EASTGROUP. Sunport IV Orlando, FL. Sunport IV Orlando, FL. Supplemental Information September 30, 2004

Transcription

1 EASTGROUP P R O P E R T I E S Conference Call 800/ ID - EastGroup October 19, :00 p.m. Eastern webcast available at Supplemental Information 2004 Sunport IV Orlando, FL Sunport IV Orlando, FL 300 One Jackson Place 188 East Capitol Street Jackson, MS P.O. Box Jackson, MS Phone: 601/ Fax: 601/

2 Table of Contents Balance Sheet...3 Income Statement...4 Reconciliations to Net Income...5 Weighted Average Shares...6 Property Net Operating Income By Type...7 Debt-to-Total Market Capitalization...8 Mortgage Debt Repayment...9 Property Sales and Acquisitions...10 Development Summary...11 Additional Financial Information...12 Leasing Statistics...13 Core Market Operating Statistics...14 Lease Expiration Summary...15 Top Ten Tenants...16 Financial Statistics...17 Glossary of REIT Terms...18 In addition to historical information, certain statements in this release are forward-looking, such as those pertaining to the Company s hopes, expectations, intentions, plans, beliefs, strategies regarding the future, the anticipated performance of development and acquisition properties, capital resources, profitability and portfolio performance. Forward-looking statements involve numerous risks and uncertainties. The following factors, among others discussed herein, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: defaults or nonrenewal of leases, increased interest rates and operating costs, failure to obtain necessary outside financing, difficulties in identifying properties to acquire and in effecting acquisitions, failure to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended, environmental uncertainties, risks related to disasters and the costs of insurance to protect from such disasters, financial market fluctuations, changes in real estate and zoning laws, increases in real property tax rates and risks relating to the Company s development program, including weather, delays in construction schedules, contractor s failure to perform, increases in the price of construction materials or the unavailability of such materials, difficulty in obtaining necessary governmental approvals and other matters outside the Company s control. The success of the Company also depends upon the trends of the economy, including interest rates and the effects to the economy from possible terrorism and related world events, income tax laws, governmental regulation, legislation, population changes and those risk factors discussed elsewhere in this release. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management s analysis only as the date hereof. The Company assumes no obligation to update forward-looking statements. See also the Company s reports to be filed from time to time with the Securities and Exchange Commission pursuant to the Securities Exchange Act of Page 2 of 18

3 Consolidated Balance Sheets (In thousands, except for share and per share data) (Unaudited) ASSETS Real estate properties $ 844, ,680 Development 33,244 45, , ,334 Less accumulated depreciation (167,650) (139,822) 709, ,512 Real estate held for sale 1,375 1,375 Cash 857 2,357 Other assets 34,943 28,949 TOTAL ASSETS $ 746, ,193 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Mortgage notes payable $ 305, ,604 Notes payable to banks 56,952 55,852 Accounts payable & accrued expenses 18,335 16,583 Other liabilities 8,143 7, , ,670 Minority interest in joint venture 1,853 1,800 STOCKHOLDERS' EQUITY Series B 8.75% Cumulative Convertible Preferred Shares and additional paid-in capital; $.0001 par value; 2,800,000 shares authorized and 550,000 shares issued at 2003; stated liquidation preference of $13,750 at ,196 Series C Preferred Shares; $.0001 par value; 600,000 shares authorized; no shares issued - - Series D 7.95% Cumulative Redeemable Preferred Shares and additional paid-in capital; $.0001 par value; 1,320,000 shares authorized and issued; stated liquidation preference of $33,000 32,326 32,329 Common shares; $.0001 par value; 68,080,000 shares authorized at 2004 and 65,280,000 at 2003; 21,045,520 shares issued and outstanding at 2004 and 19,369,471 at Excess shares; $.0001 par value; 30,000,000 shares authorized; no shares issued - - Additional paid-in capital on common shares 356, ,584 Distributions in excess of earnings (30,068) (9,795) Accumulated other comprehensive loss (60) (190) Unearned compensation (2,511) (2,403) 356, ,723 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 746, ,193 Page 3 of 18

