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The following is an excerpt from a 10-K SEC Filing, filed by VORNADO REALTY LP on 3/2/2012.
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VORNADO REALTY LP - 10-K - 20120302 - FINANCIAL_DATA

 

ITEM 6. SELECTED FINANCIAL DATA

Year Ended December 31,

(Amounts in thousands, except per unit amounts)

2011 

2010 

2009 

2008 

2007 

Operating Data:

Revenues:

Property rentals

$

2,261,811 

$

2,237,707 

$

2,148,975 

$

2,121,234 

$

1,885,580 

Tenant expense reimbursements

349,420 

355,616 

351,290 

347,932 

313,501 

Cleveland Medical Mart development project

154,080 

Fee and other income

150,354 

147,358 

155,326 

126,018 

108,693 

Total revenues

2,915,665 

2,740,681 

2,655,591 

2,595,184 

2,307,774 

Expenses:

Operating

1,091,597 

1,082,844 

1,050,545 

1,031,843 

915,609 

Depreciation and amortization

553,811 

522,022 

519,534 

519,850 

424,012 

General and administrative

209,981 

213,949 

230,584 

193,593 

188,513 

Cleveland Medical Mart development project

145,824 

Tenant buy-outs, impairment losses and

other acquisition related costs

58,299 

129,458 

73,763 

81,447 

10,375 

Total expenses

2,059,512 

1,948,273 

1,874,426 

1,826,733 

1,538,509 

Operating income

856,153 

792,408 

781,165 

768,451 

769,265 

Income (loss) applicable to Toys "R" Us

48,540 

71,624 

92,300 

2,380 

(14,337)

Income (loss) from partially owned entities

71,770 

22,438 

(19,910)

(159,207)

82,480 

Income (loss) from Real Estate Fund

22,886 

(303)

Interest and other investment income (loss), net

148,826 

235,315 

(116,350)

(2,747)

226,242 

Interest and debt expense

(544,015)

(560,052)

(617,768)

(619,298)

(583,042)

Net gain (loss) on extinguishment of debt

94,789 

(25,915)

9,820 

Net gain on disposition of wholly owned and partially

owned assets

15,134 

81,432 

5,641 

7,757 

39,493 

Income before income taxes

619,294 

737,651 

99,163 

7,156 

520,101 

Income tax (expense) benefit

(24,827)

(22,476)

(20,642)

204,644 

(9,057)

Income from continuing operations

594,467 

715,175 

78,521 

211,800 

511,044 

Income (loss) from discontinued operations

145,533 

(7,144)

49,929 

199,645 

96,789 

Net income

740,000 

708,031 

128,450 

411,445 

607,833 

Less:

Net (income) loss attributable to noncontrolling

interests in consolidated subsidiaries

(21,786)

(4,920)

2,839 

3,263 

3,494 

Net income attributable to Vornado Realty L.P.

718,214 

703,111 

131,289 

414,708 

611,327 

Preferred unit distributions

(80,384)

(66,729)

(76,747)

(79,453)

(76,894)

Discount on preferred unit redemptions

5,000 

4,382 

Net income attributable to Class A unitholders

$

642,830 

$

640,764 

$

54,542 

$

335,255 

$

534,433 

Income from continuing operations - basic

$

2.52 

$

3.31 

$

$

0.78 

$

2.60 

Income from continuing operations - diluted

2.50 

3.27 

0.76 

2.50 

Net income per Class A unit - basic

3.26 

3.27 

0.27 

1.97 

3.18 

Net income per Class A unit - diluted

3.23 

3.23 

0.27 

1.91 

3.05 

Distributions per Class A unit

2.76 

2.60 

3.20 

3.65 

3.45 

Balance Sheet Data:

Total assets

$

20,446,487 

$

20,517,471 

$

20,185,472 

$

21,418,048 

$

22,478,717 

Real estate, at cost

17,627,011 

17,387,701 

17,293,970 

17,140,726 

16,336,129 

Accumulated depreciation

(3,095,037)

(2,715,046)

(2,395,608)

(2,068,357)

(1,723,952)

