As filed with the Securities and Exchange Commission on June 12, 1998
Registration No. 333-32445
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-3
to
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WELLSFORD REAL PROPERTIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Maryland 13-3926898
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
610 Fifth Avenue
New York, New York 10020
(212) 333-2300
(Address and Telephone Number of Principal Executive Offices)
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Edward Lowenthal
Wellsford Real Properties, Inc.
610 Fifth Avenue
New York, New York 10020
(212) 333-2300
(Name, Address and Telephone Number of Agent for Service)
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Copies to:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
(212) 541-2000
Attention: Alan S. Pearce, Esq.
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Approximate date of commencement of the proposed sale to the public:
From time to time after the effective date of this Registration Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 12, 1998
PROSPECTUS
12,242,719 Shares
WELLSFORD REAL PROPERTIES, INC.
Common Stock
This Prospectus relates to the registration of 12,242,719 shares (the
"Shares") of Common Stock, $.01 par value per share (the "Common Stock"), of
Wellsford Real Properties, Inc. (the "Company"). The Shares were issued by
the Company in private placements. All of the Shares offered hereby are
being registered for resale by the holders thereof and their beneficiaries,
pledgees, transferees, successors-in-interest and assignees (collectively,
the "Selling Shareholders"). See "Selling Shareholders." The Company will
not receive any of the proceeds from the sale of the Shares.
The Shares are listed on the American Stock Exchange (the "ASE") under
the symbol "WRP." On June 11, 1998, the last reported sale price of the
Company's Common Stock on the ASE was $13.625 per share.
Any sale by a Selling Shareholder will be made through customary
brokerage channels or private sales and may be made on the ASE, in the over-
the-counter market or otherwise at prices to be determined at the time of
such sales. See "Plan of Distribution."
No underwriter is being used in connection with the registration of the
Shares and, accordingly, the Shares are being offered without any
underwriting discounts. Normal brokerage commissions, discounts and fees are
payable by the Selling Shareholders.
For a discussion of certain matters which should be considered by
prospective investors, see "Risk Factors" beginning on page 5.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION")
OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _________ __, 1998
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the captions "The Company," "Risk Factors" and
elsewhere in this Prospectus constitute "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of the Company or industry results to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such factors include, among others, the following, which
are discussed in greater detail under "Risk Factors" herein: general
economic and business conditions, which will, among other things, affect
demand for commercial and residential properties, availability and credit
worthiness of prospective tenants, lease rents and the availability of
financing; difficulty of locating suitable investments; competition; risks of
real estate acquisition, development, construction and renovation; vacancies
at existing commercial properties; dependence on rental income from real
property; adverse consequences of debt financing; risks of investments in
debt instruments, including possible payment defaults and reductions in the
value of collateral; risks associated with equity investments in and with
third parties, such as the investment in Wellsford/Whitehall Properties,
L.L.C., a joint venture with an affiliate of Goldman, Sachs & Co.;
illiquidity of real estate investments; lack of prior operating history; and
other changes and factors referenced in this Prospectus.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected and copied
at the public reference facilities maintained by the Commission at its
offices at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at Seven
World Trade Center, 13th Floor, New York, New York 10048 and at Northwestern
Atrium Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661-
2511. Copies of such materials can be obtained by mail from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Additionally, the
Commission maintains a Web site containing reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of the Commission's Web site
is: http://www.sec.gov. In addition, the Company's Common Stock is listed on
the ASE and reports, proxy statements and other information concerning the
Company may also be inspected at the offices of the ASE, 86 Trinity Place,
New York, New York 10006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations promulgated thereunder,
with respect to the Shares offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto, as permitted by the rules and regulations of the
Commission. Statements contained in this Prospectus as to the contents of
any contract or other document which is filed as an exhibit to the
Registration Statement are not necessarily complete, and each statement is
qualified in its entirety by reference to the full text of such contract or
document. For further information with respect to the Company and the Shares
offered hereby, reference is made to the Registration Statement, including
the exhibits thereto and the financial statements, notes and schedules filed
as a part thereof, which may be inspected and copied at the public reference
facilities of the Commission referred to above.
