1170991--3/14/2007--DCT_Industrial_Trust

related topics

{investment, property, distribution}

{loan, real, estate}

{tax, income, asset}

{stock, price, share}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{acquisition, growth, future}

{stock, price, operating}

{regulation, change, law}

{cost, contract, operation}

{financial, litigation, operation}

{provision, law, control}

{operation, international, foreign}

{interest, director, officer}

{condition, economic, financial}

{control, financial, internal}

{loss, insurance, financial}

{personnel, key, retain}

{capital, credit, financial}

RISKS RELATED TO OUR BUSINESS AND OPERATIONS Our investments are concentrated in the industrial real estate sector, and our business would be adversely affected by an economic downturn in that sector. Our growth will partially depend upon future acquisitions of properties, and we may be unable to consummate acquisitions on advantageous terms or acquisitions may not perform as we expect. We may be unable to source off-market deal flow in the future. Our real estate development strategies may not be successful. Our institutional capital management strategy of contributing properties to joint ventures we manage may not allow us to expand our business and operations as quickly or as profitably as we desire. We depend on key personnel. Our operating results and financial condition could be adversely affected if we do not continue to have access to capital on favorable terms. Actions of our joint venture partners could negatively impact our performance. If we invest in a limited partnership as a general partner we could be responsible for all liabilities of such partnership. Investment in us may be subject to additional risks if we make international investments. We may be exposed to risks to which we have not historically been exposed. The availability and timing of cash distributions is uncertain. We may have difficulty funding our distributions with our available cash flows. Adverse economic and geopolitical conditions could negatively affect our returns and profitability. Events or occurrences that affect areas in which our properties are geographically concentrated may impact financial results. Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting. RISKS RELATED TO CONFLICTS OF INTEREST We may compete with our affiliates for properties. Our Executive Chairman has competing demands on his time and attention. We may invest in, or co-invest with, our affiliates. Our UPREIT structure may result in potential conflicts of interest. Our performance and value are subject to general economic conditions and risks associated with our real estate assets. Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties. We are dependent on tenants for our revenues. Our ability to renew leases or re-lease space on favorable terms as leases expire significantly affects our business. A property that incurs a vacancy could be difficult to sell or re-lease. We may not have funding for future tenant improvements. If our tenants are highly leveraged, they may have a higher possibility of filing for bankruptcy or insolvency. The fact that real estate investments are not as liquid as other types of assets may reduce economic returns to investors. Delays in acquisition and development of properties may have adverse effects. Development and construction of properties may incur delays and increased costs and risks. Acquired properties may be located in new markets where we may face risks associated with investing in an unfamiliar market. Uninsured losses relating to real property may adversely affect our returns. Contingent or unknown liabilities could adversely affect our financial condition. Environmentally hazardous conditions may adversely affect our operating results. Costs of complying with governmental laws and regulations may adversely affect our income and the cash available for any distributions. Compliance or failure to comply with the Americans with Disabilities Act and other similar regulations could result in substantial costs. We own several of our properties subject to ground leases that expose us to the loss of such properties upon breach or termination of the ground leases and may limit our ability to sell these properties. We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions, which could adversely affect the return on an investment in our common stock. If we sell properties and provide financing to purchasers, defaults by the purchasers would adversely affect our cash flows. We may acquire properties with lock-out provisions which may affect our ability to dispose of the properties. RISKS RELATED TO OUR DEBT FINANCINGS Our operating results and financial condition could be adversely affected if we are unable to make required payments on our debt. Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to make distributions to our stockholders. Covenants in our credit agreements could limit our flexibility and adversely affect our financial condition. If we enter into financing arrangements involving balloon payment obligations, it may adversely affect our ability to make distributions. High interest rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire and the amount of cash distributions we can make. Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on investment in our common stock. RISKS RELATED TO OUR CORPORATE STRUCTURE Our charter and Maryland law contain provisions that may delay, defer or prevent a change of control transaction. Our board of directors can take many actions without stockholder approval. We may change our investment and financing strategies and enter into new lines of business without stockholder consent, which may result in riskier investments than our current investments. Our rights and the rights of our stockholders to take action against our directors and officers are limited. RISKS RELATED TO OUR COMMON STOCK The existence of a large number of outstanding shares and stockholders could negatively affect our stock price. Our distributions to stockholders may change. Future offerings of debt securities, which would be senior to our common stock upon liquidation, or equity securities, which would dilute our existing stockholders and may be senior to our common stock for the purposes of distributions, may adversely affect the market price of our common stock. Future sales of our common stock by DCAG or its members or other holders of cash flow interests may adversely affect the fair market value of our common stock. Failure to qualify as a REIT could adversely affect our operations and our ability to make distributions. To qualify as a REIT, we must meet annual distribution requirements. Legislative or regulatory action could adversely affect our stockholders. Distributions payable by REITs do not qualify for the reduced tax rates that apply to certain other corporate distributions. Recharacterization of transactions under our operating partnership s private placement may result in a 100% tax on income from prohibited transactions, which would diminish our cash distributions to our stockholders. In certain circumstances, we may be subject to federal and state income taxes, which would reduce our cash available for distribution to our stockholders. If our operating partnership was classified as a publicly traded partnership under the Code, our status as a REIT and our ability to pay distributions to our stockholders could be adversely affected. Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on gain attributable to the transaction. Foreign investors may be subject to Foreign Investment Real Property Tax Act, or FIRPTA, tax on sale of common stock if we are unable to qualify as a domestically controlled REIT or if our stock is not considered to be regularly traded on an established securities market.

Full 10-K form ▸

1170991--3/14/2007--DCT_Industrial_Trust_Inc.