4 Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended REVENUES Income from real estate operations $ 29,163 27,154 84,680 79,890 Gain on involuntary conversion Gain on securities Other ,437 27,219 85,065 80,456 EXPENSES Operating expenses from real estate operations 8,273 8,043 23,874 23,579 Interest 5,115 4,796 15,057 14,137 Depreciation and amortization 8,245 7,931 24,737 23,265 General and administrative 1,686 1,246 4,930 3,746 Minority interest in joint ventures ,441 22,123 68,964 65,047 INCOME FROM CONTINUING OPERATIONS 5,996 5,096 16,101 15,409 DISCONTINUED OPERATIONS Income from real estate operations Gain on sale of real estate investments 1, , INCOME FROM DISCONTINUED OPERATIONS 1, , NET INCOME 7,409 5,163 17,703 15,686 Preferred dividends-series A ,016 Preferred dividends-series B ,598 Preferred dividends-series D , Costs on redemption of Series A preferred - 1,778-1,778 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 6,753 2,360 15,735 8,645 BASIC PER COMMON SHARE DATA Income from continuing operations $ Income from discontinued operations Net income available to common stockholders $ Weighted average shares outstanding 20,804 18,451 20,746 17,089 DILUTED PER COMMON SHARE DATA Income from continuing operations $ Income from discontinued operations Net income available to common stockholders $ Weighted average shares outstanding 21,180 18,818 21,145 17,453 Page 4 of 18

5 Reconciliations of Other Reporting Measures to Net Income (In thousands, except per share data) (Unaudited) RECONCILIATIONS OF OTHER REPORTING MEASURES TO NET INCOME: Three Months Ended Nine Months Ended Income from real estate operations $ 29,163 27,154 84,680 79,890 Operating expenses from real estate operations (8,273) (8,043) (23,874) (23,579) PROPERTY NET OPERATING INCOME (PNOI) (A) 20,890 19,111 60,806 56,311 Gain on involuntary conversion Gain on securities Other income General and administrative expense (1,686) (1,246) (4,930) (3,746) EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) 19,478 17,930 56,261 53,131 Income from discontinued operations (before depreciation and amortization) Interest expense (B) (5,115) (4,796) (15,057) (14,137) Minority interest in earnings (before depreciation and amortization) (158) (141) (473) (430) Gain on sale of nondepreciable real estate Dividends on Series A preferred shares - (76) - (2,016) Dividends on Series D preferred shares (656) (649) (1,968) (649) Costs on redemption of Series A preferred - (1,778) - (1,778) FUNDS FROM OPERATIONS (FFO) AVAILABLE TO COMMON STOCKHOLDERS (A) 13,574 10,604 39,009 34,436 Depreciation and amortization from continuing operations (8,245) (7,931) (24,737) (23,265) Depreciation and amortization from discontinued operations (1) (47) (94) (144) Share of joint venture depreciation and amortization Gain on sale of depreciable real estate investments 1,389-1, Dividends on Series B convertible preferred shares - (300) - (2,598) NET INCOME AVAILABLE TO COMMON STOCKHOLDERS 6,753 2,360 15,735 8,645 Dividends on preferred shares 656 1,025 1,968 5,263 Costs on redemption of Series A preferred - 1,778-1,778 NET INCOME $ 7,409 5,163 17,703 15,686 DILUTED PER COMMON SHARE DATA: (C) Income from continuing operations $ Income from discontinued operations Net income available to common stockholders $ Weighted average shares outstanding 21,180 18,818 21,145 17,453 Funds from operations available to common stockholders $ Weighted average shares outstanding for FFO purposes 21,180 20,133 21,145 19,803 (A) The Company s chief decision makers use two primary measures of operating results in making decisions, such as allocating resources: property net operating income (PNOI), defined as income from real estate operations less property operating expenses (before interest expense and depreciation and amortization), and funds from operations (FFO). EastGroup defines FFO consistent with the National Association of Real Estate Investment Trusts definition, as net income (loss) (computed in accordance with accounting principles generally accepted in the United States of America (GAAP)), excluding gains or losses from sales of depreciable real estate property, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. PNOI and FFO are supplemental industry reporting measurements used to evaluate the performance of the Company s investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry s calculations of PNOI and FFO provide supplemental indicators of the properties performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other REITs. Investors should be aware that items excluded from or added back to FFO are significant components in understanding and assessing the Company s financial performance. (B) Net of capitalized interest of $365,000 and $518,000 for the three months ended 2004 and 2003, respectively; and $1,275,000 and $1,520,000 for the nine months ended 2004 and 2003, respectively. (C) Assumes dilutive effect of common stock equivalents. Page 5 of 18

