1170991--3/16/2006--DIVIDEND_CAPITAL_TRUST

related topics

{investment, property, distribution}

{interest, director, officer}

{tax, income, asset}

{stock, price, share}

{operation, international, foreign}

{loan, real, estate}

{loss, insurance, financial}

{provision, law, control}

{customer, product, revenue}

{acquisition, growth, future}

{debt, indebtedness, cash}

{cost, contract, operation}

{stock, price, operating}

{condition, economic, financial}

{personnel, key, retain}

{cost, regulation, environmental}

{control, financial, internal}

{financial, litigation, operation}

There is no current public trading market for our common stock. We currently do not have research analysts reviewing the performance of our company. Our shareholders are limited in their ability to sell their shares pursuant to our share redemption program. We have a limited operating history. We depend on key personnel. We currently utilize our advisor for selection of properties and we rely on our board of directors for ultimate approval of the investment of offering proceeds. Our advisor will face conflicts of interest relating to time management. Our advisor may face conflicts of interest relating to the purchase and leasing of properties. Our advisor will face conflicts of interest relating to joint ventures with affiliates. Our advisor may have conflicting fiduciary obligations if we acquire properties with its affiliates. The fees we pay to our advisor, the Dealer Manager and other affiliates were not determined on an arm s-length basis and therefore they may not be on the same terms we could achieve from a third-party. We cannot predict the amounts of compensation to be paid to our advisor and our other affiliates. Our properties are concentrated predominantly in the industrial real estate sector. The Dealer Manager was recently formed and has not participated in many similar offerings. The Dealer Manager, which is affiliated with us, has not and will not make an independent review of us or any prospectus for any of our offerings. We have not established the offering price of our common stock based on an appraised value of our properties. If we have not listed our stock for public trading or created an alternative liquidity event for our shareholders by February 2013, then we will take steps to liquidate our assets. A limit on the number of shares a person may own may discourage a takeover or business combination. Our current shareholders interests in Dividend Capital Trust may be diluted if we issue additional common stock. Our articles of incorporation permit our board of directors to issue stock with terms that may subordinate the rights of our common shareholders or discourage a third-party from acquiring us in a manner that could result in a premium price to our shareholders. Our board of directors has broad control over our operations and our shareholders will have limited control over changes in our policies and operations. If we do not have sufficient capital resources from equity and debt financings for acquisitions of new properties or other assets because of our inability to retain earnings, our growth may be limited. Distributions payable by REITs do not qualify for the reduced tax rates that apply to other corporate distributions. Payment of fees to our advisor and its affiliates will reduce cash available for investment and distribution. The availability and timing of cash distributions is uncertain. If we are unable to find suitable investments, we may not be able to achieve our investment objectives or pay distributions. We may have difficulty funding our distributions with funds provided by our operations. If we invest in a limited partnership as a general partner we could be responsible for all liabilities of such partnership. Actions of our joint venture partners could negatively impact our performance. We are uncertain of our sources for funding our future capital needs. Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to make distributions to our shareholders. Our hedging strategies may not be successful in mitigating our risks associated with interest rates. Our derivative financial instruments used to hedge against interest rate fluctuations could reduce investors overall returns. An investment in us may be subject to additional risks if we make international investments. Adverse economic and geopolitical conditions could negatively affect our returns and profitability. Our UPREIT structure may result in potential conflicts of interest. Our shareholders returns on investment may be reduced if we are required to register as an investment company under the Investment Company Act. Competition for investments may increase costs and reduce returns. A property that incurs a vacancy could be difficult to sell or re-lease. We are dependent on customers for our revenue. We may not have funding for future tenant improvements. Uninsured losses relating to real property may adversely affect shareholder returns. Development and construction of properties may result in delays and increased costs and risks. Delays in acquisitions of properties may have adverse effects on our shareholders investments. Uncertain market conditions and the broad discretion of our advisor relating to the future disposition of properties could adversely affect the return on our shareholders investments. Discovery of previously undetected environmentally hazardous conditions may adversely affect our operating results. If we fail to make our debt payments, we could lose our investment in a property. Lenders may require us to enter into restrictive covenants relating to our operations. If we enter into financing arrangements involving balloon payment obligations, it may adversely affect our ability to make distributions. Costs of complying with governmental laws and regulations may adversely affect our income and the cash available for any distributions. If we sell properties and provide financing to purchasers, defaults by the purchasers would adversely affect our cash flows. High mortgage 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. We may be unable to sell a property if or when we decide to do so. If a sale and leaseback transaction is recharacterized, our financial condition could be adversely affected. If our customers are highly leveraged, they may have a higher possibility of filing for bankruptcy or insolvency. We may acquire properties with lock-out provisions which may affect our ability to dispose of the properties. RISKS ASSOCIATED WITH OUR PARTNERSHIP S PRIVATE PLACEMENT Our partnership s private placement subjects us to liabilities. We have and may continue to acquire co-ownership interests in real property that are subject to certain co-ownership agreements which may affect our ability to operate or dispose of the property or our co-ownership interest. 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 shareholders. Recharacterization of transactions under our partnership s private placement may result in a 100% tax on income from prohibited transactions, which would diminish our cash distributions to our shareholders. Our shareholders may have current tax liability on distributions they elect to reinvest in our common stock. In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to our shareholders. The opinion of Skadden, Arps, Slate, Meagher Flom LLP regarding our status as a REIT does not guarantee our ability to remain a REIT. If our partnership was classified as a publicly traded partnership under the Internal Revenue Code, our status as a REIT and our ability to pay distributions to our shareholders could be adversely affected. Foreign investors may be subject to Foreign Investment Real Property Tax Act ( FIRPTA ) tax on sale of common shares if we are unable to qualify as a domestically controlled REIT. There are special considerations that apply to pension or profit sharing trusts or IRAs investing in common stock.

Full 10-K form ▸

1170991--3/16/2006--DIVIDEND_CAPITAL_TRUST_INC