Maryland
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68-0509956
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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17300 Dallas Parkway, Suite 1010, Dallas, Texas
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75248
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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market and economic challenges experienced by the U.S. economy or real estate industry as a whole and the local economic conditions in the markets in which our properties are located;
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•
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our ability to renew expiring leases and lease vacant spaces at favorable rates or at all;
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•
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the inability of tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business;
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•
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the availability of cash flow from operating activities to fund distributions and capital expenditures;
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•
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our ability to raise capital in the future by issuing additional equity or debt securities, selling our assets or otherwise, to fund our future capital needs;
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•
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our ability to strategically dispose of assets on favorable terms;
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•
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our level of debt and the terms and limitations imposed on us by our debt agreements;
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•
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our ability to retain our executive officers and other key personnel;
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•
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the increase in our direct overhead, as a result of becoming a self-managed company;
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•
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conflicts of interest and competing demands faced by certain of our directors;
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•
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limitations on our ability to terminate our property management agreement and certain services under our administrative services agreement;
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•
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unfavorable changes in laws or regulations impacting our business or our assets; and
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•
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factors that could affect our ability to qualify as a real estate investment trust.
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•
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to preserve, protect and return stockholders’ capital contributions;
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•
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to maximize cash distributions paid to stockholders;
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•
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to realize growth in the value of our investments upon the ultimate sale of these investments; and
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•
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to list our shares for trading on a national securities exchange or, if we do not list our shares before February 2017, to make an orderly disposition of our assets and distribute the cash to our stockholders, unless a majority of our directors, including a majority of our independent directors, extends this date.
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•
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limiting our ability to borrow additional amounts for, among other things, working capital, capital expenditures, debt service requirements, execution of our business plan or other purposes;
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•
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limiting our ability to use operating cash flow in other areas of our business or to pay distributions;
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•
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increasing our vulnerability to general adverse economic and industry conditions;
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•
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limiting our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in governmental regulation;
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•
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limiting our ability to fund capital expenditures, tenant improvements and leasing commissions; and
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•
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limiting our ability or increasing the costs to refinance our indebtedness.
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•
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changes in the national, regional, and local economic climates, particularly in markets in which we have a concentration of properties;
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•
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local office submarket conditions such as changes in the supply of, or demand for, space in properties similar to those that we own within a particular area;
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•
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changes in the patterns of office use due to technological advances which may make telecommuting more prevalent;
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•
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the attractiveness of our properties to potential tenants;
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•
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changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive or otherwise reduce returns to stockholders;
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•
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the financial stability of our tenants, including bankruptcies, financial difficulties or lease defaults by our tenants;
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•
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changes in operating costs and expenses, including costs for maintenance, insurance and real estate taxes, and our ability to control rents in light of such changes;
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•
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the need to periodically fund the costs to repair, renovate and re-lease space;
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•
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earthquakes, tornadoes, hurricanes and other natural disasters, civil unrest, terrorist acts or acts of war, which may result in uninsured or underinsured losses;
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changes in, or increased costs of compliance with, governmental regulations, including those governing usage, zoning, the environment and taxes; and
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•
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changes in accounting standards.
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•
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enforcing our agreements with Behringer Advisors, HPT Management and their affiliates, including the administrative services agreement and the property management agreement;
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•
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property sales, which reduce the amount of property management fees payable to HPT Management;
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•
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whether and when we seek to list our common stock on a national securities exchange, which could entitle Services Holdings to the issuance of shares of our common stock through the conversion of the Series A Convertible Preferred Stock; and
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•
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whether and when we seek to sell the Company or its assets, which sale could entitle Services Holdings to the issuance of shares of our common stock through the conversion of the Series A Convertible Preferred Stock.
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•
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any person who beneficially owns 10% or more of the voting power of the then outstanding voting stock of the corporation; or
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•
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an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.
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80% of the votes entitled to be cast by holders of the then outstanding shares of voting stock of the corporation; and
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•
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two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
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•
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one-tenth or more but less than one-third of all voting power;
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•
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one-third or more but less than a majority of all voting power; or
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•
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a majority or more of all voting power.
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•
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limitations on capital structure;
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•
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restrictions on specified investments;
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•
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prohibitions on transactions with affiliates; and
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•
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compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.
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•
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we would not be allowed to deduct distributions paid to stockholders when computing our taxable income;
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•
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we would be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates;
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•
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we would become subject to additional state income tax provisions and owe greater amounts of state income tax on our taxable income;
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•
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we would be disqualified from being taxed as a REIT for the four years following the year during which we failed to qualify, unless entitled to relief under certain statutory provisions; and
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•
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we may be required to borrow additional funds during unfavorable market conditions or sell some of our assets in order to pay corporate tax obligations.
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•
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We are subject to tax on any undistributed income. We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year plus amounts retained for which federal income tax was paid are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
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•
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If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.
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•
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If we sell a property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax.
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•
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We will be subject to a 100% penalty tax on certain amounts if the economic arrangements between our tenants, our taxable REIT subsidiaries and us are not comparable to similar arrangements among unrelated parties.
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•
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State laws may change so as to begin taxing REITs or non-exchange traded REITs.
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Date Acquired
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Approximate
Rentable Square Footage
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Approximate % Leased
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Our
Ownership Interest
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Ownership Type
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Property Name
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Location
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||||||||
10 & 120 South Riverside
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Chicago, IL
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11/2007
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1,411,000
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90
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%
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100.00
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%
|
|
fee title
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222 South Riverside Plaza
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Chicago, IL
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06/2006
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|
1,184,000
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91
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%
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100.00
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%
|
|
fee title
|
One Financial Place
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Chicago, IL
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|
11/2007
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|
1,041,000
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73
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%
|
|
100.00
|
%
|
|
fee title
|
200 South Wacker
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Chicago, IL
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|
11/2007
|
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755,000
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77
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%
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|
9.87
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%
|
|
joint venture
|
Wanamaker Building
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|
Philadelphia, PA
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|
12/2007
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|
1,390,000
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98
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%
|
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60.00
|
%
|
|
joint venture
|
United Plaza
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|
Philadelphia, PA
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|
12/2007
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|
617,000
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|
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97
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%
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|
100.00
|
%
|
|
fee title
|
Three Parkway
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|
Philadelphia, PA
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|
10/2006
|
|
561,000
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92
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%
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|
100.00
|
%
|
|
fee title
|
1650 Arch Street
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|
Philadelphia, PA
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|
12/2007-03/2011
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553,000
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81
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%
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|
100.00
|
%
|
|
fee title
|
The Terrace Office Park
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|
Austin, TX
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|
06/2006
|
|
619,000
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|
|
67
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%
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|
100.00
|
%
|
|
fee title
|
Burnett Plaza
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|
Ft. Worth, TX
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|
02/2006
|
|
1,025,000
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86
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%
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|
100.00
|
%
|
|
fee title
|
Centreport Office Center
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|
Ft. Worth, TX
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|
06/2007
|
|
133,000
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|
|
100
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%
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|
100.00
|
%
|
|
fee title
|
Loop Central
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|
Houston, TX
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|
12/2007
|
|
575,000
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|
78
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%
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|
100.00
|
%
|
|
fee title
|
One & Two Eldridge Place
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|
Houston, TX
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|
12/2006
|
|
519,000
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|
|
97
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%
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|
100.00
|
%
|
|
fee title
|
One BriarLake Plaza
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|
Houston, TX
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|
09/2008
|
|
502,000
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|
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95
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%
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|
100.00
|
%
|
|
fee title
|
Three Eldridge Place
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|
Houston, TX
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|
11/2009
|
|
305,000
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100
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%
|
|
100.00
|
%
|
|
fee title
|
Buena Vista Plaza
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|
Burbank, CA
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|
07/2005
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|
115,000
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|
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100
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%
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|
100.00
|
%
|
|
fee title
|
1325 G Street
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|
Washington, D.C.
|
|
11/2005
|
|
307,000
|
|
|
82
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%
|
|
100.00
|
%
|
|
fee title
|
Colorado Building
|
|
Washington, D.C.
|
|
08/2004-12/2008
|
|
128,000
|
|
|
80
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%
|
|
100.00
|
%
|
|
fee title
|
5104 Eisenhower Boulevard
|
|
Tampa, FL
|
|
12/2007
|
|
130,000
|
|
|
100
|
%
|
|
100.00
|
%
|
|
fee title
|
Paces West
|
|
Atlanta, GA
|
|
04/2006
|
|
646,000
|
|
|
84
|
%
|
|
100.00
|
%
|
|
fee title
|
Ashford Perimeter
|
|
Atlanta, GA
|
|
01/2005
|
|
288,000
|
|
|
38
|
%
|
|
100.00
|
%
|
|
fee title
|
Epic Center
|
|
Wichita, KS
|
|
12/2007
|
|
289,000
|
|
|
85
|
%
|
|
100.00
|
%
|
|
fee title
|
Two Brittany Place
|
|
Wichita, KS
|
|
12/2007
|
|
58,000
|
|
|
100
|
%
|
|
100.00
|
%
|
|
fee title
|
One Brittany Place
|
|
Wichita, KS
|
|
12/2007
|
|
57,000
|
|
|
56
|
%
|
|
100.00
|
%
|
|
fee title
|
Forum Office Park
|
|
Louisville, KY
|
|
12/2007
|
|
328,000
|
|
|
80
|
%
|
|
100.00
|
%
|
|
fee title
|
Hurstbourne Place
|
|
Louisville, KY
|
|
12/2007
|
|
235,000
|
|
|
75
|
%
|
|
100.00
|
%
|
|
fee title
|
One Oxmoor Place
|
|
Louisville, KY
|
|
12/2007
|
|
135,000
|
|
|
97
|
%
|
|
100.00
|
%
|
|
fee title
|
Hurstbourne Park
|
|
Louisville, KY
|
|
12/2007
|
|
104,000
|
|
|
87
|
%
|
|
100.00
|
%
|
|
fee title
|
Hurstbourne Plaza (1)
|
|
Louisville, KY
|
|
12/2007
|
|
94,000
|
|
|
44
|
%
|
|
100.00
|
%
|
|
fee title
|
Steeplechase Place
|
|
Louisville, KY
|
|
12/2007
|
|
77,000
|
|
|
69
|
%
|
|
100.00
|
%
|
|
fee title
|
Lakeview
|
|
Louisville, KY
|
|
12/2007
|
|
76,000
|
|
|
86
|
%
|
|
100.00
|
%
|
|
fee title
|
Hunnington
|
|
Louisville, KY
|
|
12/2007
|
|
62,000
|
|
|
79
|
%
|
|
100.00
|
%
|
|
fee title
|
Energy Centre
|
|
New Orleans, LA
|
|
12/2007
|
|
757,000
|
|
|
91
|
%
|
|
87.86
|
%
|
|
joint venture
|
5 & 15 Wayside
|
|
Burlington, MA
|
|
12/2006
|
|
270,000
|
|
|
96
|
%
|
|
100.00
|
%
|
|
fee title
|
One & Two Chestnut Place
|
|
Worcester, MA
|
|
12/2007
|
|
218,000
|
|
|
86
|
%
|
|
100.00
|
%
|
|
fee title
|
250 W. Pratt
|
|
Baltimore, MD
|
|
12/2004-12/2006
|
|
368,000
|
|
|
87
|
%
|
|
100.00
|
%
|
|
fee title
|
500 E. Pratt
|
|
Baltimore, MD
|
|
12/2007
|
|
280,000
|
|
|
100
|
%
|
|
100.00
|
%
|
|
leasehold
|
801 Thompson
|
|
Rockville, MD
|
|
12/2007
|
|
51,000
|
|
|
100
|
%
|
|
100.00
|
%
|
|
fee title
|
Lawson Commons
|
|
St. Paul, MN
|
|
06/2005
|
|
436,000
|
|
|
91
|
%
|
|
100.00
|
%
|
|
fee title
|
Bank of America Plaza
|
|
Charlotte, NC
|
|
10/2006
|
|
891,000
|
|
|
93
|
%
|
|
100.00
|
%
|
|
fee title
|
City Hall Plaza
|
|
Manchester, NH
|
|
12/2007
|
|
210,000
|
|
|
74
|
%
|
|
100.00
|
%
|
|
fee title
|
Woodcrest Corporate Center
|
|
Cherry Hill, NJ
|
|
01/2006
|
|
333,000
|
|
|
99
|
%
|
|
100.00
|
%
|
|
fee title
|
Tice Building
|
|
Woodcliff Lake, NJ
|
|
12/2007
|
|
120,000
|
|
|
56
|
%
|
|
100.00
|
%
|
|
fee title
|
600 & 619 Alexander Road (2)
|
|
Princeton, NJ
|
|
06/2006
|
|
97,000
|
|
|
82
|
%
|
|
100.00
|
%
|
|
fee title
|
111 Woodcrest
|
|
Cherry Hill, NJ
|
|
11/2007
|
|
53,000
|
|
|
60
|
%
|
|
100.00
|
%
|
|
fee title
|
One Edgewater Plaza
|
|
Staten Island, NY
|
|
12/2007
|
|
252,000
|
|
|
71
|
%
|
|
100.00
|
%
|
|
fee title
|
Fifth Third Center-Cleveland
|
|
Cleveland, OH
|
|
11/2006
|
|
508,000
|
|
|
81
|
%
|
|
100.00
|
%
|
|
fee title
|
Fifth Third Center-Columbus
|
|
Columbus, OH
|
|
12/2007
|
|
331,000
|
|
|
69
|
%
|
|
100.00
|
%
|
|
fee title
|
Plaza at MetroCenter
|
|
Nashville, TN
|
|
12/2007
|
|
361,000
|
|
|
98
|
%
|
|
100.00
|
%
|
|
fee title
|
Riverview Tower
|
|
Knoxville, TN
|
|
10/2005
|
|
334,000
|
|
|
87
|
%
|
|
100.00
|
%
|
|
fee title
|
|
|
|
|
|
|
20,189,000
|
|
|
|
|
|
|
|
|
|
•
|
we believe all of our properties are adequately covered by insurance and suitable for their intended purposes;
|
•
|
we have no plans for any material renovations, improvements or development of our properties, except in accordance with planned budgets;
|
•
|
our properties are located in markets where we are subject to competition in attracting new tenants and retaining current tenants; and
|
•
|
depreciation is provided on a straight-line basis over the estimated useful lives of the buildings.