The Company furnishes stockholders with annual reports containing
audited financial statements. The Company also furnishes its common
stockholders with proxy material for its annual meetings complying with the
proxy requirements of the Exchange Act.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents which have been filed by the Company with the
Commission are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. The Company's 1998 Proxy Statement for Annual Meeting of
Stockholders dated April 29, 1998.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
4. The Company's Current Report on Form 8-K dated January 7, 1998 and
filed with the Commission on January 8, 1998.
5. The Company's Current Report on Form 8-K dated January 15, 1998 and
filed with the Commission on January 15, 1998.
6. The Company's Current Report on Form 8-K dated March 3, 1998 and
filed with the Commission on March 4, 1998.
7. The Company's Current Reports on Form 8-K and Form 8-K/A Amendment
No.1 each dated April 28, 1998 and filed with the Commission on April 28,
1998 and May 13, 1998, respectively.
8. The Company's Current Report on Form 8-K/A Amendment No.2 dated May
15, 1998 and filed with the Commission on May 28, 1998.
9. The combined statement of revenues and certain expenses of the
Whitehall Properties, the statement of revenues and certain expenses of
Mountain Heights Office Center, the statement of revenues and certain
expenses of Sonterra at Williams Centre, the consolidated financial
statements of Value Property Trust ("VLP"), the combined statement of
revenues and certain expenses of The Abbey Companies, Inc. and its affiliates
("The Abbey Companies") and the combined statement of revenue and certain
expenses of the DFW Trade Center I, L.P., Buildings 1, 2 and 3, each
contained in the Company's registration statement on Form S-4 (Registration
No. 333-42277), and all amendments thereto.
10. The Quarterly Report on Form 10-Q for the quarter ended December 31,
1997 of VLP.
11. The description of the Common Stock contained in the Company's
registration statement on Form 10 (Registration No. 001-12917) pursuant to
Section 12 of the Exchange Act and all amendments and reports filed for the
purpose of updating that description.
12. All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since December 31, 1997.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in and to
be a part of this Prospectus from the date of filing of such reports and
documents.
Any statement contained herein or in a document which is incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement in any subsequently filed
document that is also deemed to be incorporated by reference herein modifies
or supersedes such prior statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any and all documents incorporated by reference in this Prospectus
(not including exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information). Such requests
should be directed to Wellsford Real Properties, Inc., Attention: Kim Ezzy,
610 Fifth Avenue, New York, New York 10020 (telephone (212) 333-2300).
THE COMPANY
Unless the context indicates otherwise, all references to the Company
shall include the Company's subsidiaries and affiliated entities.
General
Wellsford Real Properties, Inc. was formed on January 8, 1997, as a
corporate subsidiary of Wellsford Residential Property Trust ("Wellsford
Residential"), a Maryland real estate investment trust. The Company began to
operate independently on May 30, 1997, following consummation of a series of
transactions, including the contribution by Wellsford Residential of certain
of its assets to the Company, the distribution to the holders of common
shares of beneficial interest of Wellsford Residential of all of the shares
of Common Stock of the Company owned by Wellsford Residential and the
subsequent merger of Equity Residential Properties Trust, a Maryland real
estate investment trust, into Wellsford Residential.
The Company is a real estate merchant banking firm which acquires,
develops and operates real properties and invests in the debt and equity
securities of private and public real estate companies. Management is
concentrating its efforts on defining and building focused operating
businesses with recurring sources of income. The Company intends to maximize
shareholder value over time through growth in cash flow and net asset value
per share.
