<PAGE> 1
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
Commission file number 0-28048
ROBERTS REALTY INVESTORS, INC.
(Exact name of small business issuer as specified in its charter)
GEORGIA 58-2122873
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
8010 Roswell Road, Suite 120, Atlanta, Georgia 30350
(Address of principal executive offices)
(770) 394-6000
Issuer's telephone number
------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- --
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court. Yes ___
No ____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock - 4,186,329
shares
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
REAL ESTATE ASSETS - At cost: (Note 3)
Land $ 21,807 $ 19,937
Buildings and improvements 85,464 80,441
Furniture, fixtures, and equipment 11,187 10,429
--------- ---------
118,458 110,807
Less accumulated depreciation (10,329) (8,915)
--------- ---------
Operating real estate assets 108,129 101,892
Construction-in-progress and real estate under development 4,991 10,230
--------- ---------
Net real estate assets 113,120 112,122
CASH AND CASH EQUIVALENTS 5,952 3,162
RESTRICTED CASH 622 532
DEFERRED FINANCING COSTS - Net of accumulated amortization of
$138 and $111 at March 31, 1997 and December 31, 1996, respectively 782 658
OTHER ASSETS - Net 285 341
--------- ---------
$ 120,761 $ 116,815
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable $ 69,545 $ 63,342
Accounts payable and accrued expenses 1,442 1,053
Dividends and distributions payable 870 870
Due to affiliates (including retainage payable of $155 and $316 at
March 31, 1997 and December 31, 1996, respectively) 1,076 2,540
Security deposits and prepaid rents 473 462
--------- ---------
Total liabilities 73,406 68,267
COMMITMENTS AND CONTINGENCIES (Note 5)
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP (Note 4) 18,847 19,322
--------- ---------
SHAREHOLDERS' EQUITY:
Preferred shares, $.01 par value, 20,000,000 shares authorized, no shares
issued and outstanding
Common shares, $.01 par value, 100,000,000 shares authorized, 4,186,329
shares issued and outstanding at March 31, 1997
and December 31, 1996, respectively 42 42
Additional paid-in capital 29,379 29,902
Accumulated deficit (913) (718)
--------- ---------
Total shareholders' equity 28,508 29,226
--------- ---------
$ 120,761 $ 116,815
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 3
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
OPERATING REVENUES:
Rental operations $ 4,094 $ 3,089
Other operating income 157 99
----------- -----------
Total operating revenues 4,251 3,188
----------- -----------
OPERATING EXPENSES:
Personnel 439 281
Utilities 275 194
Repairs, maintenance, and landscaping 277 191
Real estate taxes 365 300
Management fees to related party 211 159
Marketing, insurance, and other 244 147
General and administrative expenses 248 147
Depreciation of real estate assets 1,414 996
----------- -----------
Total operating expenses 3,473 2,415
----------- -----------
INCOME FROM OPERATIONS 778 773
----------- -----------
OTHER INCOME (EXPENSES):
Interest income 74 29
Interest expense (1,141) (833)
Amortization of deferred financing costs (27) (36)
Other amortization expense (8) (33)
----------- -----------
Total other income (expenses) (1,102) (873)
----------- -----------
(LOSS) BEFORE MINORITY INTEREST
AND EXTRAORDINARY ITEM (324) (100)
MINORITY INTEREST OF THE UNITHOLDERS
IN THE OPERATING PARTNERSHIP 129 43
----------- -----------
(LOSS) BEFORE EXTRAORDINARY ITEM (195) (57)
EXTRAORDINARY ITEM - Early extinguishment of debt, net of
minority interest of unitholders in the Operating Partnership 0 (93)
----------- -----------
NET (LOSS) $ (195) $ (150)
=========== ===========
PER SHARE DATA:
(Loss) before extraordinary item $ (0.05) $ (0.02)
=========== ===========
Net (loss) $ (0.05) $ (0.05)
=========== ===========
Dividends declared (rounded) $ 0.125 $ 0.119
=========== ===========
Weighted average common shares 4,186,329 2,781,055
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) $ (195) $ (150)
Adjustments to reconcile net (loss) to net cash provided
by operating activities:
Minority interest of unitholders in the Operating Partnership (129) (43)
Depreciation and amortization 1,436 1,051
Extraordinary item 93
Change in assets and liabilities net of amounts acquired:
(Increase) in restricted cash (90) (66)
Decrease (increase) in other assets 48 (73)
Increase in accounts payable and
accrued expenses relating to operations 383 455
(Decrease) in due to affiliates relating to operations (282) (382)
Increase (Decrease) in security deposits and prepaid rent 11 (6)
------- --------
Net cash provided by operating activities 1,182 879
------- --------
INVESTING ACTIVITIES:
Acquisition and construction of real estate assets (2,836) (2,647)
Purchase of furniture, fixtures and equipment (752)
Cash acquired in mergers 165
------- --------
Net cash used in investing activities (3,588) (2,482)
------- --------
FINANCING ACTIVITIES:
Proceeds from mortgage notes payable 6,420 13,178
Principal reductions on mortgage notes payable (203) (7,665)
Payment of loan costs (151) (84)
Proceeds from issuance of shares 4,208
Payment of share and unit issuance costs (330)
Payment of dividends and distributions (870)
------- --------
Net cash provided by financing activities 5,196 9,307
------- --------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 2,790 7,704
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,162 1,404
------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,952 $ 9,108
======= ========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest, net of capitalized interest $ 1,230 $ 175
------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
ROBERTS REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION OF THE COMPANY
Roberts Realty Investors, Inc. (the "Company"), a Georgia corporation,
was formed July 22, 1994 to serve as a vehicle for investments in, and
ownership of, a professionally managed real estate portfolio of
multifamily apartment communities. The Company owns and operates
multifamily residential properties as a self-administered equity real
estate investment trust (a "REIT"). Approximately 88% of the Company's
total apartment units are located in the Atlanta metropolitan area.