Debt

10,562,002 

10,889,442 

10,681,342 

12,176,317 

11,456,399 

Total equity

7,508,447 

6,830,405 

6,649,406 

6,214,652 

6,011,240 

 

 

64


 
 

 

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Page

Overview

66

Overview - Leasing activity

73

Critical Accounting Policies

76

Net Income and EBITDA by Segment for the Years Ended

December 31, 2011, 2010 and 2009

79

Results of Operations:

Years Ended December 31, 2011 and 2010

84

Years Ended December 31, 2010 and 2009

90

Supplemental Information:

Net Income and EBITDA by Segment for the Three Months Ended

December 31, 2011 and 2010

96

Three Months Ended December 31, 2011 Compared to December 31, 2010

100

Three Months Ended December 31, 2011 Compared to September 30, 2011

101

Related Party Transactions

102

Liquidity and Capital Resources

103

Financing Activities and Contractual Obligations

103

Certain Future Cash Requirements

106

Cash Flows for the Year Ended December 31, 2011

109

Cash Flows for the Year Ended December 31, 2010

111

Cash Flows for the Year Ended December 31, 2009

113

 

 

65


 
 

 

Overview

Vornado Realty L.P. (the “Operating Partnership” and/or the “Company”) is a Delaware limited partnership.  Vornado Realty Trust (“Vornado”) is the sole general partner of, and owned approximately 93.5% of the common limited partnership interest in the Operating Partnership at December 31, 2011.  All references to “we,” “us,” “our,” the “Company” and “Operating Partnership” refer to Vornado Realty L.P. and its consolidated subsidiaries.

 

We own and operate office, retail and showroom properties (our “core” operations) with large concentrations of office and retail properties in the New York City metropolitan area and in the Washington, DC / Northern Virginia area. In addition, we have a 32.7% interest in Toys “R” Us, Inc. (“Toys”) which has a significant real estate component, a 32.4% interest in Alexander’s, Inc. (NYSE: ALX) (“Alexander’s”), which has seven properties in the greater New York metropolitan area, as well as interests in other real estate and related investments.

 

Our business objective is to maximize Vornado shareholder value, which we measure by the total return provided to Vornado’s shareholders. Below is a table comparing Vornado’s performance to the Morgan Stanley REIT Index (“RMS”) and the SNL REIT Index (“SNL”) for the following periods ended December 31, 2011:

 

Total Return (1)

Vornado

RMS

SNL

One-year

(4.6%)

8.7%

8.3%

Three-year

40.2%

79.6%

79.9%

Five-year

(25.2%)

(7.3%)

(3.9%)

Ten-year

187.0%

163.2%

175.4%

(1) Past performance is not necessarily indicative of future performance.

 

We intend to achieve our business objective by continuing to pursue our investment philosophy and executing our operating strategies through:

 

·      Maintaining a superior team of operating and investment professionals and an entrepreneurial spirit;

·      Investing in properties in select markets, such as New York City and Washington, DC, where we believe there is a high likelihood of capital appreciation;

·      Acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents;

·      Investing in retail properties in select under-stored locations such as the New York City metropolitan area;

·      Developing and redeveloping existing properties to increase returns and maximize value; and

·      Investing in operating companies that have a significant real estate component.

 

We expect to finance our growth, acquisitions and investments using internally generated funds, proceeds from possible asset sales and by accessing the public and private capital markets.  We may also offer partnership units in exchange for property and may repurchase or otherwise reacquire our units or any other securities in the future.

 

We compete with a large number of real estate property owners and developers, some of which may be willing to accept lower returns on their investments than we are. Principal factors of competition include rents charged, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends.  See “Risk Factors” in Item 1A for additional information regarding these factors.