The Company has established three strategic business units ("SBUs")
within which it intends to execute its business plan: an SBU for commercial
property operations which is held in its 99.9% subsidiary, Wellsford
Commercial Properties Trust ("WCPT"), an SBU for debt and equity activities
and an SBU for property development and land operations.
The Company currently does not intend to qualify as a REIT under the
Code. Consequently, the Company has the flexibility to respond quickly to
opportunities without the structural limitations inherent in REITs and to
operate, when deemed advantageous by management, on a more highly leveraged
basis than most REITs. The Company does intend to elect REIT status for
certain of its subsidiaries or affiliates when management deems it beneficial
to the Company's shareholders. By not qualifying as a REIT under the Code
(which would require the Company to distribute each year at least 95% of its
net taxable income, excluding capital gains), the Company has the ability and
currently intends to retain for reinvestment its cash flow generated from
operations and to sell properties without the substantial income tax
penalties which may be imposed on REITs in such transactions. In addition,
the Company differs from opportunity funds that are typically structured as
private partnerships. In that regard, the business of the Company is
conducted without the payment of acquisition, disposition or advisory fees to
general partners which should result in additional cash flow being available
for reinvestment as well as mitigate the potential for conflicts of interest.
In addition, unlike investors in opportunity funds, the Company's
shareholders are expected to have enhanced liquidity through their ability to
sell or margin their stock. The Company also hopes to attract a broader
range of investors because there is no stipulated investment minimum.
However, unlike REITs and opportunity funds, the Company is subject to
corporate level taxation.
To date, management of the Company has implemented its business strategy
through the following transactions: (i) the formation, together with WHWEL
Real Estate Limited Partnership ("Whitehall"), an affiliate of Goldman Sachs
& Co., of Wellsford/Whitehall Properties, L.L.C. ("Wellsford Commercial"),
which currently owns and operates 27 office buildings containing an aggregate
of approximately 3.4 million square feet, including the acquisition of 13
office buildings containing an aggregate of approximately 1,000,000 square
feet acquired in May 1998 from Saracen Properties, Inc. for approximately
$146 million; (ii) the merger in February 1998 of a wholly-owned subsidiary
of the Company into VLP in which the Company paid cash and issued stock
having a combined value of approximately $169 million, with the surviving
entity ("Wellsford Capital") becoming a wholly-owned subsidiary of the
Company (the "Value Merger"), and the subsequent sale by Wellsford Capital of
13 of the 20 properties acquired pursuant to the Value Merger for
approximately $65 million, resulting in Wellsford Capital owning seven
properties consisting of three office properties, two industrial properties,
one office/industrial property and one retail property; (iii) a $25 million
subordinated secured mezzanine loan with respect to a class A office building
located at 277 Park Avenue, New York City; (iv) a 50% junior participation in
a $120 million secured credit facility (the "Abbey Credit Facility") with an
owner and operator of office, industrial and retail properties in Southern
California; (v) the IPH Mezzanine Facility, an approximately $32.5 million
secured subordinated credit facility entered into by Fleet Real Estate, Inc.