The Company conducts all of its operations and owns all of its assets
in and through Roberts Properties Residential, L.P., a Georgia limited
partnership (the "Operating Partnership"), of which the Company is the
sole general partner. As the sole general partner of the Operating
Partnership, the Company controls the Operating Partnership. The Board
of Directors of the Company manages the affairs of the Operating
Partnership by directing the affairs of the Company.
2. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by
the Company's management in accordance with generally accepted
accounting principles for interim financial information in conformity
with the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been
included. The results of operations for the three months ended March
31, 1997 are not necessarily indicative of the results that may be
expected for the full year. These financial statements should be read
in conjunction with the Company's December 31, 1996 audited financial
statements and notes thereto included in the Company's SEC filing on
Form 10-KSB for the fiscal year ended December 31, 1996.
3. MORTGAGE NOTES PAYABLE
On February 27, 1996, the Company received a commitment to provide
financing in the amount of $6,420,000 secured by the Ivey Brook
community. The financing closed on January 30, 1997. The new mortgage
note is in the amount of $6,420,000 at a fixed interest rate of 7.14%
payable in monthly installments of $43,318 based on a 30-year
amortization schedule. The note matures on February 15, 2007. In
connection with the financing, a letter of credit was issued to the
lender in the amount of $1,140,000 with an expiration date of January
30, 1998.
5
<PAGE> 6
In March 1997, the Company received a commitment to provide financing
in the amount of $4,000,000 secured by the second phase of the
Crestmark Community. The second phase of Crestmark is under
construction and was unencumbered at March 31, 1997. The terms of the
financing include a fixed interest rate of 7.65% based on a 30-year
amortization schedule. Management expects the financing to close on or
before June 30, 1997.
In March 1997, the Company and certain non-owned affiliates of the
Company established a $35,000,000 Advised Guidance Line (the "Guidance
Line") with NationsBank N.A. (South) (the "Bank") for the purpose of
providing financing for the acquisition or development of multifamily
communities. Financing under the Guidance Line is available on a
revolving basis and bears interest at LIBOR plus 1.80% or Prime plus
0%, at the option of the borrower, payable monthly. The Guidance Line
is not a commitment to lend and each loan under the Guidance Line will
be made at the Bank's discretion in accordance with normal loan
approval procedures.
4. MINORITY INTEREST
The Company, as the general partner of the Operating Partnership, does
not hold any limited partner interests in the Operating Partnership.
The Company's general partner interest was 60.2% at both March 31, 1997
and December 31, 1996. Units outstanding at March 31, 1997 and December
31, 1996 were 2,773,430. Units held by the minority interest as a
percentage of total Units and Shares outstanding was 39.8% at March 31,
1997 and December 31, 1996. The minority interest of the unitholders in
the Operating Partnership was $18,847,000 and $19,322,000 at March 31,
1997 and December 31, 1996, respectively. Subject to certain
conditions, Units will become exchangeable for cash, or at the option
of the Company, for Shares on a one-for-one basis. The minority
interest of the unitholders in the Operating Partnership is calculated
based on the minority interest ownership percentage multiplied by the
Operating Partnership's net assets (total assets less total
liabilities). The minority interest percentage reflects the number of
Shares and Units outstanding and will change as additional Shares and
Units are issued.
5. COMMITMENTS AND CONTINGENCIES
At December 31, 1996, the Company had outstanding a Letter of Credit in
the amount of $128,000 issued in connection with the commitment for the
financing of the Ivey Brook community. The Letter of Credit was
returned to the Company in February 1997 upon completing the financing
of Ivey Brook on January 30, 1997.
On March 18, 1997, the Company's Board of Directors declared a
distribution in the amount of $0.125 per common Share and unit paid on
April 10, 1997 to shareholders of the Company and Unitholders of the
Operating Partnership of record on March 18, 1997.
6
<PAGE> 7
The Company enters into contractual commitments in the normal course of
business related to the development and construction of real estate
assets. At March 31, 1997, these commitments totaled $12,235,000 as
summarized in the following table:
<TABLE>
<CAPTION>
TOTAL REMAINING
CONTRACT AMOUNT CONTRACTUAL
AMOUNT INCURRED COMMITMENT
------ -------- ----------
<S> <C> <C> <C>
Ivey Brook $ 6,420,000 $6,334,000 $86,000
Crestmark Club - Phase II 3,795,000 3,632,000 163,000
Plantation Trace - Phase II 3,157,000 0 3,157,000
Howell Ferry 8,829,000 0 8,829,000
----------- ---------- -----------
$22,201,000 $9,966,000 $12,235,000
=========== ========== ===========
</TABLE>
Management does not believe that the completion of these commitments
will result in a material adverse effect on the Company's financial
position or results of operations.
6. EXTRAORDINARY ITEMS
The 1996 extraordinary item resulted from the write-off of unamortized
deferred financing costs associated with the January 31, 1996
refinancing of the mortgage note secured by the Highland Park
community. The extraordinary item is net of $70,000 which was allocated
to the minority interest of the unitholders in the Operating
Partnership, calculated on the weighted average number of Units
outstanding during the three months ended March 31, 1996.
7. EARNINGS PER SHARE
Earnings (loss) per common share before extraordinary item and net loss
for the three months ended March 31, 1997 and March 31, 1996 have been
computed by dividing loss before extraordinary item and net loss by the
weighted average number of Shares outstanding during the periods of
4,186,329 and 2,781,055, respectively.