6 Weighted Average Shares (In thousands) Three Months Ended Nine Months Ended Weighted average common shares 20,804 18,451 20,746 17,089 BASIC SHARES FOR EARNINGS PER SHARE 20,804 18,451 20,746 17,089 Potential common shares: Stock options Nonvested restricted stock DILUTED SHARES FOR EARNINGS PER SHARE 21,180 18,818 21,145 17,453 Potential common shares: Convertible preferred stock - 1,315-2,350 DILUTED SHARES FOR FUNDS FROM OPERATIONS 21,180 20,133 21,145 19,803 Page 6 of 18

7 Property Net Operating Income By Type (In thousands) Three Months Ended Nine Months Ended Variance Variance Same Property $ 19,439 18, % 55,848 54, % 2004 Acquisitions Acquisitions , Development 264 (13) Development Other (16) - (35) (8) TOTAL NOI BEFORE STRAIGHT-LINE RENTS 20,201 18,366 58,335 54,697 Straight-Line Rents ,471 1,614 TOTAL PROPERTY NET OPERATING INCOME $ 20,890 19,111 60,806 56,311 SAME PROPERTY Same Property Before Straight-Line Rents $ 19,439 18, % 55,848 54, % Same Property Straight-Line Rents ,800 1,547 Total Same Property NOI $ 19,943 19, % 57,648 56, % REAL ESTATE INCOME & EXPENSE Real Estate Income $ 29,163 27,154 84,680 79,890 Real Estate Expense (8,273) (8,043) (23,874) (23,579) PNOI BEFORE MINORITY INTEREST $ 20,890 19,111 60,806 56,311 EXPENSE TO REVENUE RATIO 28.4% 29.6% 28.2% 29.5% Page 7 of 18

8 Debt-to-Total Market Capitalization Interest Maturity Annualized Rate Date 2004 Interest BANK CREDIT FACILITIES $12.5MM Line - Floating Rate 3.015% 12/31/04 $ 4,952,000 $ 149,000 $175MM Line - Floating Rate 3.061% 01/08/05 52,000,000 1,592,000 Total Bank Debt 56,952,000 1,741,000 MORTGAGE DEBT Exchange Distribution Center I 8.375% 08/01/05 1,842, ,000 Westport Commerce Center 8.000% 08/01/05 2,443, ,000 LakePointe Business Park 8.125% 10/01/05 9,875, ,000 Jetport Commerce Park 8.125% 10/01/05 2,955, ,000 Huntwood Associates 7.990% 08/22/06 11,168, ,000 Wiegman Associates 7.990% 08/22/06 5,154, ,000 World Houston 1 and % 04/15/07 4,212, ,000 E. University I & II, Broadway VI, 55th Avenue and Ethan Allen 8.060% 06/26/07 11,015, ,000 Lamar Distribution Center II 6.900% 12/01/08 1,839, ,000 Dominguez, Kingsview, Walnut, Washington, Industry and Shaw 6.800% 03/01/09 39,627,000 2,695,000 Auburn Facility 8.875% 09/01/09 2,518, ,000 Tower Automotive Center (recourse) 5.300% 01/15/11 10,620, ,000 Interstate Warehouses, Venture, Stemmons, Glenmont I & II, West Loop I & II, Butterfield, Founders, and Rojas 7.250% 05/01/11 42,593,000 3,088,000 America Plaza, Central Green, and World Houston % 05/10/11 25,340,000 2,007,000 University Business Center (120 & 130 Cremona) 6.430% 05/15/12 7,058, ,000 University Business Center (125 & 175 Cremona) 7.980% 06/01/12 10,766, ,000 Airport Distribution, Southpointe, Broadway I, III & IV, Southpark, 51st Avenue, Chestnut, Main Street, Interchange Business Park, North Stemmons I, and World Houston 12 and % 09/01/12 38,705,000 2,655,000 Broadway V, 35th Avenue, Sunbelt, Freeport, Lockwood, Northwest Point, Techway Southwest I, World Houston 10, 11 & % 09/05/13 44,526,000 2,115,000 Kyrene Distribution Center I 9.000% 07/01/14 879,000 79,000 World Houston 17, Kirby Business Center, Americas Ten I, Shady Trail Distribution Center, Palm River North I, II & III, and Westlake Distribution Center I & II 5.680% 09/28/14 30,300,000 1,721,000 Blue Heron Distribution Center II 5.390% 03/01/20 2,036, ,000 Total Mortgage Debt 305,471,000 20,606,000 TOTAL DEBT $ 362,423,000 $ 22,347,000 MARKET EQUITY Shares Outstanding - Common 21,045,520 Price per share $ Total Market Equity - Common 698,711,000 Shares Outstanding - Preferred Series D 1,320,000 Liquidation price per share $ Total Market Equity - Preferred Series D 33,000,000 TOTAL MARKET EQUITY $ 731,711,000 TOTAL DEBT + TOTAL MARKET EQUITY $ 1,094,134,000 TOTAL DEBT (TOTAL DEBT + TOTAL MARKET EQUITY) 33.1% Weighted Average Interest Rate - Bank Debt 3.1% Weighted Average Interest Rate - Mortgage Debt 6.7% Weighted Average Interest Rate - Total Debt 6.2% Page 8 of 18