|
|
|
Number of Leases Expiring (1)
|
|
Rentable
Square Feet
|
|
Current Annualized Base Rent (2)
|
|
Percentage of Total Square Feet
|
|
Percentage of Annualized Base Rent
|
||||||
Year of Lease Expiration
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
||||||||||||
2013
|
|
274
|
|
|
1,713
|
|
|
$
|
35,883
|
|
|
9
|
%
|
|
10
|
%
|
2014
|
|
150
|
|
|
1,755
|
|
|
$
|
36,677
|
|
|
9
|
%
|
|
10
|
%
|
2015
|
|
152
|
|
|
1,764
|
|
|
$
|
36,963
|
|
|
9
|
%
|
|
10
|
%
|
2016
|
|
117
|
|
|
1,251
|
|
|
$
|
28,814
|
|
|
7
|
%
|
|
8
|
%
|
2017
|
|
118
|
|
|
1,846
|
|
|
$
|
44,054
|
|
|
10
|
%
|
|
12
|
%
|
2018
|
|
49
|
|
|
1,298
|
|
|
$
|
30,531
|
|
|
7
|
%
|
|
8
|
%
|
2019
|
|
44
|
|
|
1,500
|
|
|
$
|
34,402
|
|
|
8
|
%
|
|
9
|
%
|
2020
|
|
43
|
|
|
1,270
|
|
|
$
|
31,942
|
|
|
7
|
%
|
|
9
|
%
|
2021
|
|
48
|
|
|
996
|
|
|
$
|
21,584
|
|
|
5
|
%
|
|
6
|
%
|
2022
|
|
38
|
|
|
931
|
|
|
$
|
25,509
|
|
|
5
|
%
|
|
7
|
%
|
•
|
the large size of our portfolio given that some buyers may be willing to pay more for a large portfolio than they are willing to pay for each property in the portfolio separately;
|
•
|
the value related to an in-place workforce;
|
•
|
any other intangible value associated with a going concern; or
|
•
|
the possibility that our shares could trade at a premium to net asset value if we listed them on a national securities exchange.
|
|
2012
|
|
2011
|
||||
Real estate assets, including investments in real estate entities (1)
|
$
|
11.24
|
|
|
$
|
12.24
|
|
Debt, including obligations of real estate investment activities
|
(7.25
|
)
|
|
(7.77
|
)
|
||
Other net assets
|
0.02
|
|
|
0.17
|
|
||
Estimated net asset value per share (2)
|
$
|
4.01
|
|
|
$
|
4.64
|
|
(1)
|
The following are the key assumptions (shown on a weighted average basis) that were used in the discounted cash flow models to estimate the value of the real estate assets we currently own (excluding nine properties valued at $164.1 million that are encumbered by non-recourse debt estimated to be valued at the same amount) within the December 2012 and 2011 valuations:
|
|
2012
|
|
2011
|
||
Exit capitalization rate
|
7.04
|
%
|
|
7.12
|
%
|
Discount rate
|
8.06
|
%
|
|
8.43
|
%
|
Annual market rent growth rate (a)
|
3.52
|
%
|
|
3.46
|
%
|
Annual holding period
|
9.81 years
|
|
|
9.76 years
|
|
(2)
|
Based on 299,624,447 and 297,688,357 common shares and limited partnership units outstanding at December 17, 2012, and December 28, 2011, respectively.
|
•
|
a stockholder would ultimately realize distributions per share equal to our estimated value per share upon liquidation of our assets and settlement of our liabilities or a sale or merger of the Company;
|
•
|
our shares would trade at the estimated value per share on a national securities exchange; or
|
•
|
the methodologies used to estimate our value per share would be acceptable to FINRA or the applicable annual valuation requirements under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Code with respect to employee benefit plans subject to ERISA and other retirement plans or accounts subject to Section 4975 of the Code.
|
|
|
|
|
Common Stockholders
|
|
Preferred Stockholders
|
|
Noncontrolling Interests
|
||||||||||||
|
|
Total
|
|
Cash
|
|
DRP
|
|
|
||||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Quarter
|
|
$
|
7,450
|
|
|
$
|
4,171
|
|
|
$
|
3,268
|
|
|
$
|
—
|
|
|
$
|
11
|
|
2nd Quarter
|
|
7,830
|
|
|
4,177
|
|
|
3,275
|
|
|
—
|
|
|
378
|
|
|||||
3rd Quarter
|
|
7,476
|
|
|
4,204
|
|
|
3,261
|
|
|
—
|
|
|
11
|
|
|||||
4th Quarter
|
|
4,991
|
|
|
2,820
|
|
|
2,161
|
|
|
—
|
|
|
10
|
|
|||||
Total
|
|
$
|
27,747
|
|
|
$
|
15,372
|
|
|
$
|
11,965
|
|
|
$
|
—
|
|
|
$
|
410
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Quarter
|
|
$
|
7,402
|
|
|
$
|
4,069
|
|
|
$
|
3,320
|
|
|
$
|
—
|
|
|
$
|
13
|
|
2nd Quarter
|
|
7,418
|
|
|
4,068
|
|
|
3,336
|
|
|
—
|
|
|
14
|
|
|||||
3rd Quarter
|
|
7,426
|
|
|
4,093
|
|
|
3,321
|
|
|
—
|
|
|
12
|
|
|||||
4th Quarter
|
|
7,442
|
|
|
4,120
|
|
|
3,308
|
|
|
—
|
|
|
14
|
|
|||||
Total
|
|
$
|
29,688
|
|
|
$
|
16,350
|
|
|
$
|
13,285
|
|
|
$
|
—
|
|
|
$
|
53
|
|
Plan Category
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities remaining
available for future issuance
under equity compensation
plans
|
|
||||
Equity compensation plans approved by security holders
|
|
97,250
|
|
|
$
|
7.17
|
|
|
11,900,750
|
|
*
|
Equity compensation plans not approved by security holders
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
Total
|
|
97,250
|
|
|
$
|
7.17
|
|
|
11,900,750
|
|
*
|
Month
|
|
Total Number of
Shares
Redeemed
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares Purchased as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number of Shares That May Yet be
Purchased Under the
Plans or Programs
|
|||||
October 2012
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
(1
|
)
|
November 2012
|
|
219,949
|
|
|
$
|
4.64
|
|
|
219,949
|
|
|
(1
|
)
|
December 2012
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
(1
|
)
|
As of December 31
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
||||||||||
Total assets
|
|
$
|
3,125,294
|
|
|
$
|
3,553,768
|
|
|
$
|
4,149,305
|
|
|
$
|
4,680,640
|
|
|
$
|
5,408,600
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable
|
|
$
|
2,107,380
|
|
|
$
|
2,367,401
|
|
|
$
|
2,720,858
|
|
|
$
|
2,973,617
|
|
|
$
|
3,066,529
|
|
Other liabilities
|
|
227,829
|
|
|
224,376
|
|
|
261,949
|
|
|
279,714
|
|
|
397,529
|
|
|||||
Series A convertible preferred stock
|
|
2,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stockholders’ equity
|
|
781,757
|
|
|
955,692
|
|
|
1,160,251
|
|
|
1,418,139
|
|
|
1,926,608
|
|
|||||
Noncontrolling interests (1)
|
|
5,628
|
|
|
6,299
|
|
|
6,247
|
|
|
9,170
|
|
|
17,934
|
|
|||||
Total liabilities and equity
|
|
$
|
3,125,294
|
|
|
$
|
3,553,768
|
|
|
$
|
4,149,305
|
|
|
$
|
4,680,640
|
|
|
$
|
5,408,600
|
|
Year Ended December 31
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
||||||||||
Rental revenue
|
|
$
|
437,197
|
|
|
$
|
454,007
|
|
|
$
|
462,223
|
|
|
$
|
487,775
|
|
|
$
|
501,410
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss from continuing operations before gain on sale or transfer of assets
|
|
(209,347
|
)
|
|
(152,487
|
)
|
|
(132,975
|
)
|
|
(314,567
|
)
|
|
(143,787
|
)
|
|||||
Income (loss) from discontinued operations
|
|
48,903
|
|
|
(30,773
|
)
|
|
(98,253
|
)
|
|
(124,520
|
)
|
|
(22,118
|
)
|
|||||
Gain on sale or transfer of assets
|
|
8,083
|
|
|
1,385
|
|
|
—
|
|
|
—
|
|
|
5,253
|
|
|||||
Net loss
|
|
(152,361
|
)
|
|
(181,875
|
)
|
|
(231,228
|
)
|
|
(439,087
|
)
|
|
(160,652
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noncontrolling interests in continuing operations
|
|
330
|
|
|
380
|
|
|
586
|
|
|
5,753
|
|
|
259
|
|
|||||
Noncontrolling interests in discontinued operations
|
|
(70
|
)
|
|
45
|
|
|
143
|
|
|
2,702
|
|
|
(28
|
)
|
|||||
Net loss attributable to common stockholders
|
|
$
|
(152,101
|
)
|
|
$
|
(181,450
|
)
|
|
$
|
(230,499
|
)
|
|
$
|
(430,632
|
)
|
|
$
|
(160,421
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by operating activities
|
|
$
|
48,534
|
|
|
$
|
2,363
|
|
|
$
|
49,308
|
|
|
$
|
63,010
|
|
|
$
|
68,484
|
|
Cash provided by (used in) investing activities
|
|
$
|
84,981
|
|
|
$
|
129,040
|
|
|
$
|
33,498
|
|
|
$
|
22,131
|
|
|
$
|
(212,471
|
)
|
Cash (used in) provided by financing activities
|
|
$
|
(135,842
|
)
|
|
$
|
(258,469
|
)
|
|
$
|
(123,250
|
)
|
|
$
|
(243,016
|
)
|
|
$
|
386,498
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted income (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Continuing operations
|
|
$
|
(0.67
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
(0.58
|
)
|
Discontinued operations
|
|
0.16
|
|
|
(0.10
|
)
|
|
(0.33
|
)
|
|
(0.42
|
)
|
|
(0.09
|
)
|
|||||
Basic and diluted loss per common share
|
|
$
|
(0.51
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(1.47
|
)
|
|
$
|
(0.67
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Distributions declared to common stockholders per share
|
|
$
|
0.09
|
|
|
$
|
0.10
|
|
|
$
|
0.17
|
|
|
$
|
0.40
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of properties (2)
|
|
50
|
|
|
57
|
|
|
65
|
|
|
73
|
|
|
74
|
|
|||||
Total rentable square feet
|
|
20,189
|
|
|
22,018
|
|
|
23,767
|
|
|
25,665
|
|
|
25,570
|
|
(1)
|
acquisition fees and expenses;
|
(2)
|
straight line rent amounts, both income and expense;
|
(3)
|
amortization of above- or below-market intangible lease assets and liabilities;
|
(4)
|
amortization of discounts and premiums on debt investments;
|
(5)
|
impairment charges on real estate related assets to the extent not already excluded from net income in the calculation of FFO, such as impairments of non-depreciable properties, loans receivable, and equity and debt investments;
|
(6)
|
gains or losses from the early extinguishment of debt;
|
(7)
|
gains or losses on the extinguishment or sales of hedges, foreign exchange, securities and other derivative holdings except where the trading of such instruments is a fundamental attribute of our operations;
|
(8)
|
gains or losses related to fair value adjustments for interest rate swaps and other derivatives not qualifying for hedge accounting, foreign exchange holdings and other securities;
|
(9)
|
gains or losses related to consolidation from, or deconsolidation to, equity accounting;
|
(10)
|
gains or losses related to contingent purchase price adjustments; and
|
(11)
|
adjustments related to the above items for unconsolidated entities in the application of equity accounting.