8. SUBSEQUENT EVENTS
On April 1, 1997, the Company acquired from a related party, Roberts
Properties Management, L.L.C. ("Roberts Management"), the management
company that has managed the Company's multifamily apartment
communities since the Company's inception, in exchange for 590,000
Units valued at $10.00 per Unit or $5,900,000 in the aggregate. Because
the Company will now internally manage its properties using the
property management personnel formerly employed by Roberts Management,
the Company will no longer pay 5% of gross property revenues to Roberts
Management for property management services, but instead will bear the
actual overhead cost of managing the properties internally.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
OVERVIEW
Roberts Realty Investors, Inc. (the "Company") owns multifamily residential
properties as a self-administered equity real estate investment trust. As of
March 31, 1997, the Company owns 11 multifamily apartment communities consisting
of 2,194 apartment homes of which 317 are under development or construction. The
following discussion should be read in conjunction with the Consolidated
Financial Statements of Roberts Realty Investors, Inc. and the Notes thereto
appearing elsewhere herein.
RESULTS OF OPERATIONS
Comparison of Three Months Ended March 31, 1997 to Three Months Ended March
31, 1996. The changes in operating results for the three months ended March 31,
1997 compared to the three months ended March 31, 1996 are primarily the result
of increases in the number of apartment homes owned due to: (1) the completion
of construction of the Ivey Brook Community during the first quarter of 1997,
and (2) the acquisition of the Bentley Place and Crestmark Communities in March
1996 and June 1996, respectively. For the three months ended March 31, 1997, the
Company recorded a net loss of $195,000 or $0.05 per share (after minority
interest and extraordinary item) compared to a net loss of $150,000 or $0.05 per
share (after minority interest and extraordinary item) for the three months
ended March 31, 1996. The Company's operating performance is summarized in
the following table:
<TABLE>
<CAPTION>
Percentage
Change from Three Months Ended March 31,
1996 to 1997 1997 1996
------------ ---- ----
<S> <C> <C> <C>
Total operating revenues 33% $4,251,000 $3,188,000
Property operating expenses (1) 42% $1,811,000 $1,272,000
General and administrative expenses 69% $ 248,000 $ 147,000
Depreciation of real estate assets 42% $1,414,000 $ 996,000
Income from operations 0.6% $ 778,000 $ 773,000
Average stabilized occupancy (2) (0.3%) 95.9% 96.2%
Operating expense ratio (3) 2.7% 42.6% 39.9%
</TABLE>
- -----------------------------
(1) Property operating expenses include personnel, utilities, real estate
taxes, insurance, maintenance, landscaping, marketing, management and
other fees.
(2) Represents the average physical occupancy of the Company's stabilized
properties calculated by dividing the total number of vacant days by
the total possible number of vacant days for each period and subtracting
the resulting number from 100%. The first quarter 1997 calculation
does not include Ivey Brook, which started its lease-up phase in
September 1996 and had physical occupancy of 64% on March 31, 1997.
The first quarter 1996 calculation does include the following: (1)
Highland Park beginning March 1, 1996, which is the date the community
achieved stabilized occupancy, and (2) Bentley Place beginning March 1,
1996 which is the date the community was acquired by the Company.
(3) Represents the total of property operating expenses divided by property
operating revenues expressed as a percentage.
8
<PAGE> 9
Operating results for the five communities that were fully stabilized during
both the three months ended March 31, 1996 and the three months ended March 31,
1997 (the Plantation Trace, Preston Oaks, River Oaks, Rosewood Plantation and
Windsong Communities) are summarized as follows:
<TABLE>
<CAPTION>
Percentage
Change from Three Months Ended March 31,
1996 to 1997 1997 1996
------------ ---- ----
<S> <C> <C> <C>
Rental income 1.9% $2,272,000 $2,229,000
Total operating revenues 2.0% $2,341,000 $2,296,000
Property operating expenses (1) 1.9% $ 902,000 $ 885,000
Net operating income 2.0% $1,439,000 $1,411,000
Average stabilized occupancy (2) (1.9%) 96.5% 98.4%
Operating expense ratio (3) 0.0% 38.5% 38.5%
Average monthly rent per unit 3.3% $810 $784
</TABLE>
- ---------------------------------------
(1) Property operating expenses included personnel, utilities, real estate
taxes, insurance, maintenance, landscaping, marketing, management and
other fees.
(2) Represents the average physical occupancy of the stabilized
communities calculated by dividing the total number of vacant days by
the total possible number of vacant days for the three months ended
March 31, 1996 and 1997, and subtracting the resulting number from
100%. (The Company considers a Community to have achieved stabilized
occupancy on the earlier of (a) attainment of 95% occupancy as of the
first day of any month, or (b) one year after completion of
construction.
(3) Represents the total of property operating expenses divided by
property operating revenues expressed as a percentage.
The following discussion encompasses the significant fluctuations in financial
statement amounts dealt with in the Company's comparisons of statements of
operations for the three months ended March 31, 1997 and March 31, 1996.
Rental income increased $1,005,000 or 32.5% from $3,089,000 for the three months
ended March 31, 1996 to $4,094,000 for the three months ended March 31, 1997.
The increase in rental income is due primarily to the following: (1) the
acquisition of the Bentley Place and Crestmark Communities in March 1996 and
June 1996, respectively ($706,000) and (2) the lease-up of the Ivey Brook
Community beginning in the fourth quarter of 1996 ($134,000). Rental income from
Plantation Trace, Preston Oaks, River Oaks, Rosewood Plantation and Windsong,
the five fully stabilized communities included in the Company's portfolio during
both the first quarters of 1996 and 1997, increased $43,000 or 1.9% from
$2,229,000 to $2,272,000.
Property operating expenses (excluding depreciation and general and
administrative expenses) increased $539,000 or 42.4% from $1,272,000 to
$1,811,000. The increase is due primarily to the acquisition of the Bentley
Place and Crestmark Communities ($305,000) and the commencement of property
operations for the Ivey Brook Community ($145,000). Property operating expenses
as a percentage of operating revenues increased from 39.9% during the first
quarter of 1996 to 42.6% during the first quarter of 1997.