with the owner of industrial properties in Texas, in which Wellsford
Ventures, Inc. ("Ventures"), a wholly-owned subsidiary of the Company, agreed
to advance up to 50%; as of December 31, 1997, Ventures had advanced
approximately $9.8 million and the IPH Mezzanine Facility was repaid in
February 1998 at which time the Company received a total of $0.8 million in
interest and fees; (vi) a 25% participation in a $60 million secured
subordinated loan made by BankBoston, N.A., Morgan Stanley Senior Funding,
Inc. and certain other lenders with respect to a master-planned residential
community known as the Woodlands located north of Houston pursuant to which
the Company has advanced $15 million; (vii) the acquisition in January 1998
of a 344-unit class A residential apartment complex in Tucson, Arizona known
as "Sonterra at Williams Centre" for approximately $20.5 million; (viii) an
approximate 80% interest in Phases I, II, III and IV and an option to acquire
(at a fixed price) and develop Phase V of, a 1,880-unit class A multifamily
development known as "Palomino Park," located in a suburb of Denver,
Colorado, of which 560 units have been completed; (ix) the acquisition of a
49% interest in Creamer Realty Consultants, a real estate advisory and
consulting firm, and formation of Creamer Vitale Wellsford, L.L.C., which
together with Creamer Realty Consultants and Prudential Real Estate
Investors, established the Claiborne Investors Mortgage Investment Program to
make investments in large syndicated mortgage loan transactions;(x) a $50
million two-year line of credit (extendible for one year) which the Company
obtained from BankBoston, N.A. and Morgan Guaranty Trust Company of New York
(the "Line of Credit"); and (xi) a $375 million loan facility which Wellsford
Commercial received from BankBoston, N.A. and Goldman Sachs Mortgage Company
(the "Loan Facility"), consisting of a secured term loan facility of up to
$225 million and a secured revolving credit facility of up to $150 million.
The Company is a Maryland corporation which was incorporated on January
8, 1997. The Company's principal executive offices are located at 610 Fifth
Avenue, New York, New York 10020 and its telephone number is (212) 333-2300.
RISK FACTORS
In addition to other matters, prospective investors should carefully
consider the following risk factors before making an investment in the
Shares:
General Risks
If the properties of the Company, the properties of those entities in
which it invests or the properties of those entities to which it lends
(collectively, the "Properties") do not generate revenue sufficient to meet
operating expenses, including debt service and capital expenditures, the
financial condition and results of operations of the Company may be adversely
affected. The Company's financial condition and results of operations may
also be adversely affected by a number of other factors, including
international and domestic general economic climate and local real estate
conditions (such as oversupply of or reduced demand for space and changes in
market rental rates); the perceptions of prospective tenants of the safety,
convenience and attractiveness of the Properties; the ability of the owner to
provide adequate management, maintenance and insurance; energy and supply
shortages; the ability to collect on a timely basis all rent from tenants and
interest from borrowers; the expense of periodically renovating, repairing
and reletting spaces; and increasing operating costs (including real estate
taxes and utilities) which may not be passed through to tenants. Certain
significant expenditures associated with investments in real estate (such as
mortgage payments, real estate taxes, insurance and maintenance costs) are
generally not reduced when circumstances cause a reduction in rental revenues
from the investment. If a Property is mortgaged to secure the payment of
indebtedness and if the Company or the entity in which the Company invests or
to which it lends is unable to meet its mortgage payments, a loss could be
sustained as a result of foreclosure on the property or the exercise of other
remedies by the mortgagee. In addition, real estate values and income from
properties are also affected by such factors as compliance with laws,
including tax laws, interest rate levels and the availability of financing.
Difficulty of Locating Suitable Investments; Competition; Capital
Requirements
Identifying, completing and realizing on real estate investments has
from time to time been highly competitive, and involves a high degree of
uncertainty. The Company competes for investments with many public and
private real estate investment vehicles, including financial institutions
(such as mortgage banks, pension funds and REITs) and other institutional
investors, as well as individuals. There can be no assurance that the Company
will be able to locate and complete investments which satisfy the Company's
rate of return objective or realize upon their value or that it will be able
to fully invest its available capital.
Many of those with whom the Company competes for investments and its
services are far larger than the Company, may have greater financial
resources than the Company and may have management personnel with more
experience than the officers of the Company.
The success of the Company's business strategy is dependent upon being
able to obtain significant amounts of equity capital and proceeds from
borrowings on terms financially advantageous to the Company. The inability
of the Company to obtain such equity capital and debt proceeds on such terms
may have a material adverse effect on the Company.