9 Mortgage Debt Repayment Schedule As of 2004 Amortization Balloon Payments Total Weighted Average Weighted Average Weighted Average Year Repayments Interest Rate Repayments Interest Rate Repayments Interest Rate $ 1,791, % $ % $ 1,791, % ,580, % 16,548, % 24,128, % ,569, % 15,385, % 22,954, % ,829, % 14,191, % 22,020, % ,153, % 1,481, % 9,634, % 2009 and beyond ,530, % 200,414, % 224,944, % TOTAL / WEIGHTED AVERAGE $ 57,452, % $ 248,019, % $ 305,471, % Page 9 of 18

10 Property Sales and Acquisitions Schedule For the Nine Months Ended 2004 SALES Accumulated Net Sales Depreciation/ Date Property Name Location Size Price (1) Cost Amortization Gain 1st Quarter Sales NONE 2nd Quarter Sales 06/30/04 Getwell Distribution Center Memphis, TN 26,000 sf $ 746, ,000 (198,000) 61,000 3rd Quarter Sales 07/01/04 Sample 95 Business Park III Pompano Beach, FL 18,000 sf 1,994, ,000 (192,000) 1,283,000 08/20/04 Viscount Row Distribution Center Dallas, TX 104,000 sf 2,204,000 2,708,000 (610,000) 106, ,000 sf 4,198,000 3,611,000 (802,000) 1,389,000 Total Sales 148,000 sf 4,944,000 4,494,000 (1,000,000) 1,450,000 Date Property Name Location Size Cost (2) 1st Quarter Acquisitions ACQUISITIONS 01/15/04 Blue Heron Distribution Center II West Palm Beach, FL 100,000 sf $ 5,690,000 01/15/04 Blue Heron Distribution Center III West Palm Beach, FL 1.56 acres 450,000 03/17/04 Kirby Business Center Houston, TX 125,000 sf 4,228,000 10,368,000 2nd Quarter Acquisitions NONE 3rd Quarter Acquisitions 07/01/04 Interstate Distribution Center IV Dallas, TX 46,000 sf 3,062,000 08/10/04 Alamo Downs Distribution Center San Antonio, TX 253,000 sf 8,464,000 09/10/04 Santan 10 Phase II Chandler, AZ 5.94 acres 1,088,000 12,614, acres Total Acquisitions 524,000 sf $ 22,982,000 (1) Net sales price represents contract sales price less closing costs. (2) Cost represents acquisition price plus closing costs. Page 10 of 18