Depreciation expense increased $418,000 or 41.9% from $996,000 to $1,414,000.
The increase is due primarily to the following: (1) the acquisition of the
Bentley Place and Crestmark Communities, and (2) the completion of Ivey Brook
Community during the first quarter of 1997 because depreciation expense is
recorded as rental units are completed and available for occupancy.
9
<PAGE> 10
General and administrative expenses increased $101,000 or 68.7% from $147,000 to
$248,000 and include legal, accounting and tax fees, marketing and printing
fees, salaries, director fees and other costs. The increase is due primarily to
the following: (1) the addition of administrative personnel needed to support
the Company's growth, and (2) the Directors and Officers liability insurance
policy obtained by the Company in September 1996. General and administrative
expenses as a percentage of operating revenues increased from 4.6% for the three
months ended March 31, 1996 to 5.8% for the three months ended March 31, 1997.
Interest income increased $45,000 or 155% from $29,000 to $74,000. The increase
is due to higher cash equivalent investment balances during the first quarter of
1997 resulting from the following: (1) the proceeds from the financing of the
Ivey Brook Community in January 1997 for $6,420,000, and (2) increasing cash
flow from operations.
Interest expense increased $308,000 or 37.0% from $833,000 to $1,141,000. The
increase is due primarily to the following: (1) the mortgage debt of $9,861,000
assumed by the Company with the acquisition of the Crestmark Community
in June 1996, and (2) the $15,520,000 in new mortgages secured by the Autumn
Ridge, Bentley Place and Ivey Brook Communities acquired by the Company in March
1996, August 1996, and January 1997, respectively. The higher interest expense
was partially offset by a reduction of $43,000 in interest expense on the River
Oaks Community as a result of the refinancing completed in October 1996.
The mortgage note payable secured by the Highland Park Community was refinanced
in January 1996, prior to its contractual maturity. The unamortized loan costs
related to the mortgage note payable at the time of the refinancing were charged
to expense as an extraordinary item. The extraordinary item (early
extinguishment of a debt) for the three months ended March 31, 1996 was $163,000
(including the minority interests' share of $70,000).
LIQUIDITY AND CAPITAL RESOURCES
10
<PAGE> 11
Comparison of Three Months Ended March 31, 1997 to Three Months Ended March 31,
1996. Cash and cash equivalents increased $2,790,000 during 1997 compared to an
increase of $7,704,000 during 1996. The increase is due to the excess of cash
flow provided by operating and financing activities over cash used in investing
activities.
A primary source of liquidity to the Company is cash flow from operations.
Operating cash flows have historically been determined by the number of
apartment homes, rental rates and operating expenses with respect to such
apartment homes. Net cash provided by operating activities increased $303,000,
or 34.4%, from $879,000 to $1,182,000 due primarily to the acquisition of the
Bentley Place and Crestmark Communities. The highly competitive Atlanta
apartment market is experiencing weaker market conditions which is reflected in
lower occupancy rates and rent concessions. The Company's average stabilized
occupancy decreased 0.3% from 96.2% during the first quarter of 1996 to 95.9%
during the first quarter of 1997. The effects of revenue and expense accruals
are not material in understanding the Company's cash flow from operations.
Generally, depreciation and amortization expenses are the most significant
adjustments to net income (loss) in arriving at cash provided by operating
activities.
Net cash used in investing activities increased $1,106,000 from $2,482,000 for
the three months ended March 31, 1996 to $3,588,000 for the three months ended
March 31, 1997 due primarily to the construction of the Ivey Brook Community and
the second phase of the Crestmark Community during the three months ended March
31, 1997.
Net cash provided by financing activities decreased $4,111,000 from $9,307,000
for the three months ended March 31, 1996 to $5,196,000 for the three months
ended March 31, 1997 due primarily to the following: (1) the net proceeds of the
sale of 443,675 shares in March 1996, and (2) the payment of the quarterly
distribution of $870,000 on Shares and Units in January 1997, with no
distribution having occurred during the three months ended March 31, 1996.
The Operating Partnership acquired the fully operating Bentley Place Community
in March 1996 by issuing Shares. Similarly, the Company issued Shares in March
1996 in an offering of Shares for cash to acquire the land for and fund the
development and construction of the Howell Ferry Community which began in April
1997. The Operating Partnership is also constructing a second phase to the
existing Crestmark Community as well as developing a second phase of Plantation
Trace. The Company anticipates that each Community's rental and other operating
revenues will be adequate to provide short-term liquidity for the payment of
direct rental operating expenses, interest and amortization of principal on
related mortgage notes payable and capital expenditures.
11
<PAGE> 12
The Company expects to meet its other short-term liquidity requirements
generally through its net cash provided by operations. The Company believes that
its net cash provided by operations will be adequate to meet its operating
requirements and to satisfy applicable REIT dividend payment requirements in
both the short-term and in the long-term. Improvements and renovations at
existing Communities are also expected to be funded from property operations.
The Company expects to meet its long-term liquidity requirements, including
future developments, debt maturities and possible acquisitions, through the
issuance of additional equity securities of the Company and the proceeds from
future mortgage financings. Management expects that construction of Howell Ferry
will be funded from an $8,454,000 loan for which the Company has not yet
obtained a commitment and from the Company's working capital. Construction of
the second phase of Plantation Trace will be funded from the Company's working
capital.
On February 27, 1996, the Company received a commitment from Nationwide Life
Insurance Company for a permanent loan to be secured by Ivey Brook. The
financing was completed on January 30, 1997. The principal amount of the note is
$6,420,000 at a fixed interest rate of 7.14% per annum for a ten-year term.
Based on a 30-year amortization schedule, the monthly payment of principal and
interest on the loan is $43,318.