 

 

66


 
 

 

 

Overview - continued

Year Ended December 31, 2011 Financial Results Summary

 

Net income attributable to Class A unitholders for the year ended December 31, 2011 was $642,830,000, or $3.23 per diluted Class A unit, compared to $640,764,000, or $3.23 per diluted Class A unit, for the year ended December 31, 2010. Net income for the years ended December 31, 2011 and 2010 includes $61,390,000 and $63,032,000, respectively, of net gains on sale of real estate, and $28,799,000 and $108,981,000, respectively, of real estate impairment losses.  In addition, the years ended December 31, 2011 and 2010 include certain items that affect comparability which are listed in the table below.  The aggregate of net gains on sale of real estate, real estate impairment losses and the items in the table below increased net income attributable to Class A unitholders by $260,476,000, or $1.31 per diluted Class A unit for the year ended December 31, 2011 and $203,144,000, or $1.03 per diluted Class A unit for the year ended December 31, 2010.

 

For the Year Ended

December 31,

(Amounts in thousands)

2011 

2010 

Items that affect comparability income (expense):

Net gain on extinguishment of debt

$

83,907 

$

92,150 

Mezzanine loan loss reversals and net gain on disposition

82,744 

53,100 

Our share of LNR's income tax benefit, asset sales and tax settlement gains

27,377 

Recognition of disputed receivable from Stop & Shop

23,521 

Income from the mark-to-market of J.C. Penney derivative position

12,984 

130,153 

Net gain from Suffolk Downs' sale of a partial interest

12,525 

Net gain resulting from Lexington Realty Trust's stock issuance

9,760 

13,710 

Discount on preferred share and unit redemptions

7,000 

11,354 

Net gain on sale of condominiums

5,884 

3,149 

Tenant buy-outs and acquisition costs

(30,071)

(6,945)

Non-cash asset write-downs:

Real estate - development related

(30,013)

Partially owned entities

(13,794)

Merchandise Mart restructuring costs

(4,226)

Real Estate Fund placement fees

(3,451)

(6,482)

Default interest and fees accrued on loans in special servicing

(15,079)

Income attributable to discontinued operations

15,802 

14,068 

Other, net

(2,077)

(10,072)

Items that affect comparability

$

227,885 

$

249,093 

 

 

The percentage increase (decrease) in GAAP basis and cash basis same store Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of our operating segments for the year ended December 31, 2011 over the year ended December 31, 2010 is summarized below.

New York

Washington, DC

Merchandise

Same Store EBITDA:

Office

Office

Retail

Mart

December 31, 2011 vs. December 31, 2010

GAAP basis

(0.1%)

0.9%

3.1%

0.5%

Cash Basis

1.8%

1.8%

6.4%

3.5%

 

 

67


 
 

 

 

Overview - continued

Quarter Ended December 31, 2011  Financial Results Summary

 

Net income attributable to Class A unitholders for the quarter ended December 31, 2011 was $74,182,000, or $0.37 per diluted Class A unit, compared to $260,662,000, or $1.31 per diluted Class A unit, for the quarter ended December 31, 2010.  Net income for the quarters ended December 31, 2011 and 2010 includes $1,916,000 and $62,718,000, respectively, of net gains on sale of real estate, and $28,799,000 and $103,981,000, respectively, of real estate impairment losses.  In addition, the quarters ended December 31, 2011 and 2010 include certain other items that affect comparability which are listed in the table below.  The aggregate of net gains on sale of real estate, real estate impairment losses and the items in the table below increased net income attributable to Class A unitholders by $37,419,000, or $0.19 per diluted Class A unit for the quarter ended December 31, 2011 and $185,683,000, or $0.91 per diluted Class A unit for the quarter ended December 31, 2010.

 

For the Three Months Ended

December 31,

(Amounts in thousands)

2011 

2010 

Items that affect comparability income (expense):

Income from the mark-to-market of J.C. Penney derivative position

$

40,120 

$

97,904 

Recognition of disputed receivable from Stop & Shop

23,521 

Net gain from Suffolk Downs' sale of a partial interest

12,525 

Our share of LNR's income tax benefit

12,380 

Net gain on extinguishment of debt

93,946 

Mezzanine loan loss reversal

60,000 

Net gain resulting from Lexington Realty Trust's stock issuance

7,712 

Non-cash asset write-downs:

Real estate - development related

(30,013)

Partially owned entities

(13,794)

Tenant buy-outs and acquisition costs

(10,656)

(4,094)

Income attributable to discontinued operations

5,039 

4,665 

Other, net

(4,833)

(3,174)

Items that affect comparability

$

64,302 

$

226,946 

 

 

The percentage increase (decrease) in GAAP basis and cash basis same store EBITDA of our operating segments for the quarter ended December 31, 2011 over the quarter ended December 31, 2010 and the trailing quarter ended September 30, 2011 are summarized below.