11 Page 11 of 18 Development Summary As of 2004 (In thousands) Costs Incurred NOI (1) Anticipated Projected Projected Avg Size (SF) at For Quarter Cumulative Projected 3rd Qtr YTD Completion Conversion Stabilized % Occupied % Leased % Leased Completion Ended 9/30/04 at 9/30/04 Total Costs /30/2004 Date Date (2) Yield (3) 4Q 04 1Q 05 3Q 04 10/18/04 Lease-up: Santan 10 Chandler, AZ 65 $ 162 3,115 3,800 01/04 01/ % 53% 100% 100% 100% Total Lease-up ,115 3,800 (8) (1) Under Construction: Palm River South I Tampa, FL ,720 4,300 11/04 11/ % 0% 0% 0% 0% Sunport Center V Orlando, FL 63 1,085 2,466 3,800 12/04 01/ % 0% 0% 100% 100% World Houston 16 Houston, TX 94 1,311 2,162 5,100 12/04 12/ % 0% 0% 0% 0% Executive Airport CC II Fort Lauderdale, FL ,058 4,200 02/05 02/ % 0% 0% 0% 0% Southridge I Orlando, FL ,900 03/05 03/ % 0% 0% 0% 0% Southridge V Orlando, FL ,600 03/05 03/ % 0% 0% 0% 0% Total Under Construction 402 4,247 10,396 25, Prospective Development (Principally Land): Phoenix, AZ 123 1,083 1,467 6,900 Tucson, AZ ,500 Tampa, FL ,293 4,500 Orlando, FL 729 (478) 6,764 56,800 Fort Lauderdale, FL ,300 El Paso, TX 251-2,444 7,600 Houston, TX ,394 35,800 Jackson, MS ,900 Total Prospective Development 2, , , ,469 $ 5,239 33, , Completed Development and Transferred to Real Estate Properties During 2004: 3rd Quarter Sunport IV Orlando, FL 63 $ 12 3, % 86% 86% Techway SW II Houston, TX , % 43% 43% , nd Quarter Executive Airport CC I & III Fort Lauderdale, FL , % 71% 71% Expressway Commerce Center Tampa, FL , % 67% 67% World Houston 17 Houston, TX , % 100% 100% World Houston 19 Houston, TX , % 87% 87% World Houston 20 Houston, TX , % 0% 0% , st Quarter None Total Transferred to Real Estate Properties 539 $ , (1) Computed with rents on a straight-line basis. (2) Transferred from Development to the Portfolio--earlier of 80% occupied or one year after completion date. (3) Based on 100% occupancy and rents computed on a straight-line basis.

12 Additional Financial Information (In thousands) Three Months Ended Nine Months Ended Straight-Line Rent Income Net of Bad Debt Expense (1) $ ,471 1,648 Stock-Based Compensation Expense $ Amortization of Loan Costs $ Capital Expenditures Estimated Useful Life Upgrade on Acquisitions 40 Yrs $ Tenant Improvements: New Tenants Lease Life 1, ,566 2,763 New Tenants (first generation) (2) Lease Life Renewal Tenants Lease Life ,004 1,636 Other Building Improvements 5-40 Yrs , Roofs 5-15 Yrs ,101 1,250 Parking Lots 3-5 Yrs Other 5 Yrs Total Capital Expenditures $ 3,088 2,089 7,965 7,170 Capital Leasing Costs (3) Development Lease Life $ New Tenants Lease Life ,330 1,641 New Tenants (first generation) (2) Lease Life Renewal Tenants Lease Life Total Capital Leasing Costs $ 863 1,607 2,826 3,252 Amortization of Leasing Costs (4) $ ,433 2,375 (1) Includes discontinued operations. (2) First generation refers to space that has never been occupied under EastGroup's ownership. (3) Included in Other Assets. (4) Included in Depreciation and Amortization (includes discontinued operations). Page 12 of 18