|
•
|
Acquisition fees and expenses
. In evaluating investments in real estate, including both business combinations and investments accounted for under the equity method of accounting, management’s investment models and analyses differentiate costs to acquire the investment from the operations derived from the investment. GAAP requires acquisition costs related to business combinations and investments be expensed. We believe by excluding expensed acquisition costs, MFFO provides useful supplemental information that is comparable for our real estate investments and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition expenses include those paid to Behringer Advisors or third parties.
|
•
|
Adjustments for straight line rents and amortization of discounts and premiums on debt investments
. In the application of GAAP, rental receipts and discounts and premiums on debt investments are allocated to periods using various systematic methodologies. This application will result in income recognition that could be significantly different than the underlying contract terms. By adjusting for these items, MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments and aligns results with management’s analysis of operating performance.
|
•
|
Adjustments for amortization of above- or below-market intangible lease assets
. Similar to depreciation and amortization of other real estate related assets that are excluded from FFO, GAAP implicitly assumes that the value of intangibles diminishes predictably over time and that these charges be recognized currently in revenue. Since real estate values and market lease rates in the aggregate have historically risen or fallen with market conditions, management believes that by excluding these charges, MFFO provides useful supplemental information on the realized economics of our real estate assets and aligns results with management’s analysis of operating performance.
|
•
|
Impairment charges and gains or losses related to fair value adjustments for derivatives not qualifying for hedge accounting
. Each of these items relates to a fair value adjustment, which, in part, is based on the impact of current market fluctuations and underlying assessments of general market conditions, which may not be directly attributable to our current operating performance. As these gains or losses relate to underlying long-term assets and liabilities where we are not speculating or trading assets, management believes MFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals rather than changes that may reflect anticipated gains or losses. In particular, because in most circumstances GAAP impairment charges are not allowed to be reversed if the underlying fair values improve or because the timing of impairment charges may lag the onset of certain operating consequences, we believe MFFO provides useful supplemental
|
•
|
Adjustment for gains or losses related to early extinguishment of hedges, debt, consolidation or deconsolidation and contingent purchase price
. Similar to extraordinary items excluded from FFO, these adjustments are not related to our continuing operations. By excluding these items, management believes that MFFO provides supplemental information related to sustainable operations that will be more comparable between other reporting periods and to other real estate operators.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net loss
|
|
$
|
(152,361
|
)
|
|
$
|
(181,875
|
)
|
|
$
|
(231,228
|
)
|
Net loss attributable to noncontrolling interests
|
|
260
|
|
|
425
|
|
|
729
|
|
|||
Adjustments (1):
|
|
|
|
|
|
|
|
|
|
|||
Real estate depreciation and amortization from consolidated properties
|
|
194,908
|
|
|
221,169
|
|
|
238,944
|
|
|||
Real estate depreciation and amortization from unconsolidated properties
|
|
7,021
|
|
|
7,447
|
|
|
7,027
|
|
|||
Impairment of depreciable real estate assets (2)
|
|
98,050
|
|
|
96,066
|
|
|
87,825
|
|
|||
Gain on sale of depreciable real estate
|
|
(28,213
|
)
|
|
(18,086
|
)
|
|
(2,920
|
)
|
|||
Noncontrolling interests share of above adjustments
|
|
(1,152
|
)
|
|
(1,241
|
)
|
|
(1,390
|
)
|
|||
FFO attributable to common stockholders
|
|
$
|
118,513
|
|
|
$
|
123,905
|
|
|
$
|
98,987
|
|
|
|
|
|
|
|
|
||||||
Impairment of goodwill
|
|
—
|
|
|
—
|
|
|
11,470
|
|
|||
Fair value adjustments to derivatives
|
|
—
|
|
|
—
|
|
|
(193
|
)
|
|||
Acquisition expenses
|
|
—
|
|
|
238
|
|
|
—
|
|
|||
Straight-line rent adjustment
|
|
(17,263
|
)
|
|
(25,498
|
)
|
|
(14,383
|
)
|
|||
Amortization of above- and below-market rents, net
|
|
(12,507
|
)
|
|
(18,823
|
)
|
|
(12,323
|
)
|
|||
Gain on troubled debt restructuring
|
|
(35,622
|
)
|
|
(38,911
|
)
|
|
(23,539
|
)
|
|||
Noncontrolling interests share of above adjustments
|
|
94
|
|
|
122
|
|
|
58
|
|
|||
MFFO attributable to common stockholders
|
|
$
|
53,215
|
|
|
$
|
41,033
|
|
|
$
|
60,077
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - basic
|
|
298,372
|
|
|
296,351
|
|
|
294,241
|
|
|||
Weighted average common shares outstanding - diluted (3)
|
|
298,372
|
|
|
296,365
|
|
|
294,241
|
|
|||
|
|
|
|
|
|
|
||||||
Net loss per common share - basic and diluted (3)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(0.78
|
)
|
FFO per common share - basic and diluted
|
|
$
|
0.40
|
|
|
$
|
0.42
|
|
|
$
|
0.34
|
|
MFFO per common share - basic and diluted
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
|
$
|
0.20
|
|
(1)
|
Reflects the adjustments of continuing operations, as well as discontinued operations.
|
(2)
|
Includes impairment of our investments in unconsolidated entities which resulted from a measurable decrease in the fair value of the depreciable real estate held by the joint venture or partnership.
|
(3)
|
There are no dilutive securities for purposes of calculating the net loss per common share.
|
|
|
Distributions Paid to Common Stockholders
|
|
Distributions
Declared
to Common Stockholders per Share (1)
|
|
Total
Distributions
Declared to Common Stockholders
|
|
Net Loss
attributable to Common Stockholders
|
|
FFO attributable to Common Stockholders (2)
|
|
MFFO
attributable to Common Stockholders (2)
|
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Cash
|
|
DRP
|
|
Total
|
|
|
|
|
|
|||||||||||||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
1st Quarter
|
|
$
|
4,158
|
|
|
$
|
3,278
|
|
|
$
|
7,436
|
|
|
$
|
0.025
|
|
|
$
|
7,439
|
|
|
$
|
(27,799
|
)
|
|
$
|
22,244
|
|
|
$
|
7,520
|
|
2nd Quarter
|
|
4,172
|
|
|
3,275
|
|
|
7,447
|
|
|
0.025
|
|
|
7,452
|
|
|
(34,104
|
)
|
|
20,137
|
|
|
13,288
|
|
||||||||
3rd Quarter
|
|
4,192
|
|
|
3,267
|
|
|
7,459
|
|
|
0.025
|
|
|
7,465
|
|
|
(31,227
|
)
|
|
21,880
|
|
|
15,394
|
|
||||||||
4th Quarter
|
|
4,226
|
|
|
3,246
|
|
|
7,472
|
|
|
0.017
|
|
|
4,981
|
|
|
(58,971
|
)
|
|
54,252
|
|
|
17,013
|
|
||||||||
Total
|
|
$
|
16,748
|
|
|
$
|
13,066
|
|
|
$
|
29,814
|
|
|
$
|
0.092
|
|
|
$
|
27,337
|
|
|
$
|
(152,101
|
)
|
|
$
|
118,513
|
|
|
$
|
53,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
1st Quarter
|
|
$
|
4,063
|
|
|
$
|
3,323
|
|
|
$
|
7,386
|
|
|
$
|
0.025
|
|
|
$
|
7,389
|
|
|
$
|
(30,311
|
)
|
|
$
|
31,315
|
|
|
$
|
11,373
|
|
2nd Quarter
|
|
4,066
|
|
|
3,333
|
|
|
7,399
|
|
|
0.025
|
|
|
7,404
|
|
|
(41,505
|
)
|
|
20,739
|
|
|
13,396
|
|
||||||||
3rd Quarter
|
|
4,083
|
|
|
3,327
|
|
|
7,410
|
|
|
0.025
|
|
|
7,414
|
|
|
(104,985
|
)
|
|
18,820
|
|
|
7,535
|
|
||||||||
4th Quarter
|
|
4,111
|
|
|
3,314
|
|
|
7,425
|
|
|
0.025
|
|
|
7,428
|
|
|
(4,649
|
)
|
|
53,031
|
|
|
8,729
|
|
||||||||
Total
|
|
$
|
16,323
|
|
|
$
|
13,297
|
|
|
$
|
29,620
|
|
|
$
|
0.100
|
|
|
$
|
29,635
|
|
|
$
|
(181,450
|
)
|
|
$
|
123,905
|
|
|
$
|
41,033
|
|
|
|
Total
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
||||||||||||||
Notes payable principal (1) (2)
|
|
$
|
2,107,426
|
|
|
$
|
227,373
|
|
|
$
|
264,126
|
|
|
$
|
459,778
|
|
|
$
|
934,387
|
|
|
$
|
130,021
|
|
|
$
|
91,741
|
|
Notes payable principal on note associated with real estate held for sale
|
|
16,400
|
|
|
290
|
|
|
209
|
|
|
223
|
|
|
15,678
|
|
|
—
|
|
|
—
|
|
|||||||
Interest expense (3)
|
|
373,790
|
|
|
116,230
|
|
|
101,817
|
|
|
79,434
|
|
|
47,878
|
|
|
7,604
|
|
|
20,827
|
|
|||||||
Tenant improvement commitments
|
|
47,016
|
|
|
47,016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Leasing commission commitments
|
|
7,649
|
|
|
7,649
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Leases
|
|
26,316
|
|
|
1,153
|
|
|
1,147
|
|
|
1,151
|
|
|
1,158
|
|
|
770
|
|
|
20,937
|
|
|||||||
Total (4)
|
|
$
|
2,578,597
|
|
|
$
|
399,711
|
|
|
$
|
367,299
|
|
|
$
|
540,586
|
|
|
$
|
999,101
|
|
|
$
|
138,395
|
|
|
$
|
133,505
|
|
|
Behringer Harvard REIT I, Inc.