In March 1997, the Company received a commitment to provide financing in the
amount of $4,000,000 secured by the second phase of the Crestmark Community. The
second phase of Crestmark is under construction and was unencumbered at March
31, 1997. The terms of the financing include a fixed interest rate of 7.65% and
a 30-year amortization schedule. The financing is expected to close on or before
June 30, 1997.
In March 1997, the Company and certain non-owned affiliates of the Company
established a $35,000,000 Advised Guidance Line (the "Guidance Line") with
NationsBank N.A. South (the "Bank") for the purpose of providing financing for
the acquisition or development of multifamily communities. Financing under the
Guidance Line is available on a revolving basis and bears interest at LIBOR
plus 1.80% or Prime plus 0%, at the option of the borrower, payable monthly.
The Guidance Line is not a commitment to lend, and each loan under The
Guidance Line will be made at the Bank's discretion in accordance with normal
loan approval procedures.
12
<PAGE> 13
The Company's existing mortgage indebtedness will require balloon payments
coming due over the years 2000 to 2007 as summarized below:
<TABLE>
<S> <C>
2000 $11,253,000
2001 15,238,000
2002 8,025,000
2003 16,057,000
2006 7,535,000
2007 5,570,000
-----------
Total $63,678,000
===========
</TABLE>
Because the Company anticipates that only a small portion of the principal of
such indebtedness will be repaid prior to maturity and that the Company may not
have funds on hand sufficient to repay such indebtedness, it will be necessary
for the Company to refinance such debt through (a) debt financing collateralized
by mortgages on individual Communities or groups of Communities or
uncollateralized private or public debt offerings, and/or (b) additional equity
offerings.
Management believes that these sources of debt financing, equity capital,
operating cash flow and working capital of the Company will provide the
liquidity and adequate capital resources to begin and complete its planned
development and construction activities. The Company expects liquidity and
capital resources for additional acquisition and development to be provided by a
combination of secured long-term borrowing and issuance of equity securities.
FUNDS FROM OPERATIONS
The Company considers Funds From Operations ("FFO") to be an important measure
of its operating performance. While FFO does not represent cash flows from
operating, investing or financing activities as defined by generally accepted
accounting principles ("GAAP"), FFO does provide investors with additional
information with which to evaluate the ability of a REIT to pay dividends, meet
required debt service payments and fund capital expenditures. The Company
believes that in order to gain a clear understanding of its operating results,
FFO should be evaluated in conjunction with net income (determined in accordance
with GAAP). Based on published recommendations of a task force of the National
Association of Real Estate Investment Trusts ("NAREIT") during the first quarter
of 1995, the Company defines FFO as net income (loss) computed in accordance
with GAAP, excluding non-recurring items and net realized gains (losses), plus
depreciation of real property and minority interest of Unitholders in the
Operating Partnership. Funds From Operations should not be considered as an
alternative to net income (determined in accordance with GAAP) as an indication
of the Company's financial performance, or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of liquidity. The
following table reconciles net income (loss) to FFO (dollars in thousands).
13
<PAGE> 14
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
---- ----
<S> <C> <C>
Net loss $ (195) $ (150)
Add: Minority interest of Unitholders (129) (43)
Add: Extraordinary item 93
Add: Amortization (real estate related) 8 33
Add: Depreciation expense 1,414 996
----------- -----------
Funds From Operations $ 1,098 $ 929
=========== ===========
Weighted average Shares and Units
outstanding during the period 6,959,759 4,873,603
</TABLE>
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Effective January 1, 1996, the Company adopted Statement of Financial Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. Such adoption had no material effect on the
financial statements.
INFLATION
Substantially all apartment leases are for an initial term of not more than 12
months and thus may enable the Company to seek increases in rents after the
expiration of each lease. Additionally, the construction contracts for the
Howell Ferry Community and for the second phase of Plantation Trace will be at
fixed prices and equal substantially all of the anticipated construction costs.
The short-term nature of these leases and the fixed price construction
contracts serve to reduce the risk to the Company of the adverse effects of
inflation.
14
<PAGE> 15
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The exhibits required by Item 601 of Regulation SB are described
in the following Index to Exhibits and are filed as part of this report on Form
10-QSB.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.5.12 Real Estate Note A executed by Roberts Properties Residential,
L.P. in favor of Nationwide Life Insurance Company, dated January
30, 1997, in the original principal amount of $5,670,000.00 (Ivey
Brook - formerly Holcomb Bridge). [Incorporated by reference to
Exhibit 10.5.12 from the Company's annual report on Form 10-KSB for
the year ended December 31, 1996.]
10.5.13 Real Estate Note B executed by Roberts Properties Residential,
L.P. in favor of West Coast Life Insurance Company, dated January
30, 1997, in the original principal amount of $750,000.00 (Ivey
Brook). [Incorporated by reference to Exhibit 10.5.13 from the
Company's annual report on Form 10-KSB for the year ended December
31, 1996.]
10.5.14 Deed to Secure Debt and Security Agreement executed by Roberts
Properties Residential, L.P. in favor of Nationwide Life Insurance
Company and West Coast Life Insurance Company, dated January 30,
1997, and related collateral documents (Ivey Brook). [Incorporated
by reference to Exhibit 10.5.14 from the Company's annual
report on Form 10-KSB for the year ended December 31, 1996.]
10.5.15 Agreement Regarding Letter of Credit by Roberts Properties
Residential, L.P. for the benefit of Nationwide Life Insurance
Company and West Coast Life Insurance Company, dated January 30,
1997 (Ivey Brook). [Incorporated by reference to Exhibit 10.5.14
from the Company's annual report on Form 10-KSB for the year ended
December 31, 1996.]
10.5.16 Guaranty executed by Roberts Realty Investors, Inc. in favor of
Nationwide Life Insurance Company and West Coast Life Insurance
Company, dated January 30, 1997 (Ivey Brook). [Incorporated
by reference to Exhibit 10.5.16 from the Company's annual report on
Form 10-KSB for the year ended December 31, 1996.]