13 2004 Leasing Statistics Summary Based on Actual Occupancy Three Months Ended Nine Months Ended # of % of % of # of % of % of Leases Expiring Total SF Expiring Leases Expiring Total SF Expiring Total Square Feet Owned as of 09/30/04 20,175,352 20,175,352 Percentage Leased as of 09/30/ % 93.5% Percentage Occupied as of 09/30/ % 92.1% Beginning Vacancy 1,700,909 1,537,340 Additions: Leases Expiring , % of Total Portfolio 206 2,919, % New Development/Acquisition vacancy 188, ,657 Early Terminations/Bankruptcies 19,200 48, ,367 3,367,208 Deletions: Leases Renewed 33 60% (479,626) 63% % (1,606,784) 55% New Leases Commenced of Leases Expiring 9 (163,595) 21% 31 (503,772) 17% New Leases Commenced of Beginning Vacancy 33 (386,103) 98 (1,215,255) (1,029,324) (3,325,811) Net Change in Month to Month Leases (56,969) 6,246 Other SF Adjustments (105) (105) Ending Vacancy 1,584,878 1,584,878 Renewals on Leases Expiring after 09/30/04 28,958 New Leases on Leases Expiring after 09/3004 4,060 33,018 Three Months Ended 2004 Average Term Average Rental Rental Tenant Leasing in Years Lease Size Change (Cash) Change (2) Improvements Commissions New Leases (1) , % -1.99% $ 2.21 psf $ 0.74 psf Renewal Leases , % 5.67% $ 0.87 psf $ 0.58 psf Average for New & Renewal (1) , % 1.49% $ 1.59 psf $ 0.67 psf 2004 Average Term Average Rental Rental in Years Lease Size Change (Cash) Change (2) Tenant Improvements Leasing Commissions New Leases (1) , % -3.60% $ 1.81 psf $ 0.80 psf Renewal Leases , % 2.69% $ 0.73 psf $ 0.55 psf Average for New & Renewal (1) , % -0.45% $ 1.29 psf $ 0.68 psf (1) Rental increase and amounts per square foot (psf) do not include development properties or 1st generation space on development properties. (2) Includes straight-line rent adjustments. Percentage Leased represents the percentage of total leasable square footage for which there is a signed lease, including month-to-month leases, as of the close of the reporting period. Space is considered leased upon execution of the lease. Percentage Occupied represents the percentage of total leasable square footage for which the lease term has commenced as of the close of the reporting period. Page 13 of 18

14 Core Market Operating Statistics 2004 Total % of Total Same Store (1) Rental Change (1) Square Feet % Base Rent % % PNOI Change New and Renewals Lease Expirations in Square Feet 2004 of Properties of Total of Properties Leased Occupied QTR YTD QTR YTD 2004 % (2) 2005 % (2) Florida Jacksonville 1,584, % 7.0% 98.9% 98.5% 7.1% 9.3% -8.8% -10.7% 124, % 222, % Orlando 1,082, % 6.0% 98.5% 97.7% 13.3% 12.2% -16.8% -7.0% 19, % 350, % Tampa 2,067, % 12.0% 97.5% 97.3% 9.2% 7.8% -9.9% -3.4% 72, % 276, % Ft. Lauderdale 861, % 4.8% 92.2% 89.7% -4.7% -9.7% -8.7% -7.4% 14, % 118, % 5,596, % 29.8% 97.3% 96.6% 7.5% 6.4% -10.8% -6.6% 230, % 967, % Texas Dallas 1,263, % 4.1% 90.8% 88.4% -7.1% -5.5% 0.0% -2.7% 40, % 150, % Houston 3,066, % 13.8% 92.7% 91.7% 16.8% 6.4% -1.4% -3.2% 80, % 283, % El Paso 1,019, % 4.0% 92.7% 89.8% 2.5% -2.1% -7.6% -8.7% 11, % 415, % San Antonio 252, % 0.1% 52.1% 47.7% NA NA NA NA 11, % 22, % 5,601, % 22.0% 90.4% 88.6% 9.1% 2.3% -2.0% -3.5% 143, % 872, % California San Francisco 960, % 4.1% 87.1% 82.8% -20.7% -23.9% NA -2.9% - 0.0% 40, % Los Angeles 1,850, % 12.2% 100.0% 100.0% 13.9% 4.0% 3.4% 1.2% 22, % 620, % Santa Barbara 230, % 5.3% 100.0% 100.0% 7.7% 5.7% NA NA - 0.0% 33, % Fresno 398, % 1.4% 93.5% 93.5% -7.6% -10.6% -23.5% -24.3% 17, % 84, % San Diego 191, % 1.0% 100.0% 100.0% 58.3% 169.4% -26.5% -26.5% 33, % - 0.0% 3,630, % 24.0% 95.9% 94.7% 4.5% -0.3% -5.4% -5.8% 73, % 778, % Arizona Phoenix 1,615, % 7.4% 95.6% 91.9% 10.2% 11.7% -7.6% -10.0% 151, % 442, % Tucson 522, % 2.0% 100.0% 100.0% -3.8% -18.2% NA NA - 0.0% 162, % 2,138, % 9.4% 96.7% 93.9% 6.2% 2.8% -7.6% -10.0% 151, % 605, % Total Core Markets 16,967, % 85.2% 94.6% 93.2% 6.8% 2.9% -6.0% -6.1% 598, % 3,224, % Total Other Markets 3,207, % 14.8% 87.4% 86.4% 0.4% 0.0% 10.6% -11.5% 28, % 533, % Total Operating Properties 20,175, % 100.0% 93.5% 92.1% 5.8% 2.5% -4.5% -6.9% 627, % 3,758, % (1) Represents amounts before straight-line rent. (2) Represents percentage of total portfolio lease expirations. Page 14 of 18