|
|||
|
|
|
|
|
|
|
|
|
|
Dated:
|
March 7, 2013
|
By:
|
/s/ Scott W. Fordham
|
|
|
|
Scott W. Fordham
|
||
|
|
President and Chief Financial Officer
|
March 7, 2013
|
/s/ Scott W. Fordham
|
|
Scott W. Fordham
|
|
President and Chief Financial Officer
|
|
(Principal Executive and Financial Officer)
|
|
|
March 7, 2013
|
/s/ James E. Sharp
|
|
James E. Sharp
|
|
Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
|
|
March 7, 2013
|
/s/ Robert S. Aisner
|
|
Robert S. Aisner
|
|
Director
|
|
|
March 7, 2013
|
/s/ Charles G. Dannis
|
|
Charles G. Dannis
|
|
Chairman of the Board and Director
|
|
|
March 7, 2013
|
/s/ M. Jason Mattox
|
|
M. Jason Mattox
|
|
Director
|
|
|
March 7, 2013
|
/s/ Steven W. Partridge
|
|
Steven W. Partridge
|
|
Director
|
|
|
March 7, 2013
|
/s/ G. Ronald Witten
|
|
G. Ronald Witten
|
|
Director
|
|
Page
|
|
|
Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Statement Schedules
|
|
|
|
|
|
/s/ Deloitte & Touche LLP
|
|
Dallas, Texas
|
March 7, 2013
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Assets
|
|
|
|
|
|
|
||
Real estate
|
|
|
|
|
|
|
||
Land
|
|
$
|
392,736
|
|
|
$
|
438,079
|
|
Buildings and improvements, net
|
|
2,230,283
|
|
|
2,541,858
|
|
||
Real estate under development
|
|
5,950
|
|
|
—
|
|
||
Total real estate
|
|
2,628,969
|
|
|
2,979,937
|
|
||
Cash and cash equivalents
|
|
9,746
|
|
|
12,073
|
|
||
Restricted cash
|
|
78,166
|
|
|
100,580
|
|
||
Accounts receivable, net
|
|
111,950
|
|
|
105,953
|
|
||
Prepaid expenses and other assets
|
|
7,302
|
|
|
5,235
|
|
||
Investments in unconsolidated entities
|
|
52,948
|
|
|
71,280
|
|
||
Deferred financing fees, net
|
|
16,251
|
|
|
22,579
|
|
||
Lease intangibles, net
|
|
205,587
|
|
|
253,630
|
|
||
Other intangible assets, net
|
|
3,657
|
|
|
2,501
|
|
||
Assets associated with real estate held for sale
|
|
10,718
|
|
|
—
|
|
||
Total assets
|
|
$
|
3,125,294
|
|
|
$
|
3,553,768
|
|
|
|
|
|
|
||||
Liabilities and equity
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||
Notes payable
|
|
$
|
2,107,380
|
|
|
$
|
2,367,401
|
|
Accounts payable
|
|
1,652
|
|
|
1,114
|
|
||
Payables to related parties
|
|
1,398
|
|
|
1,397
|
|
||
Acquired below-market leases, net
|
|
51,218
|
|
|
68,778
|
|
||
Distributions payable
|
|
—
|
|
|
2,481
|
|
||
Accrued liabilities
|
|
135,072
|
|
|
130,897
|
|
||
Deferred tax liabilities
|
|
2,192
|
|
|
2,629
|
|
||
Other liabilities
|
|
17,914
|
|
|
17,080
|
|
||
Obligations associated with real estate held for sale
|
|
18,383
|
|
|
—
|
|
||
Total liabilities
|
|
2,335,209
|
|
|
2,591,777
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Series A Convertible Preferred Stock
|
|
2,700
|
|
|
—
|
|
||
|
|
|
|
|
||||
Equity
|
|
|
|
|
|
|
||
Preferred stock, $.0001 par value per share; 17,490,000 and 17,500,000 shares authorized at December 31, 2012 and 2011, respectively, none outstanding
|
|
—
|
|
|
—
|
|
||
Convertible stock, $.0001 par value per share; 1,000 shares authorized, none and 1,000 shares issued and outstanding at December 31, 2012 and 2011, respectively
|
|
—
|
|
|
—
|
|
||
Common stock, $.0001 par value per share; 382,499,000 shares authorized, 299,191,861 and 297,255,771 shares issued and outstanding at December 31, 2012 and 2011, respectively
|
|
30
|
|
|
30
|
|
||
Additional paid-in capital
|
|
2,645,994
|
|
|
2,639,720
|
|
||
Cumulative distributions and net loss attributable to common stockholders
|
|
(1,862,591
|
)
|
|
(1,683,153
|
)
|
||
Accumulated other comprehensive loss
|
|
(1,676
|
)
|
|
(905
|
)
|
||
Stockholders’ equity
|
|
781,757
|
|
|
955,692
|
|
||
Noncontrolling interests
|
|
5,628
|
|
|
6,299
|
|
||
Total equity
|
|
787,385
|
|
|
961,991
|
|
||
Total liabilities and equity
|
|
$
|
3,125,294
|
|
|
$
|
3,553,768
|
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Rental revenue
|
|
$
|
437,197
|
|
|
$
|
454,007
|
|
|
$
|
462,223
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|||
Property operating expenses
|
|
134,107
|
|
|
137,112
|
|
|
143,502
|
|
|||
Interest expense
|
|
129,076
|
|
|
132,544
|
|
|
140,401
|
|
|||
Real estate taxes
|
|
62,516
|
|
|
60,233
|
|
|
61,006
|
|
|||
Property management fees
|
|
12,788
|
|
|
13,230
|
|
|
14,101
|
|
|||
Asset management fees
|
|
9,842
|
|
|
17,787
|
|
|
16,470
|
|
|||
Asset impairment losses
|
|
97,323
|
|
|
33,257
|
|
|
5,116
|
|
|||
Goodwill impairment losses
|
|
—
|
|
|
—
|
|
|
11,470
|
|
|||
General and administrative
|
|
15,480
|
|
|
10,828
|
|
|
9,988
|
|
|||
Depreciation and amortization
|
|
188,216
|
|
|
201,896
|
|
|
201,873
|
|
|||
Total expenses
|
|
649,348
|
|
|
606,887
|
|
|
603,927
|
|
|||
Interest and other income
|
|
940
|
|
|
1,073
|
|
|
1,467
|
|
|||
Gain on troubled debt restructuring
|
|
201
|
|
|
1,008
|
|
|
9,091
|
|
|||
Loss from continuing operations before income taxes, equity in earnings (losses) of investments and gain on sale or transfer of assets
|
|
(211,010
|
)
|
|
(150,799
|
)
|
|
(131,146
|
)
|
|||
Benefit (provision) for income taxes
|
|
(62
|
)
|
|
614
|
|
|
(2,783
|
)
|
|||
Equity in earnings (losses) of investments
|
|
1,725
|
|
|
(2,302
|
)
|
|
954
|
|
|||
Loss from continuing operations before gain on sale or transfer of assets
|
|
(209,347
|
)
|
|
(152,487
|
)
|
|
(132,975
|
)
|
|||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|||
Income (loss) from discontinued operations
|
|
28,773
|
|
|
(47,474
|
)
|
|
(101,173
|
)
|
|||
Gain on sale or transfer of discontinued operations
|
|
20,130
|
|
|
16,701
|
|
|
2,920
|
|
|||
Income (loss) from discontinued operations
|
|
48,903
|
|
|
(30,773
|
)
|
|
(98,253
|
)
|
|||
Gain on sale or transfer of assets
|
|
8,083
|
|
|
1,385
|
|
|
—
|
|
|||
Net loss
|
|
(152,361
|
)
|
|
(181,875
|
)
|
|
(231,228
|
)
|
|||
Net (income) loss attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|||
Noncontrolling interests in continuing operations
|
|
330
|
|
|
380
|
|
|
586
|
|
|||
Noncontrolling interests in discontinued operations
|
|
(70
|
)
|
|
45
|
|
|
143
|
|
|||
Net loss attributable to common stockholders
|
|
$
|
(152,101
|
)
|
|
$
|
(181,450
|
)
|
|
$
|
(230,499
|
)
|
Basic and diluted weighted average common shares outstanding
|
|
298,372,324
|
|
|
296,351,253
|
|
|
294,241,424
|
|
|||
Basic and diluted income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(0.67
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.45
|
)
|
Discontinued operations
|
|
0.16
|
|
|
(0.10
|
)
|
|
(0.33
|
)
|
|||
Basic and diluted loss per common share
|
|
$
|
(0.51
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(0.78
|
)
|
Net income (loss) attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(200,934
|
)
|
|
$
|
(150,722
|
)
|
|
$
|
(132,389
|
)
|
Discontinued operations
|
|
48,833
|
|
|
(30,728
|
)
|
|
(98,110
|
)
|
|||
Net loss attributable to common stockholders
|
|
$
|
(152,101
|
)
|
|
$
|
(181,450
|
)
|
|
$
|
(230,499
|
)
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|||
Net loss
|
|
$
|
(152,361
|
)
|
|
$
|
(181,875
|
)
|
|
$
|
(231,228
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||
Reclassification of unrealized loss on interest rate derivatives to earnings
|
|
—
|
|
|
—
|
|
|
1,440
|
|
|||
Unrealized gain (loss) on interest rate derivatives
|
|
(772
|
)
|
|
(906
|
)
|
|
3,269
|
|
|||
Total other comprehensive income (loss)
|
|
(772
|
)
|
|
(906
|
)
|
|
4,709
|
|
|||
Comprehensive loss
|
|
(153,133
|
)
|
|
(182,781
|
)
|
|
(226,519
|
)
|
|||
Comprehensive loss attributable to noncontrolling interests
|
|
261
|
|
|
426
|
|
|
738
|
|
|||
Comprehensive loss attributable to common stockholders
|
|
$
|
(152,872
|
)
|
|
$
|
(182,355
|
)
|
|
$
|
(225,781
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
Distributions
and
Net Loss Attributable to Common Stockholders
|
|
|
|
|
|
|
||||||||||||||||
|
Convertible Stock
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
|
Accumulated Other Comprehensive Loss
|
|
|
|
|
|||||||||||||||||||||
|
Number of Shares
|
|
Par Value
|
|
Number of Shares
|
|
Par Value
|
|
|
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance at January 1, 2010
|
1
|
|
|
$
|
—
|
|
|
292,494
|
|
|
$
|
29
|
|
|
$
|
2,612,961
|
|
|
$
|
(1,190,133
|
)
|
|
$
|
(4,718
|
)
|
|
$
|
9,170
|
|
|
$
|
1,427,309
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(230,499
|
)
|
|
—
|
|
|
(729
|
)
|
|
(231,228
|
)
|
|||||||
Reclassifications of unrealized loss on interest rate swaps to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,447
|
|
|
(7
|
)
|
|
1,440
|
|
|||||||
Unrealized gain on interest rate swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,271
|
|
|
(2
|
)
|
|
3,269
|
|
|||||||
Redemption of common stock
|
—
|
|
|
—
|
|
|
(1,017
|
)
|
|
—
|
|
|
(7,164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,164
|
)
|
|||||||
Distributions declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,436
|
)
|
|
—
|
|
|
(2,185
|
)
|
|
(53,621
|
)
|
|||||||
Shares issued pursuant to Distribution Reinvestment Plan
|
—
|
|
|
—
|
|
|
3,799
|
|
|
—
|
|
|
26,506
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,506
|
|
|||||||
Cost of share issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||||
Balance at December 31, 2010
|
1
|
|
|
$
|
—
|
|
|
295,276
|
|
|
$
|
29
|
|
|
$
|
2,632,290
|
|
|
$
|
(1,472,068
|
)
|
|
$
|
—
|
|
|
$
|
6,247
|
|
|
$
|
1,166,498
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(181,450
|
)
|
|
—
|
|
|
(425
|
)
|
|
(181,875
|
)
|
|||||||
Unrealized loss on interest rate derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(905
|
)
|
|
(1
|
)
|
|
(906
|
)
|
|||||||
Redemption of common stock
|
—
|
|
|
—
|
|
|
(942
|
)
|
|
—
|
|
|
(4,288
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,288
|
)
|
|||||||
Distributions declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,635
|
)
|
|
—
|
|
|
(53
|
)
|
|
(29,688
|
)
|
|||||||
Shares issued pursuant to Distribution Reinvestment Plan
|
—
|
|
|
—
|
|
|
2,922
|
|
|
1
|
|
|
13,296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,297
|
|
|||||||
Cost of share issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,567
|
)
|
|
—
|
|
|
—
|
|
|
531
|
|
|
(1,036
|
)
|
|||||||
Balance at December 31, 2011
|
1
|
|
|
$
|
—
|
|
|
297,256
|
|
|
$
|
30
|
|
|
$
|
2,639,720
|
|
|
$
|
(1,683,153
|
)
|
|
$
|
(905
|
)
|
|
$
|
6,299
|
|
|
$
|
961,991
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(152,101
|
)
|
|
—
|
|
|
(260
|
)
|
|
(152,361
|
)
|
|||||||
Unrealized loss on interest rate derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(771
|
)
|
|
(1
|
)
|
|
(772
|
)
|
|||||||
Redemption of common stock
|
—
|
|
|
—
|
|
|
(880
|
)
|
|
—
|
|
|
(4,083
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,083
|
)
|
|||||||
Cancellation of convertible stock
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Distributions declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,337
|
)
|
|
—
|
|
|
(410
|
)
|
|
(27,747
|
)
|
|||||||
Shares issued pursuant to Distribution Reinvestment Plan
|
—
|
|
|
—
|
|
|
2,816
|
|
|
—
|
|
|
13,066
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,066
|
|
|||||||
Cost of share issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||||
Issuance of Series A Convertible Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,700
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,700
|
)
|
|||||||
Balance at December 31, 2012
|
—
|
|
|
