are as follows: Q1: 57,513 square feet Q2: 87,499
square feet Q3: 14,475 square feet Q4: 36,273 square feet.
(6) Expirations by quarter are as follows: Q1: 72,213 square feet Q2: 52,837
square feet Q3: 68,383 square feet Q4: None.
20
RESORT/HOTEL PROPERTIES(1)
The following table shows certain information for the years ended December
31, 2004 and 2003, with respect to our Resort/Hotel Properties. The information
for the Resort/Hotel Properties is based on available rooms, except for Canyon
Ranch-Tucson and Canyon Ranch-Lenox, which measure their performance based on
available guest nights.
YEAR
COMPLETED/
RESORT/HOTEL PROPERTY (2) LOCATION RENOVATED ROOMS
- ------------------------- ----------- ------------------- -----
OPERATING PROPERTIES
UPSCALE BUSINESS CLASS HOTELS:
Omni Austin Hotel(3) Austin, TX 1986 375
Renaissance Houston Hotel Houston, TX 1975/2000 388
-----
TOTAL/WEIGHTED AVERAGE 763
=====
LUXURY RESORTS AND SPAS:
Park Hyatt Beaver Creek Resort and Spa Avon, CO 1989/2001 275
Fairmont Sonoma Mission Inn & Spa(4) Sonoma, CA 1927/1987/1997/2004 228
Ventana Inn & Spa Big Sur, CA 1975/1982/1988 62
-----
TOTAL/WEIGHTED AVERAGE 565
=====
GUEST
DESTINATION FITNESS RESORTS AND SPAS: (5) NIGHTS
------
Canyon Ranch-Tucson Tucson, AZ 1980 259(6)
Canyon Ranch-Lenox Lenox, MA 1989 212(6)
-----
TOTAL/WEIGHTED AVERAGE 471
=====
LUXURY AND DESTINATION FITNESS RESORTS COMBINED
TOTAL/WEIGHTED AVERAGE FOR RESORT/HOTEL
PROPERTIES EXCLUDING HELD FOR SALE PROPERTIES 1,799
=====
HELD FOR SALE PROPERTIES
UPSCALE BUSINESS CLASS HOTELS:
Denver Marriott City Center Denver, CO 1982/1994 613
-----
TOTAL/WEIGHTED AVERAGE FOR HELD FOR
SALE RESORT/HOTEL PROPERTIES
613
=====
GRAND TOTAL/WEIGHTED AVERAGE FOR
RESORT/HOTEL PROPERTIES 2,412
=====
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------
REVENUE
AVERAGE AVERAGE PER
OCCUPANCY DAILY AVAILABLE
RATE RATE ROOM/GUEST NIGHT
----------------------------------------------
RESORT/HOTEL PROPERTY (2) 2004 2003 2004 2003 2004 2003
- ------------------------- ---- ---- ------ ------ ------ ------
OPERATING PROPERTIES
UPSCALE BUSINESS CLASS HOTELS:
Omni Austin Hotel(3) 73% 75% $ 114 $ 113 $ 83 $ 84
Renaissance Houston Hotel 61 62 103 108 63 67
-- -- ------ ------ ------ ------
TOTAL/WEIGHTED AVERAGE 67% 68% $ 109 $ 111 $ 73 $ 76
== == ====== ====== ====== ======
LUXURY RESORTS AND SPAS:
Park Hyatt Beaver Creek Resort and Spa 60% 60% $ 277 $ 278 $ 167 $ 166
Fairmont Sonoma Mission Inn & Spa(4) 59 61 253 245 149 150
Ventana Inn & Spa 64 75 430 412 274 309
-- -- ------ ------ ------ ------
TOTAL/WEIGHTED AVERAGE 60% 62% $ 285 $ 282 $ 171 $ 174
== == ====== ====== ====== ======
DESTINATION FITNESS RESORTS AND SPAS: (5)
Canyon Ranch-Tucson
Canyon Ranch-Lenox
-- -- ------ ------ ------ ------
TOTAL/WEIGHTED AVERAGE 79% 76% $ 713 $ 661 $ 521 $ 475
== == ====== ====== ====== ======
LUXURY AND DESTINATION FITNESS RESORTS COMBINED 69% 68% $ 501 $ 469 $ 331 $ 311
== == ====== ====== ====== ======
TOTAL/WEIGHTED AVERAGE FOR RESORT/HOTEL
PROPERTIES EXCLUDING HELD FOR SALE PROPERTIES 68% 68% $ 333 $ 314 $ 221 $ 211
== == ====== ====== ====== ======
HELD FOR SALE PROPERTIES
UPSCALE BUSINESS CLASS HOTELS:
Denver Marriott City Center 72% 73% $ 124 $ 128 $ 90 $ 93
-- -- ------ ------ ------ ------
TOTAL/WEIGHTED AVERAGE FOR HELD FOR
SALE RESORT/HOTEL PROPERTIES 72% 73% $ 124 $ 128 $ 90 $ 93
== == ====== ====== ====== ======
GRAND TOTAL/WEIGHTED AVERAGE FOR
RESORT/HOTEL PROPERTIES 69% 70% $ 277 $ 264 $ 188 $ 181
== == ====== ====== ====== ======
- ----------
(1) Resort/Hotel Property Table is presented at 100% without any adjustment to
give effect to our actual ownership in Resort/Hotel Properties.