New York

Washington, DC

Merchandise

Same Store EBITDA:

Office

Office

Retail

Mart

December 31, 2011 vs. December 31, 2010

GAAP basis

3.3%

(3.0%)

2.4%

8.9%

Cash Basis

5.6%

(2.5%)

6.0%

10.5%

December 31, 2011 vs. September 30, 2011

GAAP basis

3.7%

(3.2%)

2.5%

23.5%

(1)

Cash Basis

1.1%

(2.9%)

6.3%

20.8%

(1)

(1)

Primarily from the timing of trade shows.

 

Calculations of same store EBITDA and reconciliations of our net income to EBITDA and the reasons we consider these non-GAAP financial measures useful are provided in the following pages of Management’s Discussion and Analysis of the Financial Condition and Results of Operations.

 

 

68


 
 

 

 

O verview – continued

 

 

Vornado Capital Partners Real Estate Fund (the “Fund”)

 

In February 2011, the Fund’s subscription period closed with an aggregate of $800,000,000 of capital commitments, of which we committed $200,000,000.  We are the general partner and investment manager of the Fund, which has an eight-year term and a three-year investment period.  During the investment period, which concludes in July 2013, the Fund is our exclusive investment vehicle for all investments that fit within its investment parameters, as defined.  The Fund is accounted for under the AICPA Investment Company Guide and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings.  We consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting. 

 

During 2011, the Fund made three investments (described below) aggregating $248,500,000 and exited two investments.  As of December 31, 2011, the Fund has five investments with an aggregate fair value of approximately $346,650,000, or $11,995,000 in excess of cost, and has remaining unfunded commitments of $416,600,000, of which our share is $104,150,000.

 

        One Park Avenue

 

On March 1, 2011, the Fund as a co-investor (64.7% interest), together with Vornado (30.3% interest), acquired a 95% interest in One Park Avenue, a 932,000 square foot office building located between 32 nd and 33 rd Streets in New York, for $374,000,000.  The purchase price consisted of $137,000,000 in cash and 95% of a $250,000,000 five-year mortgage that bears interest at 5.0%.

 

Crowne Plaza Times Square

 

On December 16, 2011, the Fund formed a joint venture with the owner of the property to recapitalize the Crowne Plaza Hotel in Times Square.  The property is located at 48th Street and Broadway in Times Square and is comprised of a 795-key hotel, 14,000 square feet of prime retail space, 212,000 square feet of office space, nine large signage offerings, a 159-space parking garage and a health club.  The joint venture plans to reconfigure and reposition the retail and office space as well as add additional signage.  Vornado will manage and lease the commercial components of the property and the joint venture partner will asset manage the hotel.  This transaction was initiated by us in May 2011, when the Fund acquired a $34,000,000 mezzanine position in the junior most tranche of the property’s mezzanine debt.  In December 2011, the Fund contributed $31,000,000 and its partner contributed $22,000,000 of new capital to pay down third party debt and for future capital expenditures.  The new capital was contributed in the form of debt that is convertible into preferred equity that receives a priority return and then will receive a profit participation.  The Fund has an economic interest of approximately 38% in the property.  The Fund’s investment is subordinate to the property’s $259,000,000 of senior debt which matures in December 2013, with a one-year extension option.

 

11 East 68 th Street

 

On December 29, 2011, the Fund committed to acquire the retail portion of 11 East 68th Street, an 11-story residential and retail property located on Madison Avenue and 68th Street, for $50,500,000.  The retail portion of the property consists of two retail units aggregating 5,000 square feet.  The Fund provided $21,200,000 at closing and will provide the remaining $29,300,000 over the next two years.  In addition, the Fund has also provided a $21,000,000 mezzanine loan on the residential portion of the property, which bears paid-in-kind interest at 15%, matures in three years and has a one-year extension option.  