Risks of Acquisition, Development, Construction and Renovation Activities
Acquisition. The Company intends to acquire existing properties to the
extent that they can be acquired on advantageous terms and meet the Company's
investment criteria. Acquisitions of properties entail general investment
risks associated with any real estate investment, including the risk that
investments will fail to perform as expected, that estimates of the cost of
improvements to bring an acquired property up to standards established for
the intended market position may prove inaccurate and the occupancy rates and
rents achieved may be less than anticipated.
Development, Construction and Renovation. The Company also intends to
pursue the selective development of land, including the subdivision and sale
of unimproved real estate, and the development, construction and renovation
of commercial and residential properties for its own account or the account
of, or through, entities in which it owns an equity interest as opportunities
arise. Risks associated with the Company's development, construction and
renovation activities include the risks that: the Company may abandon
development opportunities after expending resources to determine feasibility;
construction and renovation costs of a project may exceed original estimates;
occupancy rates and rents at a newly completed property may not be sufficient
to make the property profitable; and development, construction, renovation
and lease-up may not be completed on schedule (including risks beyond the
control of the Company, such as weather or labor conditions or material
shortages) resulting in increased debt service expense and construction
costs. Development, construction and renovation activities are also subject
to risks relating to the inability to obtain, or delays in obtaining, all
necessary zoning, land-use, building, occupancy and other required
governmental permits and authorizations. These risks could result in
substantial unanticipated delays or expenses and, under certain
circumstances, could prevent completion of development, construction and
renovation activities once undertaken, any of which could adversely affect
the financial condition and results of operations of the Company. Properties
under development or acquired for development may generate little or no cash
flow from the date of acquisition through the date of completion of
development and may experience operating deficits after the date of
completion. In addition, new development and renovation activities,
regardless of whether or not they are ultimately successful, typically
require a substantial portion of management's time and attention. Any
properties developed and renovated by the Company are subject to the risks
associated with the ownership and operation of real estate described
elsewhere in this section entitled "Risk Factors."
Risks of Vacancies at Existing Properties; Dependence on Rental Income from
Real Property
Wellsford Commercial currently owns 27 office buildings, 4 of which are
vacant. The occupied buildings are approximately 95% leased, as of June 5,
1998. In the future, the Company and Wellsford Commercial may acquire other
properties that are vacant or not fully leased. The Company and Wellsford
Commercial expect to incur significant costs, including those relating to
leasing commissions, renovations and tenant improvements, in connection with
the leasing of these properties and may be required to offer tenant
concessions, including free rental periods. The failure of the Company or
Wellsford Commercial to lease these properties in a timely manner and on
economically favorable terms may have a material adverse effect on the
Company.
The Company's cash flow, results of operations and value of its assets
would be adversely affected if a significant number of tenants of the
Properties failed to meet their lease obligations or if the Company was
unable to lease a significant amount of space on economically favorable
terms. In the event of a default by a lessee, the Company may experience
delays in enforcing its rights as lessor and may incur substantial costs in
protecting its investment. The bankruptcy or insolvency of a major tenant
may have an adverse effect on a property. At any time, a tenant may also
seek protection under the bankruptcy laws, which could result in rejection
and termination of such tenant's lease and thereby cause a reduction in the
cash flow of the property. If a tenant rejects its lease, the owner's claim
for breach of the lease would (absent collateral securing the claim) be
treated as a general unsecured claim. Generally, the amount of the claim
would be capped at the amount owed for unpaid pre-petition lease payments
unrelated to the rejection, plus the greater of one year's lease payments or
15% of the remaining lease payments payable under the lease (but not to
exceed the amount of three years' lease payments). No assurance can be given
that the Properties will not experience significant tenant defaults in the
future.