$
|
—
|
|
|
299,192
|
|
|
$
|
30
|
|
|
$
|
2,645,994
|
|
|
$
|
(1,862,591
|
)
|
|
$
|
(1,676
|
)
|
|
$
|
5,628
|
|
|
$
|
787,385
|
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|||
Net loss
|
|
$
|
(152,361
|
)
|
|
$
|
(181,875
|
)
|
|
$
|
(231,228
|
)
|
Adjustments to reconcile net loss to net cash flows provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Asset impairment losses
|
|
98,050
|
|
|
93,080
|
|
|
87,826
|
|
|||
Goodwill impairment losses
|
|
—
|
|
|
—
|
|
|
11,470
|
|
|||
Gain on sale or transfer of assets
|
|
(8,083
|
)
|
|
(1,385
|
)
|
|
—
|
|
|||
Gain on sale or transfer of discontinued operations
|
|
(20,130
|
)
|
|
(16,701
|
)
|
|
(2,920
|
)
|
|||
Gain on troubled debt restructuring
|
|
(35,635
|
)
|
|
(39,066
|
)
|
|
(23,898
|
)
|
|||
(Gain) loss on derivatives
|
|
66
|
|
|
—
|
|
|
(193
|
)
|
|||
Depreciation and amortization
|
|
195,077
|
|
|
221,169
|
|
|
238,944
|
|
|||
Amortization of lease intangibles
|
|
757
|
|
|
1,831
|
|
|
1,629
|
|
|||
Amortization of above/below market rent
|
|
(11,741
|
)
|
|
(18,110
|
)
|
|
(11,850
|
)
|
|||
Amortization of deferred financing and mark-to-market costs
|
|
7,569
|
|
|
5,810
|
|
|
8,316
|
|
|||
Equity in (earnings) losses of investments
|
|
(1,725
|
)
|
|
2,302
|
|
|
(954
|
)
|
|||
Ownership portion of management fees from unconsolidated companies
|
|
446
|
|
|
—
|
|
|
—
|
|
|||
Distributions from investments
|
|
581
|
|
|
567
|
|
|
934
|
|
|||
Change in accounts receivable
|
|
(13,632
|
)
|
|
(25,705
|
)
|
|
(10,451
|
)
|
|||
Change in prepaid expenses and other assets
|
|
(1,945
|
)
|
|
360
|
|
|
(1,131
|
)
|
|||
Change in lease commissions
|
|
(21,942
|
)
|
|
(33,783
|
)
|
|
(24,853
|
)
|
|||
Change in other lease intangibles
|
|
(2,508
|
)
|
|
(3,291
|
)
|
|
(2,300
|
)
|
|||
Change in other intangible assets
|
|
(1,445
|
)
|
|
—
|
|
|
—
|
|
|||
Change in accounts payable
|
|
436
|
|
|
(406
|
)
|
|
(74
|
)
|
|||
Change in accrued liabilities
|
|
14,880
|
|
|
(3,499
|
)
|
|
6,948
|
|
|||
Change in other liabilities
|
|
1,469
|
|
|
1,885
|
|
|
2,742
|
|
|||
Change in payables to related parties
|
|
350
|
|
|
(820
|
)
|
|
351
|
|
|||
Cash provided by operating activities
|
|
48,534
|
|
|
2,363
|
|
|
49,308
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|||
Return of investments
|
|
2,278
|
|
|
780
|
|
|
899
|
|
|||
Purchases of real estate
|
|
—
|
|
|
(1,035
|
)
|
|
—
|
|
|||
Investments in unconsolidated entities
|
|
(1,330
|
)
|
|
(4,057
|
)
|
|
—
|
|
|||
Capital expenditures for real estate
|
|
(67,301
|
)
|
|
(58,609
|
)
|
|
(43,972
|
)
|
|||
Capital expenditures for real estate under development
|
|
(2,065
|
)
|
|
—
|
|
|
(6,607
|
)
|
|||
Proceeds from notes receivable
|
|
—
|
|
|
10,355
|
|
|
643
|
|
|||
Proceeds from sale of discontinued operations
|
|
111,142
|
|
|
89,998
|
|
|
55,271
|
|
|||
Proceeds from sale of assets
|
|
21,235
|
|
|
92,982
|
|
|
—
|
|
|||
Change in restricted cash
|
|
21,022
|
|
|
(1,374
|
)
|
|
27,264
|
|
|||
Cash provided by investing activities
|
|
84,981
|
|
|
129,040
|
|
|
33,498
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|||
Financing costs
|
|
(1,550
|
)
|
|
(14,273
|
)
|
|
(225
|
)
|
|||
Proceeds from notes payable
|
|
34,501
|
|
|
557,500
|
|
|
—
|
|
|||
Payments on notes payable
|
|
(147,494
|
)
|
|
(780,939
|
)
|
|
(83,184
|
)
|
|||
Payments on capital lease obligations
|
|
(44
|
)
|
|
(82
|
)
|
|
(75
|
)
|
|||
Redemptions of common stock
|
|
(4,083
|
)
|
|
(4,288
|
)
|
|
(7,164
|
)
|
|||
Offering costs
|
|
(9
|
)
|
|
(11
|
)
|
|
(13
|
)
|
|||
Distributions to common stockholders
|
|
(16,748
|
)
|
|
(16,323
|
)
|
|
(30,396
|
)
|
|||
Distributions to noncontrolling interests
|
|
(415
|
)
|
|
(53
|
)
|
|
(2,193
|
)
|
|||
Cash used in financing activities
|
|
(135,842
|
)
|
|
(258,469
|
)
|
|
(123,250
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
|
(2,327
|
)
|
|
(127,066
|
)
|
|
(40,444
|
)
|
|||
Cash and cash equivalents at beginning of period
|
|
12,073
|
|
|
139,139
|
|
|
179,583
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
9,746
|
|
|
$
|
12,073
|
|
|
$
|
139,139
|
|
2013
|
$
|
19,929
|
|
2014
|
$
|
15,928
|
|
2015
|
$
|
10,938
|
|
2016
|
$
|
8,047
|
|
2017
|
$
|
4,802
|
|
|
|
|
|
Lease Intangibles
|
||||||||||||
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||
|
|
Buildings and Improvements
|
|
Other Lease Intangibles
|
|
Acquired Above-Market Leases
|
|
Acquired Below-Market Leases
|
||||||||
as of December 31, 2012
|
|
|
|
|
||||||||||||
Cost
|
|
$
|
2,823,672
|
|
|
$
|
420,399
|
|
|
$
|
27,539
|
|
|
$
|
(124,060
|
)
|
Less: accumulated depreciation and amortization
|
|
(593,389
|
)
|
|
(224,705
|
)
|
|
(17,646
|
)
|
|
72,842
|
|
||||
Net
|
|
$
|
2,230,283
|
|
|
$
|
195,694
|
|
|
$
|
9,893
|
|
|
$
|
(51,218
|
)
|
|
|
|
|
Lease Intangibles
|
||||||||||||
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||
|
|
Buildings and Improvements
|
|
Other Lease Intangibles
|
|
Acquired Above-Market Leases
|
|
Acquired Below-Market Leases
|
||||||||
as of December 31, 2011
|
|
|
|
|
||||||||||||
Cost
|
|
$
|
3,159,260
|
|
|
$
|
468,960
|
|
|
$
|
34,509
|
|
|
$
|
(141,795
|
)
|
Less: accumulated depreciation and amortization
|
|
(617,402
|
)
|
|
(229,211
|
)
|
|
(20,628
|
)
|
|
73,017
|
|
||||
Net
|
|
$
|
2,541,858
|
|
|
$
|
239,749
|
|
|
$
|
13,881
|
|
|
$
|
(68,778
|
)
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Straight-line rental revenue receivable
|
|
$
|
102,789
|
|
|
$
|
94,541
|
|
Tenant receivables
|
|
9,374
|
|
|
11,933
|
|
||
Non-tenant receivables
|
|
1,050
|
|
|
938
|
|
||
Allowance for doubtful accounts
|
|
(1,263
|
)
|
|
(1,459
|
)
|
||
Total
|
|
$
|
111,950
|
|
|
$
|
105,953
|
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Cost
|
|
$
|
4,422
|
|
|
$
|
2,977
|
|
Less: accumulated depreciation and amortization
|
|
(765
|
)
|
|
(476
|
)
|
||
Net
|
|
$
|
3,657
|
|
|
$
|
2,501
|
|
2013
|
$
|
629
|
|
2014
|
$
|
629
|
|
2015
|
$
|
374
|
|
2016
|
$
|
119
|
|
2017
|
$
|
119
|
|
|
|
|
|
Basis of Fair Value Measurements
|
||||||||||||
|
|
|
|
Quoted Prices In Active Markets for Identical Items (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
|
Total Fair Value
|
|
|
|
|||||||||||
Description
|
|
|
|
|
||||||||||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments
|
|
$
|
(1,427
|
)
|
|
$
|
—
|
|
|
$
|
(1,427
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
$
|
(621
|
)
|
|
$
|
—
|
|
|
$
|
(621
|
)
|
|
$
|
—
|
|
|
|
|
|
Basis of Fair Value Measurements
|
|
|
||||||||||||||
Description
|
|
Fair Value
of Assets at Impairment
|
|
Quoted Prices
In Active
Markets for
Identical Items
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Losses (1) (2)
|
||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate
|
|
$
|
303,254
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
303,254
|
|
|
$
|
(97,323
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate
|
|
$
|
178,500
|
|
|
$
|
—
|
|
|
$
|
31,900
|
|
|
$
|
146,600
|
|
|
$
|
(53,970
|
)
|
Investments in unconsolidated entities
|
|
$
|
6,304
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,304
|
|
|
$
|
(276
|
)
|
(1)
|
Excludes approximately
$0.7 million
and
$38.8 million
in impairment losses of our discontinued operations as of
December 31, 2012
and
2011
, respectively.
|
(2)
|
The
December 31, 2011
amount includes approximately
$21.0 million
in impairment losses for properties that were disposed of or held for sale and included in discontinued operations subsequent to
December 31, 2011
.
|
|
|
Fair Value of Assets at Impairment
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
|
||
Real estate on which impairment losses were recognized
|
|
$
|
303,254
|
|
|
Discounted Cash Flow
|
|
Discount rate
|
|
7.05% - 13.00%
|
|
|
|
|
|
|
Terminal capitalization rate
|
|
6.10% - 10.00%
|
||
|
|
|
|
|
|
Market rent growth rate
|
|
0% - 3.00%
|
||
|
|
|
|
|
|
Expense growth rate
|
|
0% - 3.00%
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||||
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Notes Payable
|
|
$
|
2,107,380
|
|
|
$
|
2,128,724
|
|
|
$
|
2,367,401
|
|
|
$
|
2,269,235
|
|
|
|
Date of Disposal
|
|
|
|
Rentable Square Footage (unaudited)
|
|
Contract Sales Price
|
|
Proceeds from Sale (1)
|
|||||
Property Name
|
|
|
Location
|
|
|
|
|||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Minnesota Center (2)
|
|
1/5/2012
|
|
Bloomington, MN
|
|
276
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Southwest Center
|
|
5/15/2012
|
|
Tigard, OR
|
|
89
|
|
|
10,600
|
|
|
10,334
|
|
||
4440 El Camino Real
|
|
6/28/2012
|
|
Los, Altos, CA
|
|
97
|
|
|
48,000
|
|
|
46,988
|
|
||
One City Centre
|
|
9/20/2012
|
|
Houston, TX
|
|
609
|
|
|
131,000
|
|
|
126,939
|
|
||
17655 Waterview (2)
|
|
12/4/2012
|
|
Richardson, TX
|
|
230
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
1,301
|
|
|
$
|
189,600
|
|
|
$
|
184,261
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Executive Park (2)
|
|
1/6/2011
|
|
Louisville, KY
|
|
109
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Westway One
|
|
1/27/2011
|
|
Houston, TX
|
|
144
|
|
|
31,000
|
|
|
30,606
|
|
||
Grandview II (2)
|
|
2/25/2011
|
|
Birmingham, AL
|
|
149
|
|
|
—
|
|
|
—
|
|
||
AMEC Paragon I & II
|
|
6/30/2011
|
|
Houston, TX
|
|
227
|
|
|
25,000
|
|
|
22,108
|
|
||
Downtown Plaza
|
|
7/22/2011
|
|
Long Beach, CA
|
|
100
|
|
|
12,800
|
|
|
12,639
|
|
||
1300 Main
|
|
8/17/2011
|
|
Houston, TX
|
|
507
|
|
|
38,000
|
|
|
34,556
|
|
||
Gateway 12 & 23 (3)
|
|
8/24/2011
|
|
Diamond Bar, CA
|
|
113
|
|
|
19,400
|
|
|
18,986
|
|
||
Resurgens Plaza (2)
|
|
12/6/2011
|
|
Atlanta, GA
|
|
400
|
|
|
—
|
|
|
—
|
|
||
Additional costs related to prior year sales
|
|
|
|
|
|
|
|
|
|
(143
|
)
|
||||
|
|
|
|
|
|
1,749
|
|
|
$
|
126,200
|
|
|
$
|
118,752
|
|
(1)
|
In 2012, proceeds from sale are inclusive of approximately
$73.1 million
in debt assumed by the purchasers and approximately
$108.1 million
in debt paid off with the proceeds of the sale of the properties. In 2011, proceeds from sale are inclusive of approximately
$28.8 million
in debt assumed by the purchasers and approximately
$53.3 million
in debt paid off with the proceeds of the sale of the properties.
|
(2)
|
Ownership of each of these properties was transferred to the lender pursuant to a foreclosure or deed-in-lieu of foreclosure.
|
(3)
|
Gateway 12 and Gateway 23 were sold together and the sales price and proceeds from sale reflect the combined price and proceeds for the properties.
|
|
|
Ownership Interest
|
|
|
|
|
||||||
Property Name
|
|
December 31, 2012
|
|
December 31, 2011
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Wanamaker Building
|
|
60.00%
|
|
60.00%
|
|
$
|
49,332
|
|
|
$
|
48,170
|
|
200 South Wacker
|
|
9.87%
|
|
9.82%
|
|
3,616
|
|
|
2,814
|
|
||
Alamo Plaza (1)
|
|
0.00%
|
|
40.66%
|
|
—
|
|
|
13,992
|
|
||
St. Louis Place (1)
|
|
0.00%
|
|
35.71%
|
|
—
|
|
|
6,304
|
|
||
Total
|
|
|
|
|
|
$
|
52,948
|
|
|
$
|
71,280
|
|
(1)
|
Each of the TIC investors, including us, was a borrower under the debt agreements associated with the TIC properties. As such, our portion of debt associated with Alamo Plaza of approximately
$12.5 million
and our portion of debt associated with St. Louis Place of approximately
$6.5 million
was included in notes payable on our consolidated balance sheet at December 31, 2011.