15 Lease Expiration Summary Total Square Feet Owned Based on Leases Signed Through 2004 Annualized Current % of Total Square Footage of % of Base Rent of Base Rent of LEASE EXPIRATION Leases Expiring Total SF Leases Expiring Leases Expiring Month-to-Month , % $ 548, % Vacant (1) ,312, % % , % 3,081, % ,758, % 17,861, % ,050, % 11,399, % ,541, % 16,571, % 2008 and beyond ,736, % 40,639, % TOTAL ,175, % $ 90,102, % (1) Represents SF vacant as of 09/30/04 of 1,584,878 SF less new leases signed with lease terms commencing subsequent to 09/30/04 of 271,939 SF. Page 15 of 18

16 Top 10 Tenants by Square Footage As of 2004 Total SF Owned as of 09/30/04 for Operating Properties 20,175,352 Total Base Rent for Nine Months Ended 09/30/04 for Operating Properties $ 65,644,555 # of Total SF % of Total Annualized % of Total Expiration Tenant Leases Location Leased Portfolio Base Rent (1) Base Rent (2) Date (3) 1 Premier Beverage 1 Jacksonville, FL 162,000 $ 413,160 04/31/18 1 Tampa, FL 222, ,050 08/31/09 1 Tampa, FL 47, ,066 11/30/ % 1.61% 2 Palmer Distribution 1 Houston, TX 392, % 1,153, % 12/31/09 3 U.S. Postal Service 1 Tampa, FL 53, ,571 08/31/09 1 Tampa, FL 44, ,424 06/30/09 1 Tampa, FL 46, ,350 11/30/07 1 Tampa, FL 5,200 42,120 09/30/04 1 New Orleans, LA 99, ,170 06/30/09 1 Houston, TX 110, ,992 06/30/ % 2.18% 4 Ethan Allen 1 Los Angeles, CA 300, % 1,278, % 01/31/10 5 International Paper 1 San Francisco, CA 125, ,024 10/31/08 1 San Francisco, CA 139, ,252 06/30/ % 1.32% 6 Price Transfer 1 Los Angeles, CA 261, % 1,255, % 01/31/09 7 Wal-Mart Stores 1 Tucson, AZ 162, ,774 03/31/05 1 Fresno, CA 20,000 60,000 12/31/04 1 New Orleans, LA 45, ,750 01/15/ % 0.99% 8 Tower Automotive 1 Jackson, MS 210, % 1,370, % 12/31/10 9 Rain Bird Corporation 1 Tucson, AZ 206, % 621, % 07/31/15 10 Biagi Brothers 1 Jacksonville, FL 134, ,485 08/31/07 1 Jacksonville, FL 50, ,500 08/31/ % 0.54% 21 2,839, % $ 11,494, % (1) Based on the annualized base rent as of 09/30/04. (2) Calculation: Tenant Base Rent / Total Base Rent for Nine Months Ended 09/30/04 * (9/12). (3) Expiration date reflects renewals as of 10/18/04. Page 16 of 18