Operating Risks
The Properties are subject to operating risks common to the particular
property type, any and all of which may adversely affect occupancy or rental
rates. Such Properties are subject to increases in operating expenses such
as cleaning; electricity; heating, ventilation and air-conditioning; elevator
repair and maintenance; insurance and administrative costs; and other general
costs associated with security, landscaping, repairs and maintenance. While
commercial tenants are often obligated to pay a portion of these escalating
costs, there can be no assurance that they will agree to pay such costs or
that the portion that they agree to pay will fully cover such costs. If
operating expenses increase, the local rental market may limit the extent to
which rents may be increased to meet increased expenses without decreasing
occupancy rates. To the extent rents cannot be increased or costs
controlled, the cash flow of the Company and its financial condition may be
adversely affected.
Adverse Consequences of Debt Financing
Leverage. Some of the Company's real estate equity investments may
utilize a leveraged capital structure, in which case a third party lender
would be entitled to cash flow generated by such investments prior to the
Company receiving a return. As a result of such leverage, the Company would
be subject to the risks normally associated with debt financing, including
the risk that cash flow from operations and investments will be insufficient
to meet required payments of principal and interest, the risk that existing
debt (which in most cases will not have been fully amortized at maturity)
will not be able to be refinanced or that the terms of such refinancings will
not be as favorable to the Company and the risk that necessary capital
expenditures for such purposes as renovations and other improvements will not
be able to be financed on favorable terms or at all. While such leverage may
increase returns or the funds available for investment by the Company, it
also will increase the risk of loss on a leveraged investment. If the Company
defaults on secured indebtedness, the lender may foreclose and the Company
could lose its entire investment in the security for such loan. Because the
Company may engage in portfolio financings where several investments are
cross-collateralized, multiple investments may be subject to the risk of
loss. As a result, the Company could lose its interests in performing
investments in the event such investments are cross-collateralized with
poorly performing or nonperforming investments. In addition, recourse debt,
which the Company reserves the right to obtain, may subject other assets of
the Company to risk of loss.
Existing Debt Maturities; Foreclosures. The Company anticipates that
only a portion of the principal of the Company's indebtedness outstanding
from time to time will be repaid prior to maturity. However, the Company may
not have sufficient funds to repay such indebtedness at maturity; it may
therefore be necessary for the Company to refinance debt through additional
debt financing or equity offerings. If the Company is unable to refinance
this indebtedness on acceptable terms, the Company may be forced to dispose
of properties or other assets upon disadvantageous terms, which could result
in losses to the Company and adversely affect the amount of cash available
for further investment.
Risk of Rising Interest Rates. The Company may incur indebtedness in
the future that also bears interest at a variable rate or may be required to
refinance its debt at higher rates. Outstanding advances under the Line of
Credit and Loan Facility bear interest at a variable rate. Accordingly,
increases in interest rates could increase the Company's interest expense and
adversely affect the financial condition and results of operations of the
Company.
Covenants. Various credit facilities or other debt obligations may
require the Company to comply with a number of financial and other covenants
on an ongoing basis. Failure to comply with such covenants may limit the
Company's ability to borrow funds or may cause a default under its then-
existing indebtedness.
No Limitation on Debt. The Articles of Amendment and Restatement (the
"Charter") and Bylaws of the Company do not contain any limitation on the
amount of indebtedness the Company may incur. The Company also has the
ability to use a more highly leveraged business strategy than typically used
by REITs. Accordingly, the Company could become highly leveraged, resulting
in an increase in debt service that could increase the risk of default on the
Company's indebtedness.
Risks of Investments in Debt Instruments
The Company intends to originate and participate in debt investments and
may acquire performing or nonperforming debt investments. In general, debt
instruments carry the risk that borrowers may not be able to make debt
service payments or pay principal when due, the risk that the value of any
collateral may be less than the amounts owed, the risk that interest rates
payable on the debt instruments may be lower than the Company's cost of
funds, and the risk that the collateral may be mismanaged or otherwise
decline in value during periods in which the Company is seeking to obtain
control of the underlying real estate. The Company is also dependent on the
ability of the borrowers to operate their properties successfully. Such
borrowers and their properties will be subject to the other risks affecting
the ownership and operation of real estate set forth in this section entitled
"Risk Factors." Some of the loans may be structured so that all or a
substantial portion of the principal will not be paid until maturity, which
increases the risk of default at that time.