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||
Noncontrolling interests in real estate properties
|
|
$
|
4,929
|
|
|
$
|
5,331
|
|
Limited partnership units
|
|
709
|
|
|
970
|
|
||
IPC (US), Inc. preferred shares
|
|
(10
|
)
|
|
(2
|
)
|
||
Total
|
|
$
|
5,628
|
|
|
$
|
6,299
|
|
Year
|
|
Amount
|
||
2013
|
|
$
|
293,023
|
|
2014
|
|
265,512
|
|
|
2015
|
|
237,960
|
|
|
2016
|
|
209,574
|
|
|
2017
|
|
174,771
|
|
|
Thereafter
|
|
516,263
|
|
|
Total
|
|
$
|
1,697,103
|
|
Year
|
|
Amount
|
||
2013
|
|
$
|
1,153
|
|
2014
|
|
1,147
|
|
|
2015
|
|
1,151
|
|
|
2016
|
|
1,158
|
|
|
2017
|
|
770
|
|
|
Thereafter
|
|
20,937
|
|
|
Total
|
|
$
|
26,316
|
|
|
Year Ended December 31,
|
||||||
|
2012
|
|
2011
|
||||
Deferred tax assets:
|
|
|
|
|
|
||
C-Corp net operating losses (IPC)
|
$
|
19,532
|
|
|
$
|
19,532
|
|
Net operating losses
|
2,626
|
|
|
2,368
|
|
||
Depreciation and amortization
|
2,402
|
|
|
2,141
|
|
||
Other
|
358
|
|
|
3
|
|
||
Deferred tax assets, gross
|
24,918
|
|
|
24,044
|
|
||
Valuation allowance
|
(22,315
|
)
|
|
(22,385
|
)
|
||
Deferred tax assets, net
|
$
|
2,603
|
|
|
$
|
1,659
|
|
Deferred tax liabilities:
|
|
|
|
|
|
||
Deferred revenue
|
$
|
645
|
|
|
$
|
518
|
|
Depreciation and amortization
|
3,652
|
|
|
3,469
|
|
||
Other
|
7
|
|
|
5
|
|
||
Deferred tax liabilities
|
$
|
4,304
|
|
|
$
|
3,992
|
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
|
||
Deferred tax assets
|
$
|
491
|
|
|
$
|
296
|
|
Deferred tax liabilities
|
$
|
2,192
|
|
|
$
|
2,629
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Balance at beginning of year
|
$
|
22,385
|
|
|
$
|
22,160
|
|
|
$
|
21,605
|
|
Additions charged to expense
|
—
|
|
|
225
|
|
|
1,146
|
|
|||
Deductions
|
(70
|
)
|
|
—
|
|
|
(591
|
)
|
|||
Balance at end of year
|
$
|
22,315
|
|
|
$
|
22,385
|
|
|
$
|
22,160
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Net loss attributable to common stockholders
|
$
|
(152,101
|
)
|
|
$
|
(181,450
|
)
|
|
$
|
(230,499
|
)
|
Depreciation and amortization
|
57,385
|
|
|
67,294
|
|
|
73,114
|
|
|||
Impairment losses
|
73,431
|
|
|
91,788
|
|
|
66,267
|
|
|||
GAAP rent adjustments
|
(22,093
|
)
|
|
(40,753
|
)
|
|
(15,510
|
)
|
|||
Loss on dispositions
|
(31,538
|
)
|
|
(121,676
|
)
|
|
(5,808
|
)
|
|||
Gain on troubled debt restructuring
|
(35,757
|
)
|
|
(38,888
|
)
|
|
(30,526
|
)
|
|||
Unconsolidated tax entities - primarily IPC (US), Inc.
|
48,940
|
|
|
21,032
|
|
|
52,614
|
|
|||
Other
|
(1,684
|
)
|
|
(997
|
)
|
|
1,653
|
|
|||
Taxable loss (1)
|
$
|
(63,417
|
)
|
|
$
|
(203,650
|
)
|
|
$
|
(88,695
|
)
|
(1)
|
Represents our projected taxable loss. As stated above, we elected for our subsidiary, IPC (US), Inc., to be taxed as a REIT beginning with the 2008 tax year. As a result of this election, Behringer Harvard REIT I, Inc. and IPC (US), Inc. file separate tax returns. Our taxable loss includes amounts related to IPC (US), Inc.’s taxable income only to the extent we receive a taxable dividend from IPC (US), Inc. The projected taxable losses for IPC (US), Inc. for the years ended
December 31, 2012
,
2011
, and
2010
were approximately
$3.9 million
,
$8.8 million
and
$25.0 million
, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
$
|
(119
|
)
|
State
|
(694
|
)
|
|
272
|
|
|
(507
|
)
|
|||
Total current
|
(694
|
)
|
|
239
|
|
|
(626
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
181
|
|
|
(42
|
)
|
|
(34
|
)
|
|||
State
|
451
|
|
|
417
|
|
|
(2,123
|
)
|
|||
Total deferred
|
632
|
|
|
375
|
|
|
(2,157
|
)
|
|||
Total income tax benefit (provision) - continuing operations
|
$
|
(62
|
)
|
|
$
|
614
|
|
|
$
|
(2,783
|
)
|
Type/Description
|
|
Notional Value
|
|
Index
|
|
Strike Rate
|
|
Maturity
|
||
Interest rate cap - cash flow hedge
|
|
$
|
90,000
|
|
|
one-month LIBOR
|
|
1.75% - 2.00%
|
|
August 15, 2013
|
Interest rate cap - cash flow hedge
|
|
$
|
70,000
|
|
|
one-month LIBOR
|
|
1.75% - 2.00%
|
|
August 15, 2013
|
Interest rate swap - cash flow hedge
|
|
$
|
150,000
|
|
|
one-month LIBOR
|
|
0.79%
|
|
October 25, 2014
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate caps
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
—
|
|
|
—
|
|
|
(1,427
|
)
|
|
(621
|
)
|
||||
Total derivatives
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
(1,427
|
)
|
|
$
|
(621
|
)
|
|
Gain (loss) recognized in OCI on derivative (effective portion)
for the Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Interest rate caps
|
$
|
34
|
|
|
$
|
(285
|
)
|
|
$
|
—
|
|
Interest rate swaps
|
(806
|
)
|
|
(621
|
)
|
|
3,269
|
|
|||
Total
|
$
|
(772
|
)
|
|
$
|
(906
|
)
|
|
$
|
3,269
|
|
|
Amount of loss reclassified from OCI into income (effective portion)
for the Year Ended December 31,
|
||||||||||
Location
|
2012
|
|
2011
|
|
2010
|
||||||
Interest expense (1)
|
$
|
903
|
|
|
$
|
149
|
|
|
$
|
3,574
|
|
Interest expense (2)
|
—
|
|
|
—
|
|
|
1,440
|
|
|||
Total
|
$
|
903
|
|
|
$
|
149
|
|
|
$
|
5,014
|
|
(1)
|
Increase in fair value as a result of accrued interest associated with our swap and cap transactions are recorded in accumulated OCI and subsequently reclassified into income. Such amounts are shown net in the statements of equity and offset dollar for dollar.
|
(2)
|
Represents amortization of discontinued cash flow hedge.
|
|
|
|
Amount of loss recognized in income on derivative
for the Year Ended December 31,
|
||||||||||
|
Location
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest rate swap
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
151
|
|
Total
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
151
|
|
Principal payments due in: (1)
|
|
||
2013
|
$
|
227,373
|
|
2014
|
264,126
|
|
|
2015
|
459,778
|
|
|
2016
|
934,387
|
|
|
2017
|
130,021
|
|
|
Thereafter
|
91,741
|
|
|
unamortized discount
|
(46
|
)
|
|
Total
|
$
|
2,107,380
|
|
|
|
|
Common Stockholders
|
|
Preferred
|
|
Noncontrolling
|
||||||||||||
|
Total
|
|
Cash
|
|
DRP
|
|
Stockholders
|
|
Interests
|
||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Quarter
|
$
|
7,450
|
|
|
$
|
4,171
|
|
|
$
|
3,268
|
|
|
$
|
—
|
|
|
$
|
11
|
|
2nd Quarter
|
7,830
|
|
|
4,177
|
|
|
3,275
|
|
|
—
|
|
|
378
|
|
|||||
3rd Quarter
|
7,476
|
|
|
4,204
|
|
|
3,261
|
|
|
—
|
|
|
11
|
|
|||||
4th Quarter
|
4,991
|
|
|
2,820
|
|
|
2,161
|
|
|
—
|
|
|
10
|
|
|||||
Total
|
$
|
27,747
|
|
|
$
|
15,372
|
|
|
$
|
11,965
|
|
|
$
|
—
|
|
|
$
|
410
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1st Quarter
|
$
|
7,402
|
|
|
$
|
4,069
|
|
|
$
|
3,320
|
|
|
$
|
—
|
|
|
$
|
13
|
|
2nd Quarter
|
7,418
|
|
|
4,068
|
|
|
3,336
|
|
|
—
|
|
|
14
|
|
|||||
3rd Quarter
|
7,426
|
|
|
4,093
|
|
|
3,321
|
|
|
—
|
|
|
12
|
|
|||||
4th Quarter
|
7,442
|
|
|
4,120
|
|
|
3,308
|
|
|
—
|
|
|
14
|
|
|||||
Total
|
$
|
29,688
|
|
|
$
|
16,350
|
|
|
$
|
13,285
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest paid, net of amounts capitalized
|
$
|
118,530
|
|
|
$
|
143,466
|
|
|
$
|
163,739
|
|
Income taxes paid
|
$
|
1,232
|
|
|
$
|
2,311
|
|
|
$
|
2,063
|
|
Non-cash investing activities:
|
|
|
|
|
|
|
|
|
|||
Property and equipment additions in accounts payable and accrued liabilities
|
$
|
25,751
|
|
|
$
|
27,354
|
|
|
$
|
19,204
|
|
Transfer of real estate and lease intangibles through cancellation of debt
|
$
|
32,700
|
|
|
$
|
65,870
|
|
|
$
|
57,649
|
|
Transfer of investment through cancellation of debt
|
$
|
4,259
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash financing activities:
|
|
|
|
|
|
|
|
|
|||
Common stock issued in distribution reinvestment plan
|
$
|
13,066
|
|
|
$
|
13,297
|
|
|
$
|
26,506
|
|
Mortgage notes assumed by the Company
|
$
|
—
|
|
|
$
|
2,091
|
|
|
$
|
—
|
|
Accrual for distributions declared
|
$
|
—
|
|
|
$
|
2,481
|
|
|
$
|
2,464
|
|
Mortgage notes assumed by purchaser
|
$
|
73,119
|
|
|
$
|
28,754
|
|
|
$
|
89,849
|
|
Cancellation of debt through transfer of real estate
|
$
|
59,251
|
|
|
$
|
103,737
|
|
|
$
|
66,368
|
|
Cancellation of debt through discounted payoff
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,475
|
|
Issuance of Series A Convertible Preferred Stock
|
$
|
2,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Rental revenue
|
$
|
18,437
|
|
|
$
|
42,229
|
|
|
$
|
90,529
|
|
Expenses
|
|
|
|
|
|
|
|
|
|||
Property operating expenses
|
5,341
|
|
|
16,140
|
|
|
29,082
|
|
|||
Interest expense
|
8,448
|
|
|
23,026
|
|
|
39,431
|
|
|||
Real estate taxes
|
2,771
|
|
|
8,305
|
|
|
11,701
|
|
|||
Property and asset management fees
|
1,158
|
|
|
3,327
|
|
|
6,173
|
|
|||
Asset impairment losses
|
727
|
|
|
59,823
|
|
|
82,709
|
|
|||
Depreciation and amortization
|
6,861
|
|
|
19,273
|
|
|
37,071
|
|
|||
Total expenses
|
25,306
|
|
|
129,894
|
|
|
206,167
|
|
|||
Benefit (provision) for income taxes
|
(5
|
)
|
|
—
|
|
|
30
|
|
|||
Gain on troubled debt restructuring
|
35,421
|
|
|
37,903
|
|
|
14,448
|
|
|||
Interest and other income (expense)
|
226
|
|
|
2,288
|
|
|
(13
|
)
|
|||
Gain (loss) from discontinued operations
|
$
|
28,773
|
|
|
$
|
(47,474
|
)
|
|
$
|
(101,173
|
)
|
|
|
December 31, 2012
|
||
Land
|
|
$
|
1,384
|
|
Buildings and improvements, net
|
|
6,592
|
|
|
Accounts receivable and other assets, net
|
|
1,884
|
|
|
Lease intangibles, net
|
|
858
|
|
|
Assets associated with real estate held for sale
|
|
$
|
10,718
|
|
|
|
|
||
Notes payable
|
|
$
|
16,400
|
|
Other liabilities
|
|
1,983
|
|
|
Obligations associated with real estate held for sale
|
|
$
|
18,383
|
|
2012 Quarters Ended
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Rental revenue
|
|
$
|
107,671
|
|
|
$
|
108,332
|
|
|
$
|
110,544
|
|
|
$
|
110,650
|
|
Loss from continuing operations before gain on sale or transfer of assets
|
|
$
|
(32,429
|
)
|
|
$
|
(44,728
|
)
|
|
$
|
(34,200
|
)
|
|
$
|
(97,990
|
)
|
Income from discontinued operations
|
|
4,227
|
|
|
10,590
|
|
|
2,904
|
|
|
31,182
|
|
||||
Gain on sale or transfer of assets
|
|
362
|
|
|
—
|
|
|
—
|
|
|
7,721
|
|
||||
Net loss
|
|
(27,840
|
)
|
|
(34,138
|
)
|
|
(31,296
|
)
|
|
(59,087
|
)
|
||||
Noncontrolling interests in continuing operations
|
|
47
|
|
|
49
|
|
|
73
|
|
|
161
|
|
||||
Noncontrolling interests in discontinued operations
|
|
(6
|
)
|
|
(15
|
)
|
|
(4
|
)
|
|
(45
|
)
|
||||
Net loss attributable to common stockholders
|
|
$
|
(27,799
|
)
|
|
$
|
(34,104
|
)
|
|
$
|
(31,227
|
)
|
|
$
|
(58,971
|
)
|
Basic and diluted weighted average shares outstanding
|
|
297,646
|
|
|
298,113
|
|
|
298,618
|
|
|
299,102
|
|
||||
Basic and diluted loss per common share
|
|
$
|
(0.09
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.20
|
)
|
2011 Quarters Ended
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Rental revenue
|
|
$
|
120,785
|
|
|
$
|
112,747
|
|
|
$
|
108,357
|
|
|
$
|
112,118
|
|
Loss from continuing operations before gain on sale or transfer of assets
|
|
$
|
(23,793
|
)
|
|
$
|
(29,516
|
)
|
|
$
|
(63,719
|
)
|
|
$
|
(35,459
|
)
|
Income (loss) from discontinued operations
|
|
(6,690
|
)
|
|
(13,446
|
)
|
|
(41,417
|
)
|
|
30,780
|
|
||||
Gain on sale or transfer of assets
|
|
—
|
|
|
1,385
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
|
(30,483
|
)
|
|
(41,577
|
)
|
|
(105,136
|
)
|
|
(4,679
|
)
|
||||
Noncontrolling interests in continuing operations
|
|
163
|
|
|
52
|
|
|
90
|
|
|
75
|
|
||||
Noncontrolling interests in discontinued operations
|
|
9
|
|
|
20
|
|
|
61
|
|
|
(45
|
)
|
||||
Net loss attributable to common stockholders
|
|
$
|
(30,311
|
)
|
|
$
|
(41,505
|
)
|
|
$
|
(104,985
|
)
|
|
$
|
(4,649
|
)
|
Basic and diluted weighted average shares outstanding
|
|
295,643
|
|
|
296,091
|
|
|
296,579
|
|
|
297,075
|
|
||||
Basic and diluted loss per common share
|
|
$
|
(0.10
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.02
|
)
|
Allowance for Doubtful Accounts
|
|
Balance at
Beginning
of Year
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Write-Offs, Net
of Recoveries
|
|
Balance at End
of Year
|
||||||||||
Year to date December 31, 2012
|
|
$
|
1,459
|
|
|
$
|
467
|
|
|
$
|
—
|
|
|
$
|
(663
|
)
|
|
$
|
1,263
|
|
Year to date December 31, 2011
|
|
$
|
3,198
|
|
|
$
|
847
|
|
|
$
|
—
|
|
|
$
|
(2,586
|
)
|
|
$
|
1,459
|
|
Year to date December 31, 2010
|
|
$
|
5,244
|
|
|
$
|
314
|
|
|
$
|
—
|
|
|
$
|
(2,360
|
)
|
|
$
|
3,198
|
|
Behringer Harvard REIT I, Inc.
|
||||||||||||||||||||||||||||||||
Real Estate and Accumulated Depreciation
|
||||||||||||||||||||||||||||||||
Schedule III
|
||||||||||||||||||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross amount
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
Initial cost
|
|
Costs capitalized
|
|
at which
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Building and
|
|
subsequent
|
|
carried at
|
|
Accumulated
|
|
Year of
|
|
Date
|
|||||||||||||
Property Name
|
|
Location
|
|
Encumbrances
|
|
|
Land
|
|
Improvements
|
|
to acquisition (1)
|
|
close of period (2)
|
|
depreciation
|
|
construction
|
|
acquired
|
|||||||||||||
Ashford Perimeter
|
|
Atlanta, GA
|
|
$
|
31,505
|
|
|
|
$
|
8,479
|
|
|
$
|
31,662
|
|
|
$
|
(24,255
|
)
|
|
$
|
15,886
|
|
|
$
|
1,639
|
|
|
1982
|
|
01/2005
|
|
Lawson Commons
|
|
St. Paul, MN
|
|
55,624
|
|
|
|
2,021
|
|
|
75,881
|
|
|
2,345
|
|
|
80,247
|
|
|
23,170
|
|
|
1999
|
|
06/2005
|
|||||||
Buena Vista Plaza
|
|
Burbank, CA
|
|
21,304
|
|
|
|
3,806
|
|
|
28,368
|
|
|
248
|
|
|
32,422
|
|
|
8,547
|
|
|
1991
|
|
07/2005
|
|||||||
Riverview Tower
|
|
Knoxville, TN
|
|
29,728
|
|
|
|
2,740
|
|
|
35,181
|
|
|
(7,247
|
)
|
|
30,674
|
|
|
2,319
|
|
|
1985
|
|
10/2005
|
|||||||
1325 G Street
|
|
Washington, D.C.
|
|
100,000
|
|
|
|
71,313
|
|
|
60,681
|
|
|
6,705
|
|
|
138,699
|
|
|
19,308
|
|
|
1969
|
|
11/2005
|
|||||||
Woodcrest Corporate Center
|
|
Cherry Hill, NJ
|
|
49,036
|
|
|
|
5,927
|
|
|
49,977
|
|
|
4,611
|
|
|
60,515
|
|
|
15,623
|
|
|
1960
|
|
01/2006
|
|||||||
Burnett Plaza
|
|
Ft. Worth, TX
|
|
106,020
|
|
|
|
6,239
|
|
|
157,171
|
|
|
17,260
|
|
|
180,670
|
|
|
47,304
|
|
|
1983
|
|
02/2006
|
|||||||
Paces West
|
|
Atlanta, GA
|
|
82,291
|
|
|
|
8,838
|
|
|
88,172
|
|
|
(33,876
|
)
|
|
63,134
|
|
|
4,986
|
|
|
1987/89
|
|
04/2006
|
|||||||
222 South Riverside Plaza
|
|
Chicago, IL
|
|
198,678
|
|
|
|
29,787
|
|
|
190,111
|
|
|
17,803
|
|
|
237,701
|
|
|
56,109
|
|
|
1971
|
|
06/2006
|
|||||||
The Terrace Office Park
|
|
Austin, TX
|
|
128,997
|
|
|
|
17,330
|
|
|
124,551
|
|
|
7,640
|
|
|
149,521
|
|
|
34,462
|
|
|
1997-2002
|
|
06/2006
|
|||||||
Bank of America Plaza
|
|
Charlotte, NC
|
|
150,000
|
|
|
|
26,656
|
|
|
185,215
|
|
|
19,832
|
|
|
231,703
|
|
|
47,679
|
|
|
1974
|
|
10/2006
|
|||||||
Three Parkway
|
|
Philadelphia, PA
|
|
66,201
|
|
|
|
7,905
|
|
|
69,033
|
|
|
5,966
|
|
|
82,904
|
|
|
19,084
|
|
|
1970
|
|
10/2006
|
|||||||
Fifth Third Center-Cleveland
|
|
Cleveland, OH
|
|
48,647
|
|
|
|
1,424
|
|
|
52,075
|
|
|
4,060
|
|
|
57,559
|
|
|
13,684
|
|
|
1991
|
|
11/2006
|
|||||||
5 & 15 Wayside
|
|
Burlington, MA
|
|
208,264
|
|
(3
|
)
|
|
8,917
|
|
|
61,709
|
|
|
(13,270
|
)
|
|
57,356
|
|
|
185
|
|
|
1999/2001
|
|
12/2006
|
||||||
One & Two Eldridge Place
|
|
Houston, TX
|
|
74,118
|
|
|
|
6,605
|
|
|
89,506
|
|
|
15,481
|
|
|
111,592
|
|
|
23,853
|
|
|
1984/86
|
|
12/2006
|
|||||||
250 W. Pratt
|
|
Baltimore, MD
|
|
33,682
|
|
|
|
6,700
|
|
|
39,861
|
|
|
10,961
|
|
|
57,522
|
|
|
14,365
|
|
|
1986
|
|
12/2004-12/2006
|
|||||||
Centreport Office Center
|
|
Ft. Worth, TX
|
|
—
|
|
(3
|
)
|
|
3,175
|
|
|
12,917
|
|
|
(6,530
|
)
|
|
9,562
|
|
|
2,069
|
|
|
1999
|
|
06/2007
|
||||||
One Financial Place
|
|
Chicago, IL
|
|
160,000
|
|
|
|
23,285
|
|
|
265,099
|
|
|
(100,771
|
)
|
|
187,613
|
|
|
4,868
|
|
|
1984
|
|
11/2007
|
|||||||
10 & 120 South Riverside
|
|
Chicago, IL
|
|
—
|
|
(3
|
)
|
|
40,476
|
|
|
311,716
|
|
|
25,592
|
|
|
377,784
|
|
|
69,744
|
|
|
1965
|
|
11/2007
|
||||||
111 Woodcrest
|
|
Cherry Hill, NJ
|
|
—
|
|
(3
|
)
|
|
1,000
|
|
|
5,417
|
|
|
(1,189
|
)
|
|
5,228
|
|
|
977
|
|
|
1964
|
|
11/2007
|
||||||
1650 Arch Street
|
|
Philadelphia, PA
|
|
—
|
|
(3
|
)
|
|
24,000
|
|
|
60,825
|
|
|
(26,186
|
)
|
|
58,639
|
|
|
9,010
|
|
|
1974
|
|
12/2007-03/2011
|
||||||
United Plaza
|
|
Philadelphia, PA
|
|
61,204
|
|
|
|
23,736
|
|
|
90,001
|
|
|
7,868
|
|
|
121,605
|
|
|
19,426
|
|
|
1975
|
|
12/2007
|
|||||||
One Oxmoor Place
|
|
Louisville, KY
|
|
94,277
|
|
(4
|
)
|
|
2,851
|
|
|
17,614
|
|
|
924
|
|
|
21,389
|
|
|
3,979
|
|
|
1989
|
|
12/2007
|
||||||
Hurstbourne Place
|
|
Louisville, KY
|
|
—
|
|
(4
|
)
|
|
4,587
|
|
|
30,203
|
|
|
(13,887
|
)
|
|
20,903
|
|
|
4,581
|
|
|
1982
|
|
12/2007
|
||||||
Hurstbourne Park
|
|
Louisville, KY
|
|
—
|
|
(4
|
)
|
|
2,297
|
|
|
12,728
|
|
|
(3,240
|
)
|
|
11,785
|
|
|
2,451
|
|
|
1971
|
|
12/2007
|
||||||
Hurstbourne Plaza (5)
|
|
Louisville, KY
|
|
—
|
|
(4
|
)
|
|
4,000
|
|
|
10,054
|
|
|
154
|
|
|
14,208
|
|
|
9,712
|
|
|
1971
|
|
12/2007
|
||||||
Forum Office Park
|
|
Louisville, KY
|
|
—
|
|
(4
|
)
|
|
6,811
|
|
|
32,548
|
|
|
4,067
|
|
|
43,426
|
|
|
7,546
|
|
|
1984
|
|
12/2007
|
||||||
Lakeview
|
|
Louisville, KY
|
|
—
|
|
(4
|
)
|
|
1,468
|
|
|
8,574
|
|
|
(3,799
|
)
|
|
6,243
|
|
|
343
|
|
|
1989
|
|
12/2007
|
||||||
Steeplechase Place
|
|
Louisville, KY
|
|
—
|
|
(4
|
)
|
|
1,766
|
|
|
7,424
|
|
|
511
|
|
|
9,701
|
|
|
1,618
|
|
|
1989
|
|
12/2007
|
||||||
Hunnington
|
|
Louisville, KY
|
|
—
|
|
(4
|
)
|
|
978
|
|
|
5,507
|
|
|
(918
|
)
|
|
5,567
|
|
|
972
|
|
|
1986
|
|
12/2007
|
||||||
City Hall Plaza
|
|
Manchester, NH
|
|
—
|
|
(4
|
)
|
|
2,516
|
|
|
27,509
|
|
|
(16,678
|
)
|
|
13,347
|
|
|
369
|
|
|
1982
|
|
12/2007
|
||||||
One & Two Chestnut Place
|
|
Worcester, MA
|
|
—
|
|
(4
|
)
|
|
2,903
|
|
|
15,715
|
|
|
(1,075
|
)
|
|
17,543
|
|
|
2,971
|
|
|
1990
|
|
12/2007
|
||||||
Energy Centre
|
|
New Orleans, LA
|
|
46,484
|
|
|
|
6,134
|
|
|
59,852
|
|
|
29,578
|
|
|
95,564
|
|
|
20,418
|
|
|
1984
|
|
12/2007
|
|||||||
One Edgewater Plaza
|
|
Staten Island, NY
|
|
34,128
|
|
(6
|
)
|
|
12,789
|
|
|
26,292
|
|
|
(24,688
|
)
|
|
14,393
|
|
|
141
|
|
|
1919
|
|
12/2007
|
||||||
Tice Building
|
|
Woodcliff Lake, NJ
|
|
—
|
|
(6
|
)
|
|
2,500
|
|
|
18,118
|
|
|
(8,123
|
)
|
|
12,495
|
|
|
2,780
|
|
|
1988
|
|
12/2007
|
||||||
Fifth Third Center-Columbus
|
|
Columbus, OH
|
|
50,980
|
|
|
|
3,500
|
|
|
54,242
|
|
|
1,301
|
|
|
59,043
|
|
|
11,638
|
|
|
1928
|
|
12/2007
|
|||||||
5104 Eisenhower Boulevard
|
|
Tampa, FL
|
|
—
|
|
(3
|
)
|
|
2,602
|
|
|
25,054
|
|
|
—
|
|
|
27,656
|
|
|
6,095
|
|
|
1998
|
|
12/2007
|
||||||
Plaza at MetroCenter
|
|
Nashville, TN
|
|
24,272
|
|
|
|
3,341
|
|
|
35,333
|
|
|
(7,450
|
)
|
|
31,224
|
|
|
2,164
|
|
|
1985
|
|
12/2007
|
|||||||
Loop Central
|
|
Houston, TX
|
|
43,986
|
|
|
|
11,653
|
|
|
86,587
|
|
|
9,047
|
|
|
107,287
|
|
|
21,830
|
|
|
1980-1982
|
|
12/2007
|
|||||||
Epic Center
|
|
Wichita, KS
|
|
14,872
|
|
(7
|
)
|
|
951
|
|
|
19,609
|
|
|
(4,541
|
)
|
|
16,019
|
|
|
4,051
|
|
|
1987
|
|
12/2007
|
||||||
One Brittany Place
|
|
Wichita, KS
|
|
—
|
|
(7
|
)
|
|
926
|
|
|
3,478
|
|
|
(4,018
|
)
|
|
386
|
|
|
42
|
|
|
1984
|
|
12/2007
|
||||||
Two Brittany Place
|
|
Wichita, KS
|
|
—
|
|
(7
|
)
|
|
926
|
|
|
1,666
|
|
|
(1,678
|
)
|
|
914
|
|
|
165
|
|
|
1984
|
|
12/2007
|
||||||
801 Thompson
|
|
Rockville, MD
|
|
8,924
|
|
|
|
3,200
|
|
|
10,578
|
|
|
53
|
|
|
13,831
|
|
|
2,138
|
|
|
1963
|
|
12/2007
|
|||||||
500 E. Pratt
|
|
Baltimore, MD
|
|
58,800
|
|
|
|
—
|
|
|
66,390
|
|
|
1,686
|
|
|
68,076
|
|
|
13,783
|
|
|
2004
|
|
12/2007
|
Behringer Harvard REIT I, Inc.
|
||||||||||||||||||||||||||||||||
Real Estate and Accumulated Depreciation
|
||||||||||||||||||||||||||||||||
Schedule III
|
||||||||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross amount
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
Initial cost
|
|
Costs capitalized
|
|
at which
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
Building and
|
|
subsequent
|
|
carried at
|
|
Accumulated
|
|
Year of
|
|
Date
|
|||||||||||||
Property Name
|
|
Location
|
|
Encumbrances
|
|
|
Land
|
|
Improvements
|
|
to acquisition (1)
|
|
close of period (2)
|
|
depreciation
|
|
construction
|
|
acquired
|
|||||||||||||
One BriarLake Plaza
|
|
Houston, TX
|
|
98,526
|
|
|
|
9,602
|
|
|
119,660
|
|
|
8,085
|
|
|
137,347
|
|
|
22,004
|
|
|
2000
|
|
09/2008
|
|||||||
Two BriarLake Plaza
|
|
Houston, TX
|
|
1
|
|
|
|
2,446
|
|
|
3,504
|
|
|
—
|
|
|
5,950
|
|
|
—
|
|
|
(9)
|
|
12/2009
|
|||||||
Colorado Building
|
|
Washington, D.C.
|
|
26,877
|
|
|
|
13,328
|
|
|
28,109
|
|
|
1,984
|
|
|
43,421
|
|
|
6,211
|
|
|
1903
|
|
08/2004-12/2008
|
|||||||
Three Eldridge Place
|
|
Houston ,TX
|
|
—
|
|
(3
|
)
|
|
3,090
|
|
|
62,181
|
|
|
10,833
|
|
|
76,104
|
|
|
6,976
|
|
|
2009
|
|
12/2006-11/2009
|
||||||
unamortized discount
|
|
|
|
(46
|
)
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||||||
Totals (8)
|
|
|
|
$
|
2,107,380
|
|
|
|
$
|
437,524
|
|
|
$
|
2,873,658
|
|
|
$
|
(88,824
|
)
|
|
$
|
3,222,358
|
|
|
$
|
593,389
|
|
|
|
|
|
|
Year Ended December 31, 2012
|
|
Year Ended December 31, 2011
|
|
Year Ended December 31, 2010
|
||||||
Real Estate:
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of year
|
$
|
3,597,339
|
|
|
$
|
3,894,478
|
|
|
$
|
4,185,303
|
|
Acquisitions/improvements
|
76,304
|
|
|
68,699
|
|
|
62,126
|
|
|||
Assets disposed/written-off
|
(451,285
|
)
|
|
(365,838
|
)
|
|
(352,951
|
)
|
|||
Balance at end of the year
|
$
|
3,222,358
|
|
|
$
|
3,597,339
|
|
|
$
|
3,894,478
|
|
Accumulated depreciation:
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of year
|
$
|
617,402
|
|
|
$
|
526,197
|
|
|
$
|
423,534
|
|
Depreciation expense
|
141,046
|
|
|
150,338
|
|
|
159,086
|
|
|||
Assets disposed/written-off
|
(165,059
|
)
|
|
(59,133
|
)
|
|
(56,423
|
)
|
|||
Balance at end of the year
|
$
|
593,389
|
|
|
$
|
617,402
|
|
|
$
|
526,197
|
|
Exhibit
Number
|
|
Description
|
|
3.1
|
|
|
Ninth Articles of Amendment and Restatement (previously filed and incorporated by reference to Form 8-K filed on June 28, 2011)
|
|
|
|
|
3.1.1
|
|
|
Behringer Harvard REIT I, Inc. Articles Supplementary (previously filed and incorporated by reference to Form 8-K filed on September 6, 2012)
|
|
|
|
|
3.2
|
|
|
Second Amended and Restated Bylaws (previously filed and incorporated by reference to Form 10-Q filed on August 8, 2011)
|
|
|
|
|
3.2.1
|
|
|
Amendment to the Second Amended and Restated Bylaws (previously filed and incorporated by reference to Form 8-K filed on February 5, 2013)
|
|
|
|
|
4.1
|
|
|
Second Amended and Restated Distribution Reinvestment Plan of the Registrant (previously filed and incorporated by reference to Form 10-Q filed on November 13, 2009)
|
|
|
|
|
4.2
|
|
|
Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (previously filed and incorporated by reference to Exhibit 4.4 to Registrant’s Post-Effective Amendment No. 8 to Registration Statement on Form S-11 filed on April 24, 2008)
|
|
|
|
|
10.1
|
|
|
Second Amended and Restated Agreement of Limited Partnership of Behringer Harvard Operating Partnership I LP (previously filed and incorporated by reference to Form 8-K filed on January 5, 2007)
|
|
|
|
|
10.2
|
|
|
Third Amended and Restated Agreement of Limited Partnership of Behringer Harvard Operating Partnership I LP, dated as of August 31, 2012 (previously filed and incorporated by reference to Form 8-K filed on September 6, 2012)
|
|
|
|
|
10.3
|
|
|
Form of Stock Option Agreement under Behringer Harvard REIT I, Inc. 2005 Incentive Award Plan (previously filed and incorporated by reference to Registrant’s Post-Effective Amendment No. 1 to Form S-3 Registration Statement on Form S-11, Commission File No. 333-119945, filed on March 29, 2006)
|
|
|
|
|
10.4
|
|
|
Form of Restricted Stock Award Agreement under the Behringer Harvard REIT I, Inc. 2005 Incentive Award Plan (filed herewith)
|
|
|
|
|
10.5
|
|
|
Letter Agreement, dated March 6, 2012, between Behringer Harvard REIT I, Inc. and Behringer Advisors, LLC regarding asset management fees (previously filed and incorporated by reference to Form 10-K filed on March 9, 2012)
|
|
|
|
|
10.6
|
|
|
Letter Agreement, dated May 10, 2012, between Behringer Harvard REIT I, Inc. and Behringer Advisors, LLC regarding asset management fees (previously filed and incorporated by reference to Form 10-Q filed on May 14, 2012)
|
|
|
|
|
10.7
|
|
|
Credit Agreement, dated as of October 25, 2011 among Behringer Harvard Operating Partnership I LP, as Borrower, the several lenders from time to time parties thereto, KeyBank National Association, as Agent, J.P. Morgan Securities LLC and KeyBanc Capital Markets, as Co-Lead Arrangers and Book Runners, JPMorgan Chase Bank, N.A., as Syndication Agent, and Wells Fargo Bank, National Association and U.S. Bank National Association as Co-Documentation Agents (previously filed and incorporated by reference to Form 8-K filed on October 31, 2011)
|
|
|
|
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10.8
|
|
|
Unconditional Guaranty of Payment and Performance, dated as of October 25, 2011, by Behringer Harvard REIT I, Inc. and the subsidiary guarantors identified on the signature pages thereto, to and for the benefit of KeyBank National Association for itself and the lenders under the Credit Agreement (previously filed and incorporated by reference to Form 8-K filed on October 31, 2011)
|
|
|
|
|
10.9
|
|
|
Agreement, dated November 13, 2008, by and among Behringer Harvard REIT I, Inc., Behringer Harvard Operating Partnership I LP, Behringer Advisors, LLC, HPT Management Services LP and HPT TIC Management Services LP (previously filed and incorporated by reference to Form 8-K filed on November 18, 2008)
|
|
|
|
|
10.10
|
|
|
Reimbursement Agreement, dated October 21, 2010, between Behringer Harvard REIT I, Inc., Behringer Harvard Holdings, LLC and Robert M. Behringer (previously filed and incorporated by reference to Form 8-K filed on October 26, 2010)
|
|
|
|
|
10.11
|
|
|
Master Modification Agreement, dated as of August 31, 2012, by and among Behringer Harvard REIT I, Inc., Behringer Harvard REIT I Services Holdings, LLC, Behringer Advisors, LLC and HPT Management Services, LLC (previously filed and incorporated by reference to Form 8-K filed on September 6, 2012)
|
Date
Restrictions Lapse |
Number of
Shares Becoming Vested |
Cumulative
Percentage Vested |
[ ]
|
[ ] ([25]%)
|
[25]%
|
[ ]
|
[ ] ([25]%)
|
[50]%
|
[ ]
|
[ ] ([25]%)
|
[75]%
|
[ ]
|
[ ] ([25]%)
|
[100]%
|
Entity
(1)
|
Jurisdiction of Incorporation
|
BHR Partners, LLC
|
Delaware
|
BHR, Inc.
|
Delaware
|
BHR BT, Inc
(2)
|
Delaware
|
BHR Business Trust
|
Maryland
|
Behringer Harvard Operating Partnership I LP
(3)
|
Texas
|
|
/s/ Scott W. Fordham
|
|
Scott W. Fordham
|
|
President and Chief Financial Officer
|
|
/s/ Scott W. Fordham
|
|
Scott W. Fordham
|
|
President and Chief Financial Officer
|