(2) We have entered into agreements with Ritz-Carlton Hotel Company, L.L.C to
develop the Ritz-Carlton hotel and residence project in Dallas, Texas upon
reaching a specified level of pre-sales for the residences. The
development plans include a Ritz-Carlton with approximately 216 hotel
rooms and 70 residences. Construction on the development is anticipated to
begin in the second quarter of 2005.
(3) The Omni Austin Hotel is leased pursuant to a lease to HCD Austin
Corporation.
(4) We have an 80.1% member interest in the limited liability company that
owns Fairmont Sonoma Mission Inn & Spa. Renovation of 97 historic inn
rooms began in November 2003, at which time those rooms were removed from
service. Total cost of the renovation was approximately $12.1 million and
was completed in July 2004.
(5) On January 18, 2005, we contributed the Canyon Ranch-Tucson and Canyon
Ranch-Lenox properties to a newly formed entity, CR Operating LLC, for a
48% common member interest in that entity. The remaining 52% of CR
Operating LLC is owned by the founders of Canyon Ranch.
(6) Represents available guest nights, which is the maximum number of guests
the resort can accommodate per night.
21
RESIDENTIAL DEVELOPMENT PROPERTIES
The following table shows certain information as of December 31, 2004, relating
to the Residential Development Properties.
PLANNED
OUR SALES CLOSED
PREFERRED LOTS/ LOTS/
RETURN / PRODUCT UNITS/ UNITS/
CORPORATION / PROJECT LOCATION OWNERSHIP(1) TYPE (2) ACRES ACRES
- --------------------------------- ---------------- ----------- ------------ ------- ------
DESERT MOUNTAIN DEVELOPMENT CORP.
Desert Mountain (4) Scottsdale, AZ 93% SF, TH(B) 2,483 2,360
CRESCENT RESORT DEVELOPMENT INC.
TAHOE MOUNTAIN RESORTS
Northstar - Iron Horse and
Great Bear Lake Tahoe, CA 13% / 57%(5) CO(S) 100 0
Northstar - Remaining Phases Lake Tahoe, CA 13% / 57%(5) CO, TH, TS(S) 1,700 0
Old Greenwood-Lots Lake Tahoe, CA 13% / 71% SF(B) 100 96
Old Greenwood-Units Lake Tahoe, CA 13% / 71% TH, TS(S) 165 12.9
Gray's Crossing Lake Tahoe, CA 13% / 71% SF(B) 445 101
DENVER DEVELOPMENT
Creekside I at Riverfront Park Denver, CO 12% / 64% CO(P) 40 39
Creekside II at Riverfront Park Denver, CO 12% / 64% CO(P) 40 0
Creekside Townhomes at
Riverfront Park Denver, CO 12% / 64% TH(P) 23 0
Brownstones (Phase I) Denver, CO 12% / 64% TH(P) 16 0
Delgany Denver, CO 12% / 64% CO(P) 44 0
Riverfront Park Denver, CO 12% / 64% CO, TH(P) 215 0
Downtown Acreage Denver, CO 12% / 64% ACR 22.5 10.8
MOUNTAIN AND OTHER DEVELOPMENT
Horizon Pass Lodge Bachelor Gulch, 12% / 64% CO(S) 30 25
CO
Hummingbird Bachelor Gulch, 12% / 64% CO(S) 40 0
CO
Eagle Ranch Eagle, CO 12% / 60% SF(P) 1,438 791
Main Street Station Vacation Club Breckenridge, CO 12% / 30%(5) TS(P) 42 28.3
Riverbend Charlotte, NC 12% / 60% SF(P) 650 393
Three Peaks Sliverthorne, CO 12% / 30%(5) SF(S) 292 217
Identified Future Projects Colorado 12% / 64% CO, TH(S) 173 0
HOUSTON AREA DEVELOPMENT CORP.
Falcon Point Houston, TX 98% SF(P) 527 509
Spring Lakes Houston, TX 98% SF(P) 508 423
CRESCENT PLAZA RESIDENTIAL
The Residences at the
Ritz-Carlton Dallas, TX 100% CO(P) 70 0
AVERAGE PROPOSED
SALES AVERAGE
PHYSICAL CRPRICE SALES PRICE
REMAINING INVENTORY ON CLOSED ON REMAINING
LOTS/UNITS/ LOTS/UNITS/ LOTS/UNITS/ LOTS/UNITS/
CORPORATION / PROJECT ACRES ACRES ACRES(3) ACRES
- --------------------------------- ----------- ----------- ----------- ------------
DESERT MOUNTAIN DEVELOPMENT CORP.
