GREAT LAKES REIT
823 Commerce Drive
Oak Brook, Illinois 60523
August 21, 2002
Mr. Jonathan G. Katz
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609
Re: File No. S7-22-02
Dear Mr. Katz:
Great Lakes REIT is pleased to have the opportunity to respond to the Securities and Exchange Commission ("Commission") regarding certain proposals set forth in Release Nos. 33-8106 and 34-46084. Great Lakes REIT is a fully integrated, self-administered and self-managed real estate investment trust with a current portfolio of 38 properties totaling 5.5 million square feet of office space in suburban areas of Chicago, Milwaukee, Detroit, Columbus, Minneapolis, Denver and Cincinnati. The common and preferred shares of the company are listed on the New York Stock Exchange.
Great Lakes REIT is concerned that one aspect of the proposals could be counterproductive to the interests of reporting company investors. Great Lakes REIT believes that requiring companies to disclose the terms of material non-binding agreements could severely hinder the negotiating positions and competitiveness of such companies.
Item 1.01--Entry into a Material Agreement
While Great Lakes REIT generally supports the Commission's position to require a company to disclose when it enters into a material binding agreement that is not made during the ordinary course of its business, we believe that letters of intent, non-binding agreements and other similar documents should not be required to be disclosed. We do not feel that such agreements can be deemed to be material until they become binding contracts. Agreements to purchase real estate typically contain many due diligence conditions that allow the purchaser to walk away from the contract if its due diligence is not completed to its satisfaction. Until such due diligence is satisfactorily concluded, these contracts are not binding and therefore should not have to be disclosed.
In addition, Great Lakes REIT is concerned that disclosure of such non-binding agreements would cause companies to disclose competitive terms and would otherwise disrupt the ability of such companies to negotiate agreements on their own behalf and for the benefit of their investors. Companies would be disclosing negotiating terms that their competitors could review and respond to which in turn could harm a reporting company's future negotiating position. Public companies would be at a particular competitive disadvantage relative to privately held companies that are not required to disclose the terms of their agreements. Furthermore, Great Lakes REIT feels that the confidentiality provisions that normally apply to such non-binding agreements would be rendered ineffective.
In order to promote uniform standards, we believe that Item 1.01 should be kept consistent with the current requirements of Exhibit 10 under Regulation S-K, Item 6.01(b)(10) which does not require the filing of non-binding agreements. Additionally, Great Lakes REIT supports the position that registrants should not be required to file the material agreements that are subject to the Form 8-K disclosure requirements as exhibits, because such agreements are required to be filed in Form 10-Q and/or Form 10-K. We would suggest that if Item 1.01 becomes a part of Form 8-K, the Form should include a box on the cover page that would allow a registrant to satisfy obligations under Rule 165, Rule 14d-2(b) and/or Rule 14a-12, as suggested by the Commission in its proposed rule.
Great Lakes REIT thanks the Commission for the opportunity to comment on this proposal. Please contact me if you have any questions regarding this letter.
Richard L. Rasley
Executive Vice President, Secretary, Co-General Counsel
Great Lakes REIT