 

 

69


 
 

 

 

O verview – continued

 

 

2011 Acquisitions and Investments

 

1399 New York Avenue (the “Executive Tower”)

 

On December 23, 2011, we acquired the 97.5% interest that we did not already own in the Executive Tower, an 11-story, 128,000 square foot Class A office building located in the Washington, CBD East End submarket close to the White House, for $104,000,000 in cash.

 

666 Fifth Avenue Office

 

On December 16, 2011, we formed a joint venture with an affiliate of the Kushner Companies to recapitalize the office portion of 666 Fifth Avenue, a 39-story, 1.4 million square foot Class A office building in Manhattan, located on the full block front of Fifth Avenue between 52nd and 53rd Street.  We acquired a 49.5% interest in the property from the Kushner Companies, the current owner.  In connection therewith, the existing $1,215,000,000 mortgage loan was modified by LNR, the special servicer, into a $1,100,000,000 A-Note and a $115,000,000 B-Note and extended to February 2019; and a portion of the current pay interest was deferred to the B-Note.  We and the Kushner Companies have committed to lend the joint venture an aggregate of $110,000,000 (of which our share is $80,000,000) for tenant improvements and working capital for the property, which is senior to the $115,000,000 B-Note. In addition, we have provided the A-Note holders a limited recourse and cooperation guarantee of up to $75,000,000 if an event of default occurs and is ongoing.

 

Independence Plaza

 

On June 17, 2011, a joint venture in which we are a 51% partner invested $55,000,000 in cash (of which we contributed $35,000,000) to acquire a face amount of $150,000,000 of mezzanine loans and a $35,000,000 participation in a senior loan on Independence Plaza, a residential complex comprised of three 39-story buildings in the Tribeca submarket of Manhattan.

 

280 Park Avenue Joint Venture

 

On March 16, 2011, we formed a 50/50 joint venture with SL Green Realty Corp to own the mezzanine debt of 280 Park Avenue, a 1.2 million square foot office building located between 48th and 49th Streets in Manhattan (the “Property”).  We contributed our mezzanine loan with a face amount of $73,750,000 and they contributed their mezzanine loans with a face amount of $326,250,000 to the joint venture.  We equalized our interest in the joint venture by paying our partner $111,250,000 in cash and assuming $15,000,000 of their debt.  On May 17, 2011, as part of the recapitalization of the Property, the joint venture contributed its debt position for 99% of the common equity of a new joint venture which owns the Property.  The new joint venture’s investment is subordinate to $710,000,000 of third party debt.  The new joint venture expects to spend $150,000,000 for re-tenanting and repositioning the Property.

 

 

2011 Dispositions

 

On January 6, 2012, we completed the sale of 350 West Mart Center, a 1.2 million square foot office building located in Chicago, Illinois, for $228,000,000 in cash, which resulted in a net gain of $54,200,000 that will be recognized in the first quarter of 2012.

 

On March 31, 2011, the receiver completed the disposition of the High Point Complex in North Carolina.  In connection therewith, the property and related debt were removed from our consolidated balance sheet and we recognized a net gain of $83,907,000 on the extinguishment of debt.

 

On January 12, 2011, we sold 1140 Connecticut Avenue and 1227 25 th Street in Washington, DC, for $127,000,000 in cash, which resulted in a net gain of $45,862,000.

 

In 2011, we sold three retail properties in separate transactions for an aggregate of $40,990,000 in cash, which resulted in net gains of $5,761,000.

 

 

70


 
 

 

 

O verview – continued

 

 

2011 Financing Activities

 

Senior Unsecured Debt

 

On November 30, 2011, we completed a public offering of $400,000,000 aggregate principal amount of 5.0%, ten-year senior unsecured notes and retained net proceeds of approximately $395,584,000.  The notes were sold at 99.546% of their face amount to yield 5.057%.