Desert Mountain (4) 123 36 $ 551 $ 1,150
CRESCENT RESORT DEVELOPMENT INC.
TAHOE MOUNTAIN RESORTS
Northstar - Iron Horse and
Great Bear 100 0 N/A 1,410
Northstar - Remaining Phases 1,700 0 N/A 1,730
Old Greenwood-Lots 4 4 330 795
Old Greenwood-Units 152.1 4.3 1,870 1,884
Gray's Crossing 344 0 270 420
DENVER DEVELOPMENT
Creekside I at Riverfront Park 1 1 330 390
Creekside II at Riverfront Park 40 0 N/A 370
Creekside Townhomes at
Riverfront Park 23 0 N/A 750
Brownstones (Phase I) 16 0 N/A 1,740
Delgany 44 0 N/A 640
Riverfront Park 215 0 N/A 560
Downtown Acreage 11.7 11.7 1,980 3,660
MOUNTAIN AND OTHER DEVELOPMENT
Horizon Pass Lodge 5 5 2,200 2,970
Hummingbird 40 0 N/A 2,380
Eagle Ranch 647 115 80 110
Main Street Station Vacation Club 13.7 13.7 1,200 1,070
Riverbend 257 63 30 40
Three Peaks 75 75 240 270
Identified Future Projects 173 0 N/A 1,790
HOUSTON AREA DEVELOPMENT CORP.
Falcon Point 18 18 39 39
Spring Lakes 85 50 34 42
CRESCENT PLAZA RESIDENTIAL
The Residences at the
Ritz-Carlton 70 0 N/A 1,778
- ----------
(1) Our ownership percentage represents the profit percentage allocation after
we receive a preferred return on invested capital.
(2) SF (Single-Family Lots); CO (Condominium); TH (Townhome); TS (Timeshare
Equivalent Units): and ACR (Acreage). Superscript items represent P
(Primary residence); S (Secondary residence); and B (Both Primary and
Secondary residence).
(3) Based on lots, units and acres closed during our ownership period.
(4) Average Sales Price includes golf membership, which as of December 31,
2004 is $0.3 million.
(5) A joint venture partner participates in this project.
22
TEMPERATURE-CONTROLLED LOGISTICS PROPERTIES
The following table shows the number and aggregate size of
Temperature-Controlled Logistics Properties by state as of December 31, 2004:
TOTAL CUBIC TOTAL TOTAL CUBIC TOTAL
NUMBER OF FOOTAGE SQUARE FEET NUMBER OF FOOTAGE SQUARE FEET
STATE PROPERTIES(1) (IN MILLIONS) (IN MILLIONS) STATE PROPERTIES(1) (IN MILLIONS) (IN MILLIONS)
- ------------- ------------- ------------- ------------- -------------- ------------- ------------- -------------
Alabama 4 10.7 0.4 Mississippi 1 4.7 0.2
Arizona 1 2.9 0.1 Missouri 2 46.8 2.7
Arkansas 6 33.1 1.0 Nebraska 2 4.4 0.2
California 7 25.1 0.9 New York 1 11.8 0.4
Colorado 1 2.8 0.1 North Carolina 3 10.0 0.4
Florida 5 6.5 0.3 Ohio 1 5.5 0.2
Georgia 8 49.5 1.7 Oklahoma 2 2.1 0.1
Idaho 2 18.7 0.8 Oregon 6 40.4 1.7
Illinois 2 11.6 0.4 Pennsylvania 2 27.4 0.9
Indiana 1 9.1 0.3 South Carolina 1 1.6 0.1
Iowa 2 12.5 0.5 South Dakota 1 2.9 0.1
Kansas 2 5.0 0.2 Tennessee 3 10.6 0.4
Kentucky 1 2.7 0.1 Texas 2 6.6 0.2
Maine 1 1.8 0.2 Utah 1 8.6 0.4
Massachusetts 5 10.5 0.5 Virginia 2 8.7 0.3
Minnesota 1 3.0 0.1 Washington 6 28.7 1.1
Wisconsin 3 17.4 0.6
------- --------- --------
TOTAL 88 443.7 17.6
======= ========= ========
- ----------
(1) As of December 31, 2004, AmeriCold Realty Trust operated 103 facilities, of
which 87 were wholly-owned facilities, one was partially-owned and fifteen
were managed for outside owners.
ITEM 3. LEGAL PROCEEDINGS
We are not currently subject to any material legal proceeding nor, to our
knowledge, is any material legal proceeding contemplated against us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of our security holders during the
fourth quarter of our fiscal year ended December 31, 2004.
23
PART II
ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUIT