|JONES LANG LASALLE INC filed this Form S-1/A on 07/11/1997|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Messrs. Scott, Spoerri, Rose, Esler and Cummings, as well as entities
affiliated with Messrs. Scott and Spoerri, are limited partners of Diverse.
Diverse has an ownership interest in and operates investment assets, primarily
as the managing general partner of real estate development ventures. Prior to
January 1, 1992, the Company earned fees for providing development advisory
services to Diverse as well as fees for the provision of administrative
services. Effective January 1, 1992, the Company discontinued charging fees to
Diverse for these services. At the end of 1994, 1995 and 1996, the total
receivable due from Diverse in connection with such
fees and interest thereon was $5.3 million, $3.4 million and $2.4 million,
respectively. In 1992, Diverse began the process of discontinuing its
operations and disposing of its assets. Diverse made a payment of $1.5 million
in 1994 and $1.0 million in 1996 to reduce the receivable due to the Company.
In 1995, the Company recorded a $1.9 million provision for the estimated
uncollectible portion of the receivable due to the Company by Diverse. Messrs.
Scott, Spoerri, Rose, Esler and Cummings directly hold an approximately 11.9%,
2.2%, 2.5%, .3% and .3% partnership interest in Diverse, respectively. In
addition, the Stuart Scott Trust and Lakewood Equities, entities affiliated
with Messrs. Scott and Spoerri, have a 5.7% and .7% partnership interest in
Diverse, respectively. Diverse did not make distributions to its partners in
1994, 1995 or 1996.
In addition, the Company provides property management and leasing services to
properties in which Diverse has an ownership interest. At the end of 1994, 1995
and 1996, the total receivable due from these properties was $.6 million, $.3
million and $45,000, respectively. The properties made payments to the Company
in each of those years totaling $1.8 million, $1.7 million and $.9 million,
respectively. The Company believes that the services provided to properties in
which Diverse has an ownership interest are on terms no more favorable than
those given to unaffiliated persons.
The Company provides certain administrative services to the Employee
Partnerships for which the Company is not reimbursed. For the years ended
December 31, 1994, 1995 and 1996, respectively, the Company believes that the
estimated value of the services provided to the Employee Partnerships was $.3
million, $.2 million and $.3 million. It is expected that after the closing of
the Offering, the Company will continue to provide such services to the
Employee Partnerships without charge. After the Incorporation Transactions, the
Company expects that the value of such services will be substantially lower.
Through an affiliated entity, Mr. Scott beneficially owns all of the
outstanding shares of common stock of LP Finance 1996-1 Corporation ("LP
Finance"). LP Finance owns a 37.3% limited partnership interest in FBEC--One
Urban Centre, L.P. ("One Urban"), which interest is expected to be exchanged
for an interest in Florida Business Environment Company, L.P. ("FBEC"), a fund
being organized by the Company to invest in real estate in Florida (One Urban
and FBEC together, the "Florida Fund"). LP Finance's percentage interest in
FBEC would be determined by the total amount of capital ultimately raised. Mr.
Scott is also a director and the president and chairman of the board of LaSalle
FOF, Inc. ("LaSalle FOF"), the general partner of the Florida Fund. Mr. Scott
also owns approximately 37.3% of the outstanding shares of common stock of
LaSalle FOF. Since December 1996, the Company has provided and continues to
provide investment management services to the Florida Fund. The Company earns
an annual advisory fee of $.1 million plus a percentage of the fund properties'
net operating income and may earn an additional fee equal to a percent of
profits in excess of profits providing a specified internal rate of return. A
new advisory agreement is currently being negotiated pursuant to which the
Company would earn an annual advisory fee equal to a percentage of the fund
properties' net operating income and may earn an additional fee equal to a
percent of profits in excess of profits providing a specified internal rate of
return. The Company was also paid an acquisition fee of $.2 million in
connection with a property purchased by the fund. The Company believes that the
services provided to the Florida Fund are on terms no more favorable to the
fund than those terms given to unaffiliated persons.
The Company provides property management and leasing and investment
management services to Dai-ichi and affiliates of Dai-ichi. For the years ended
December 31, 1994, 1995 and 1996, respectively, Dai-ichi paid $16.4 million,
$9.3 million and $11.6 million for such services. At the end of such years, the
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