 

In 2011, we renewed both of our unsecured revolving credit facilities aggregating $2,500,000,000.  The first facility, which was renewed in June 2011, bears interest on drawn amounts at LIBOR plus 1.35% and has a 0.30% facility fee (drawn or undrawn).  The second facility, which was renewed in November 2011, bears interest on drawn amounts at LIBOR plus 1.25% and has a 0.25% facility fee (drawn or undrawn).  The LIBOR spread and facility fee on both facilities are based on our credit ratings.  Both facilities mature in four years and have one-year extension options.  As of December 31, 2011, an aggregate of $138,000,000 was outstanding under these facilities.   

 

 

Secured Debt

 

On January 9, 2012, we completed a $300,000,000 refinancing of 350 Park Avenue, a 557,000 square foot Manhattan office building. The five-year fixed rate loan bears interest at 3.75% and amortizes based on a 30-year schedule beginning in the third year. The proceeds of the new loan and $132,000,000 of existing cash were used to repay the existing loan and closing costs.

 

On December 28, 2011, we completed a $330,000,000 refinancing of Eleven Penn Plaza, a 1.1 million square foot Manhattan office building. The seven-year loan bears interest at LIBOR plus 2.35% and amortizes based on a 30-year schedule beginning in the fourth year. We retained net proceeds of approximately $126,000,000 after repaying the existing loan and closing costs.              

 

On September 1, 2011, we completed a $600,000,000 refinancing of 555 California Street, a three-building office complex aggregating 1.8 million square feet in San Francisco’s financial district, known as the Bank of America Center, in which we own a 70% controlling interest.  The 10-year fixed rate loan bears interest at 5.10% and amortizes based on a 30-year schedule beginning in the fourth year.  The proceeds of the new loan and $45,000,000 of existing cash were used to repay the existing loan and closing costs.

 

On May 11, 2011, we repaid the outstanding balance of the construction loan on West End 25, and closed on a $101,671,000 mortgage at a fixed rate of 4.88%.  The loan has a 10-year term and amortizes based on a 30-year schedule beginning in the sixth year.

 

On February 11, 2011, we completed a $425,000,000 refinancing of Two Penn Plaza, a 1.6 million square foot Manhattan office building.  The seven-year loan bears interest at LIBOR plus 2.00%, which was swapped for the term of the loan to a fixed rate of 5.13%.  The loan amortizes based on a 30-year schedule beginning in the fourth year.  We retained net proceeds of approximately $139,000,000 after repaying the existing loan and closing costs.

 

On February 10, 2011, we completed a $150,000,000 financing of 2121 Crystal Drive, a 506,000 square foot office building located in Crystal City, Arlington, Virginia.  The 12-year fixed rate loan bears interest at 5.51% and amortizes based on a 30-year schedule beginning in the third year.  This property was previously unencumbered.

 

 

 

71


 
 

 

 

O verview – continued

 

 

2011 Financing Activities – continued

 

Secured Debt – continued

 

 

On January 18, 2011, we repaid the outstanding balance of the construction loan on 220 20 th Street and closed on a $76,100,000 mortgage at a fixed rate of 4.61%.  The loan has a seven-year term and amortizes based on a 30-year schedule.

 

On January 10, 2011, we completed a $75,000,000 financing of North Bergen (Tonnelle Avenue), a 410,000 square foot strip shopping center.  The seven-year fixed rate loan bears interest rate at 4.59% and amortizes based on a 25-year schedule beginning in the sixth year. This property was previously unencumbered.

 

On January 6, 2011, we completed a $60,000,000 financing of land under a portion of the Borgata Hotel and Casino complex. The 10-year fixed rate loan bears interest at 5.14% and amortizes based on a 30-year schedule beginning in the third year.