10.17 Letter Agreement between NationsBank, N.A. (South), Charles S.
Roberts, Roberts Properties Residential, L.P., Roberts Properties,
Inc., and Roberts Realty Investors, Inc. dated March 6, 1997
regarding the establishment of an Advised Guidance Line in the amount
of up to $35,000.000.
27. Financial Data Schedule.
</TABLE>
15
<PAGE> 16
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter for which this report on Form 10-QSB is filed.
SIGNATURES
In accordance with Section 12 of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ROBERTS REALTY INVESTORS, INC.
Date: May 15, 1997 By:/s/ Charles S. Roberts
------------------------------------
Charles S. Roberts, Chairman of the
Board, Chief Executive Officer, and
President
Date: May 15, 1997 By:/s/ Charles R. Elliott
------------------------------------
Charles R. Elliott
Chief Financial Officer
16
<PAGE> 1
EXHIBIT 10.17
ADVISED GUIDANCE LINE
[LETTERHEAD] NATIONSBANK
March 6, 1997
Mr. Charles S. Roberts
Roberts Properties Residential, L.P.
Roberts Properties, Inc.
Roberts Realty Investors, Inc.
8010 Roswell Road, Suite 120
Atlanta, Georgia 30350
Gentlemen:
This letter confirms the establishment by NationsBank, N.A. (South)
(the "Bank") of its Advised Guidance Line ("AGL") pursuant to which Bank will
make available certain credit or loans to Roberts Properties Residential, L.P.
("RPR"), Roberts Properties, Inc. ("RPI"), or an entity (collectively, the
"Subsidiaries") controlled by RPR, RPI or Charles S. Roberts ("Roberts") or in
which any of RPR, RPI or Roberts is the general partner or managing member, and
which loans are to be guaranteed by RPR, RPI, Roberts and/or Roberts Realty
Investors, Inc. ("RRI"), all as provided and upon and subject to the terms and
conditions set forth in the term sheet attached hereto as Exhibit "A" and made a
part hereof (the "AGL Term Sheet"). RPR, RPI and the Subsidiaries may be herein
referred to as the context requires as the "Borrower", and RPR, RPI, Roberts and
RRI may be herein referred to as the context requires as the "Guarantors".
This letter confirms and advises Borrower and Guarantors of the
establishment of the AGL. This letter and the AGL are not commitments to lend.
Any loan under the AGL shall be made in Bank's discretion and shall in any case
be subject to the terms and provisions of the AGL Term Sheet and such other
terms and conditions as Bank may impose on a case by case basis. Upon review of
a request submitted by Borrower for a loan under the AGL and Bank's
determination in its discretion to make such loan, Bank shall issue, and the
approved Borrower (and as applicable, Guarantors) shall execute a commitment
letter for such loan or loans in Bank's usual and customary form for such
commitment letter, including Bank's standard conditions, subject only to such
modification to such commitment letter as may be required by the specifics of
the loan transaction as approved by Bank. Bank shall be under no obligation to
make a loan to Borrower, whether pursuant to or under the AGL or otherwise,
without a loan commitment letter signed by the relevant Borrower, and as
applicable, by Guarantors. Likewise, no Borrower is under any obligation to take
any loan from Bank, and no Guarantor is obligated to guarantee any loan, except
in accordance with a loan commitment letter signed by the relevant Borrower,
and, as applicable, by one or more Guarantors.
<PAGE> 2
Also, in addition to the terms and conditions of the AGL as set forth
in the AGL Term Sheet and of any particular commitment for a loan to be made
under the AGL, Bank may condition issuance of a commitment for or closing of a
loan upon provision by Borrower of certain representations and warranties
concerning Borrower (and each of them), Guarantors (and each of them), and the
business enterprise and operations of Borrower and Guarantors.
Please execute your understanding and agreement with respect to the
foregoing by executing the enclosed additional copies of this letter in the
spaces indicated below and including a date of execution.
Sincerely,
NATIONSBANK, N.A. (SOUTH)
By: /s/ Donna W. Friedel
-----------------------------------------
Donna W. Friedel, Senior Vice President
Understood and agreed
this 6th day of March, 1997.
/s/ Charles S. Roberts (SEAL)
- ----------------------------
Charles S. Roberts
Roberts Properties Residential, L.P.,
a Georgia limited partnership
By: Roberts Realty Investors, Inc.,
its sole general partner
By: /s/ Charles S. Roberts
----------------------------
Name: President
----------------------------
Title: Charles S. Roberts
----------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
-2-
<PAGE> 3
Roberts Properties, Inc.,
a Georgia corporation
By: /s/ Charles S. Roberts
----------------------------------
Name: Charles S. Roberts
----------------------------
Title: President
----------------------------
(CORPORATE SEAL)
Roberts Realty Investors, Inc.,
a Georgia corporation
By: /s/ Charles S. Roberts
----------------------------------
Name: Charles S. Roberts
----------------------------
Title: President
----------------------------
(CORPORATE SEAL)
-3-
<PAGE> 4
Exhibit "A"
ROBERTS PROPERTIES, INC. AND AFFILIATES ADVISED GUIDANCE LINE
FOR LOANS SECURED BY FIRST MORTGAGES
MARCH 5, 1997
PURPOSE: To provide an advised guidance line to be used to
finance the acquisition of land and the acquisition
or development of multifamily communities in the
Southeastern U.S.
BORROWER: Depending on the project, the Borrower will be one of
the following.
1) Roberts Properties Residential, L.P. ("RPR");
2) Roberts Properties, Inc. ("RPI"); or
3) a stand alone entity whose managing member or
managing general partner is RPR, RPI, Charles S.
Roberts ("Roberts") or an entity controlled by RPR,
RPI or Roberts.