17 Financial Statistics Quarter ended 9/30/ Years Ended ASSETS/MARKET CAPITALIZATION Assets $ 746,911, ,267, ,737, ,062, ,414,000 Equity Market Capitalization 731,711, ,245, ,786, ,216, ,753,000 Total Market Capitalization (Debt + Equity) 1,094,134,000 1,046,517, ,086, ,288, ,462,000 Shares Outstanding - Common 21,045,520 20,853,780 16,104,356 15,912,060 15,849,318 Price per share Shares Outstanding (Series A) - Preferred - - 1,725,000 1,725,000 1,725,000 Liquidation price per share Shares Outstanding (Series B) - Preferred - - 2,800,000 2,800,000 2,800,000 Liquidation price per share Shares Outstanding (Series D) - Preferred 1,320,000 1,320, Liquidation price per share FFO GROWTH RATES FFO per diluted share Growth rate 20.8% -8.2% -6.5% 9.1% 10.5% COMMON DIVIDEND PAYOUT RATIO Dividend Distribution FFO per diluted share Dividend Payout Ratio 75% 81% 73% 65% 63% COMMON DIVIDEND YIELD Dividend Distribution Price Per Share Dividend Yield 5.78% 5.87% 7.37% 7.80% 7.06% FFO MULTIPLES FFO per diluted share Price Multiple INTEREST COVERAGE RATIO EBITDA (1) 19,503,000 71,814,000 71,730,000 75,085,000 70,137,000 Interest expense 5,115,000 19,015,000 17,387,000 17,823,000 18,570,000 Interest coverage ratio FIXED CHARGE COVERAGE RATIO EBITDA (1) 19,503,000 71,814,000 71,730,000 75,085,000 70,137,000 Interest expense plus dividends 5,771,000 22,336,000 21,267,000 21,703,000 22,450,000 on nonconvertible preferred stock Fixed charge coverage ratio DEBT-TO-TOTAL MARKET CAPITALIZATION 33% 32% 38% 38% 37% (1) EBITDA for ratio analysis includes discontinued operations. Page 17 of 18

18 Glossary of REIT Terms Listed below are definitions of commonly used real estate investment trust (REIT) industry terms. For additional information on REITs, please see the National Association of Real Estate Investment Trusts (NAREIT) web site at Real Estate Investment Trust: A company that owns and, in most cases, operates income-producing real estate such as apartments, shopping centers, offices, hotels and warehouses. Some REITs also engage in financing real estate. The shares of a REIT are freely traded, usually on a major stock exchange. To qualify as a REIT, a company must distribute at least 90 percent of its taxable income to its shareholders annually. A company that qualifies as a REIT is permitted to deduct dividends paid to its shareholders from its corporate taxable income. As a result, most REITs remit at least 100 percent of their taxable income to their shareholders and therefore owe no corporate federal income tax. Taxes are paid by shareholders on the dividends received and on any capital gains. Most states honor this federal treatment and also do not require REITs to pay state income tax. Industrial Properties: Generally consisting of four concrete walls tilted up on a slab of concrete with a roof that holds it all together. An internal office component is then added. Business uses include warehousing, distribution, light manufacturing and assembly, research and development, showroom, office, or a combination of some or all of the aforementioned. Property Net Operating Income (PNOI): Income from real estate operations less property operating expenses (before interest expense and depreciation and amortization). EBITDA: Earnings before interest, taxes, depreciation and amortization. Funds From Operations (FFO): The most commonly accepted reporting measure of a REIT s operating performance. It is equal to a REIT s net income (loss) (GAAP), excluding gains or losses from sales of depreciable property, adding back real estate depreciation and amortization, and adjusting for unconsolidated partnerships and joint ventures. Total Return: A stock s dividend income plus capital appreciation over a specified period as a percentage of the stock price at the beginning of the period. Straight-Lining: The process of averaging the tenant s rent payments over the life of the lease. Generally accepted accounting principles require real estate companies to straight-line rents. Debt-to-Total Market Capitalization Ratio: A ratio calculated by dividing a company s debt by the total amount of a company s equity (at market value) and debt. Percentage Leased: The percentage of total leasable square footage for which there is a signed lease, including monthto-month leases, as of the close of the reporting period. Space is considered leased upon execution of the lease. Percentage Occupied: The percentage of total leasable square footage for which the lease term has commenced as of the close of the reporting period. Same Store Properties: Operating properties owned during the entire current period and prior year reporting period. Development properties are excluded until stabilized for both the current and prior year reporting period. Business Distribution Facility: A warehouse building with a ceiling clear height of 18 to 24 feet, a depth of 200 feet or less, and an office build-out of approximately 15 percent. Page 18 of 18