 

 

Preferred Equity

 

On April 20, 2011, Vornado sold 7,000,000 6.875% Series J Cumulative Redeemable Preferred shares at a price of $25.00 per share, in an underwritten public offering pursuant to an effective registration statement.  On April 21, 2011, the underwriters exercised their option to purchase an additional 1,050,000 shares to cover over-allotments.  On May 5, 2011 and August 5, 2011 Vornado sold an additional 800,000 and 1,000,000 shares, respectively, at a price of $25.00 per share.  Vornado retained aggregate net proceeds of $238,842,000, after underwriters’ discounts and issuance costs and contributed the net proceeds to us in exchange for 9,850,000 Series J Preferred Units (with economic terms that mirror those of the Series J Preferred Shares). 

 

 

 

 

72


 
 

 

Overview - continued

 

Leasing Activity

 

The leasing activity presented below is based on leases signed during the period and is not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  Tenant improvements and leasing commissions presented below are based on square feet leased during the period.

 

(Square feet in thousands)

New York

Washington, DC

Merchandise Mart

As of December 31, 2011:

Office

Office

Retail (4)

Office

Showroom

Total square feet (in service)

20,773 

20,529 

25,245 

1,556 

4,014 

Our share of square feet (in service)

17,546 

17,925 

23,012 

1,556 

4,014 

Number of properties

30 

77 

155 

Occupancy rate

95.6%

90.0% (3)

93.0%

90.5%

83.0%

Leasing Activity:

Quarter Ended December 31, 2011:

Total square feet leased

1,138 

605 

382 

68 

80 

Our share of square feet leased

925 

575 

382 

68 

80 

Initial rent (1)

$

50.99 

$

42.30 

$

23.37 

$

26.00 

$

30.99 

Weighted average lease term (years)

8.5 

7.5 

8.6 

12.0 

4.0 

Relet space (included above):

Square feet

832 

497 

190 

68 

80 

Cash basis:

Initial rent (1)

$

50.04 

$

41.99 

$

15.58 

$

26.00 

$

30.99 

Prior escalated rent

$

45.71 

$

39.00 

$

14.76 

$

24.92 

$

34.02 

Percentage increase (decrease)

9.5%

7.7%

5.6%

4.3%

(8.9%)

GAAP basis:

Straight-line rent (2)

$

50.13 

$

41.72 

$

15.73 

$

26.58 

$

30.55 

Prior straight-line rent

$

43.43 

$

38.38 

$

13.69 

$

22.26 

$

30.07 

Percentage increase

15.4%

8.7%

14.9%

19.4%

1.6%

Tenant improvements and leasing

commissions:

Per square foot

$

44.25 

$

35.05 

$

8.70 

$

83.30 

$

3.00 

Per square foot per annum:

$

5.21 

$

4.67 

$

1.01 

$

6.94 

$

0.75 

Percentage of initial rent

10.2%

11.0%

4.3%

26.7%

2.4%

Year Ended December 31, 2011:

Total square feet leased

3,211 

1,784 

1,554 

257 

438 

Our share of square feet leased

2,432 

1,606 

1,522 

257 

438 

Initial rent (1)

$

55.37 

$

40.99 

$

24.95 

$

27.61 

$

34.68 

Weighted average lease term (years)

9.2 

5.6 

8.7 

8.2 

5.6 

Relet space (included above):

Square feet

2,089 

1,427 

629 

257 

438 

Cash basis:

Initial rent (1)

$

56.21 

$

40.79 

$

19.88 

$

27.61 

$

34.68 

Prior escalated rent

$

47.66 

$

38.65 

$

18.21 

$

27.52 

$

36.33 

Percentage increase (decrease)

18.0%

5.5%

9.2%

0.3%

(4.5%)

GAAP basis:

Straight-line rent (2)

$

56.19 

$

40.43 

$

20.46 

$

27.99 

$

33.71 

Prior straight-line rent

$

47.47 

$

37.33 

$

17.56 

$

24.40 

$

32.86 

Percentage increase

18.4%

8.3%

16.5%

14.7%

2.6%

Tenant improvements and leasing

commissions:

Per square foot

$

48.28 

$

25.21 

$

7.47 

$

61.12 

$

5.31 

Per square foot per annum:

$

5.25 

$

4.50 

$

0.86 

$

7.45 

$

0.95 

Percentage of initial rent

9.5%

11.0%

3.4%

27.0%

2.7%