ADVISED GUIDANCE LINE Up to $35,000,000 shall be available in the aggregate
AMOUNT: on a revolving basis. (Each individual loan made
under the guidance line will be known as a "Net Loan"
herein.)
ADVISED GUIDANCE LINE 1) Up to an aggregate of $5,000,000 of the
LAND SUBLIMITS: $35,000,000 shall be available for land loans on a
revolving basis.
2) Up to an aggregate of $2,500,000 of the $5,000,000
land loan sublimit can be used for land loans where
the land is not currently zoned for multifamily use.
NET LOAN AMOUNT Lesser of the following.
(CONSTRUCTION LOAN FOR 1) 75% of final accepted appraised value;
A DEVELOPMENT PROJECT 2) 80% of final approved full cost budget;
OR ACQUISITION LOAN FOR 3) that derived loan amount using a 1.20X DSC, 30
A COMPLETED PROJECT): year amortization and the greater of 9% or 250 basis
points over the then 7-year U.S. Treasury Bond yield.
For an acquisition, the amortization period used to
derive the constant will be 30 years less the
effective depreciation of the property; or
4) the amount available under the subject revolving
line.
NET LOAN AMOUNT Lesser of the following.
(LAND LOAN): 1) 80% of final accepted appraised value;
2) 80% of final approved acquisition cost (if the
land has been held by the borrowing entity, a
directly controlled entity or an affiliate of the
entity in excess of three years, and a current
appraisal indicates a value higher than cost, then
80% of value may be used to determine loan amount);
or
3) the amount available under the appropriate
revolving line sublimit for land.
<PAGE> 5
ROBERTS PROPERTIES, INC. ETAL.
PAGE 2
EQUITY REQUIREMENTS: Cash equity to be upfront. For construction loans,
equity can include the unencumbered land (at the
lower of cost or appraised value, except that
appraised value, if higher, can be used under the
conditions described in the previous section) and
cash. The cash portion of the equity will be
substantiated to the bank and will not be escrowed.
INTEREST RATE: Libor + 1.80% or Prime + 0%, at the option of
Borrower; payable monthly.
COMMITMENT FEE (EACH .25% of each Net Loan Amount payable at each Net Loan
LOAN OTHER THAN LAND closing.
LOANS):
COMMITMENT FEE (EACH .50% of each Net Loan Amount payable at each Net Loan
LAND LOAN): closing.
TERM (ADVISED 24 months from closing of guidance line.
GUIDANCE LINE):
TERM (ALL LOAN TYPES): 24 month original term plus one 11 month renewal
option.
PRINCIPAL AMORTIZATION During the renewal period, if granted, principal
(CONSTRUCTION LOAN): shall be amortized on a 30 year amortization schedule
based on the greater of 9% or 250 basis points over
the 7-year Treasury at original closing of the Net
Loan, payable monthly.
PRINCIPAL AMORTIZATION From inception of the Net Loan and during the renewal
(ACQUISITION LOAN FOR A period, if granted, principal shall be amortized on a
COMPLETED PROJECT): 30 year amortization schedule based on the greater of
9% or 250 basis points over the 7-year Treasury at
original closing of the Net Loan, payable monthly.
RENEWAL OPTION One 11 month extension option subject to the
(CONSTRUCTION LOAN OR following:
ACQUISITION LOAN FOR A
COMPLETED PROJECT): 1) 30 day (and no greater than 90 day) written notice
of intention to exercise the option;
2) no event of default having occurred or occurring
on the guidance line or any Net Loan made under it
(per the provisions of the Cross-Default section of
this term sheet);
3) achievement of Minimum Property Performance
Criteria (as defined below) for 120 consecutive days
immediately prior to exercising option to extend;
4) acceptable financial condition review of the
borrower and guarantors; and
5) payment of the renewal option fee.
Minimum Property Performance Criteria will include
the following.
1) Achievement of NOI for a consecutive 120 days
immediately prior to exercising the option which,
when annualized, can support debt service on the
property at a minimum of 1.20x.
<PAGE> 6
ROBERTS PROPERTIES, INC. ETAL.
PAGE 3
NOI shall be defined as 120 day annualized gross
income from leases in occupancy and paying rent
(using a vacancy factor which is the greater of 5% or
actual vacancy) LESS expenses which are the greater
of actual 120 day annualized expenses or final
underwriting expenses (both include accruals and
reserves). The debt service is calculated by assuming
a 30 year amortization schedule and an interest rate
at 250 basis points over the then 7-year Treasury
bond yield (minimum of 9%).
2) NOI as defined above must be sufficient to service
the actual interest payments and principal reductions
on the NationsBank Net Loan at 1.20x.
3) A maximum 75% loan-to-value must be achieved.
4) A written representation must be made by Borrower
that no event is then known which could materially
and adversely effect NOI.
RENEWAL OPTION (LAND One 11 month extension option subject to the
LOAN): following:
1) 30 day (and no greater than 90 day) written notice
of intention to exercise the option;
2) no event of default having occurred or occurring
on the guidance line or any Net Loan made under it
(per the provisions of the Cross-Default section of
this term sheet);
3) achievement of loan-to-value not to exceed 80%;
4) acceptable financial condition review of the
borrower and guarantors; and
5) payment of the renewal option fee.
RENEWAL OPTION FEE: .25% of the Net Loan amount.
COLLATERAL: 1) First lien on the land and improvements.
2) Assignment of rents and leases, construction and
architectural contracts, etc.
3) Assignment of the permanent loan takeout if one is
issued.
4) The various Net Loans under the guidance line will
not be cross-collateralized.
PROPERTY TYPE: 1) Expected properties to be offered for
consideration will include garden style and mid-rise
multifamily projects to be acquired or developed in
the Southeastern U.S.
2) Land for future multifamily development will also
be acceptable. If land is presented for consideration
(with the exception of the $2.5MM sublimit), all
zoning approvals must have been given, with the
exception of site plan-type approvals, which must be
considered a low risk to obtain. Transportation,
utility services, and site access must be low risk
issues for the planned development ultimately to
obtain certificates of occupancy.
3) NationsBank shall have the unconditional right to
refuse to lend against any property.
<PAGE> 7
ROBERTS PROPERTIES, INC. ETAL.
PAGE 4
CROSS-DEFAULT: Net Loans made under the line will not be
cross-defaulted; however, a default on one Net Loan
under the line will mean that no new Net Loans will
be closed and previously closed Net Loans will not be
renewed until the default is cleared to the bank's
satisfaction. For purposes of this provision, the
loans to RPR and RPR-related entities will be treated
as one separate group and the loans to
RPI/Roberts/RPI-related entities will be treated as a
second separate group. Defaults that may occur in one
group will not effect the other group.
GUARANTIES: 1) If the Borrower is RPR directly - The Net Loan
will be full recourse to RPR and 100% direct,
unconditional joint and several guaranty of payment
and performance with respect to the completion of the
project, environmental indemnity, interest and
principal from Roberts Realty Investors, Inc. ("RRI")
will be required.
2) If the Borrower is an entity controlled by RPR -
The Net Loan will be full recourse to the Borrower
and 100% direct, unconditional joint and several
guaranty of payment and performance with respect to
the completion of the project, environmental
indemnity, interest and principal from RPR and RRI
will be required.
3) If the Borrower is RPI or an entity controlled by
RPI or Roberts The Net Loan will be full recourse to
the Borrower and 100% direct, unconditional joint and
several guaranty of payment and performance with
respect to the completion of the project,
environmental indemnity, interest and principal from
RPI (including subsidiaries) and Charles Roberts will
be required.
4) If the Borrower is such that a Roberts guaranty is
required, but the loan is for the acquisition of a
completed property which is currently, and has been,
stabilized for a period of time acceptable to bank
(at or above 93% occupied for at least 12 months) and
the Borrower does not anticipate performing any
significant rehab work on the project, then the loan
will not be guarantied by Roberts. The loan will
still be fully recourse to the Borrower. This type of
transaction is anticipated to be very rare and will
be very closely reviewed by the bank.
OTHER REQUIREMENTS: At a minimum, the following acceptable to
NationsBank:
-Thorough review of the Roberts group of companies to
include, but not be limited to, their organization,
strategies, principals, current and planned projects
and financial status.
-Review of financial statement and organizational
structure of each individual Borrower for each Net
Loan.
-Environmental site assessment dated within six
months of closing of Net Loan.
-Certification that no hazardous substances are
present on the site.
-Market underwriting.
<PAGE> 8
ROBERTS PROPERTIES, INC. ETAL.
PAGE 5
-Front end cost and document review.
-Review of final full cost budget.
-Receipt, review and acceptance of appraisal
indicating a maximum loan-to-value of 75% (80% for
land loans).
-Legal documentation.
-Acceptable general contractor with acceptable fixed
price contract and bonding. (No general contractor
bonding required if Roberts Properties Construction
is used; however, NationsBank will retain its right
to require bonding of major subs on a case-by-case
basis.)
-Site plan, specifications, survey, soils report,
etc.
-Adequate hard cost (minimum 5%) and soft cost
contingency amounts.
-Adequate interest and operating deficit reserves.
-NationsBank will reserve the right to obtain an
appraisal (at Borrower's expense) no more frequently
than once every 12 months (except in a default
situation where an appraisal can be ordered at the
bank's discretion) and a loan-to-value equal to or
less than 75% (80% for land loans) must be indicated
at all times.
-Takeout agreement, if one is issued.
-Tri-Party Agreement (if there is a takeout),
including approval by NationsBank and takeout party
of all documentation, including, but not limited to,
appraisal, third party inspecting architect,
contractor, ESA, final budget, full cost and document
review, architects, plans and specs, soils report,
site inspection, survey, title, notice and
opportunity to cure provisions, and survey.
FEES AND EXPENSES: All fees to be paid by Borrower for guidance line
matters as well as Net Loan matters, including, but
not limited to, legal, inspection, environmental,
front end costs and document review, and appraisal.
CONFIDENTIALITY: THE FRAMEWORK IS DELIVERED TO YOU WITH THE
UNDERSTANDING THAT NEITHER IT NOR ITS SUBSTANCE WILL
BE DISCLOSED TO ANY THIRD PARTY, EXCEPT WHERE
DISCLOSURE IS REQUIRED BY LAW.
IT MUST BE UNDERSTOOD THAT THE ABOVE IS ONLY A FRAMEWORK GENERALLY OUTLINING
TERMS WHICH HAVE BEEN APPROVED BY NATIONSBANK.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ROBERTS PROPERTIES FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 1997 AND MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> MAR-31-1997 MAR-31-1996
<EXCHANGE-RATE> 1 1
<CASH> 5,952 3,162
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 7,641 4,693
<PP&E> 123,449 121,037
<DEPRECIATION> (10,329) (8,915)
<TOTAL-ASSETS> 120,761 116,815
<CURRENT-LIABILITIES> 3,861 4,925
<BONDS> 69,545 63,342
0 0
0 0
<COMMON> 42 42
<OTHER-SE> 28,466 29,184
<TOTAL-LIABILITY-AND-EQUITY> 120,761 116,815
<SALES> 4,094 3,089
<TOTAL-REVENUES> 4,325 3,217
<CGS> 0 0
<TOTAL-COSTS> 3,473 2,415
<OTHER-EXPENSES> 8 33
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,168 869
<INCOME-PRETAX> (324) (100)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (324) (100)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 (93)
<CHANGES> 0 0
<NET-INCOME> (195) (150)
<EPS-PRIMARY> (.05) (.05)
<EPS-DILUTED> (.05) (.05)
</TABLE>