It is anticipated that a substantial portion of the debt in which the
Company invests will not be rated by any nationally-recognized rating agency.
Generally, the value of unrated classes is subject to more fluctuation due to
economic conditions than rated classes. The Company's acquisition of credit
supported classes of securitizations which are unrated at the time of
acquisition and which have lower ratings may increase the risk of nonpayment
or of a significant delay in payments on these classes. Should rated assets
be downgraded, it may adversely affect their value and may adversely affect
the financial condition and results of operations of the Company.
Risks of Investments in Mortgage and Other Loans
To the extent the Company invests in mortgage and other loans, such
loans may or may not be recourse obligations of the borrower and generally
will not be insured or guaranteed by governmental agencies or otherwise. In
the event of a default under such obligations, the Company may have to
foreclose on its mortgage or other collateral or protect its investment by
acquiring title to the collateral and, in the case of mortgage loans,
thereafter making substantial improvements or repairs in order to maximize
the collateral's investment potential. Borrowers may contest enforcement of
foreclosure or other remedies, seek bankruptcy protection against such
enforcement and/or bring claims for lender liability in response to actions
to enforce mortgage and other obligations. Relatively high "loan-to-value"
ratios and declines in the value of the collateral may prevent the Company
from realizing an amount equal to its loan upon foreclosure.
The Company may participate in loans originated by other financing
institutions. As a participant, the Company may not have the sole authority
to declare a default under the loan or to control the collateral or any
foreclosure.
Any investments in junior secured obligations which are subordinate to
liens of senior secured obligations would involve additional risks, including
the lack of control over the collateral and any related foreclosure
proceeding. In the event of a default on a senior secured obligation, the
Company may make payments to prevent foreclosure on the lien of the senior
lender without necessarily improving the Company's position with respect to
the subject collateral. In such event, the Company would be entitled to
share in the proceeds only after satisfaction of the amounts due to the
holder of the senior secured obligation.
Lack of Control and Other Risks of Equity Investments in and with Third
Parties
The Company may invest in real estate investment trusts ("REITs") or
other entities that invest in real estate assets, including debt instruments
and equity interests. In such cases, the Company will be relying on the
assets, investments and management of the REIT or other entity in which it is
investing. Such entities and their properties will be subject to the other
risks affecting the ownership and operation of real estate and investment in
debt set forth in this section entitled "Risk Factors."
The Company may also co-invest with third parties through partnerships,
joint ventures or other entities, acquiring non-controlling interests in or
sharing responsibility for managing the affairs of a property, partnership,
joint venture or other entity and, therefore, will not be in a position to
exercise sole decision-making authority regarding the property, partnership,
joint venture or other entity. In this regard, it should be noted that the
Company has formed Wellsford Commercial together with Whitehall. Although
the Company is responsible for managing the day-to-day business of Wellsford
Commercial, certain decisions require the approval of Whitehall.
Investments in partnerships, joint ventures, or other entities may,
under certain circumstances, involve risks not present were a third party not
involved, including the possibility that the Company's partners or co-
venturers might become bankrupt or otherwise fail to fund their share of
required capital contributions, that such partners or co-venturers might at
any time have economic or other business interests or goals which are
inconsistent with the business interests or goals of the Company, and that
such partners or co-venturers may be in a position to take action contrary to
the instructions or the requests of the Company and contrary to the Company's
policies or objectives. Such investments may also have the potential risk of
impasse on decisions, such as a sale, because neither the Company nor the
partner or co-venturer would have full control over the partnership or joint
venture. Consequently, actions by such partner or co-venturer might result
in subjecting properties owned by the partnership or joint venture to
additional risk. In addition, the Company may in certain circumstances be
liable for the actions of its third-party partners or co-venturers.
Risk of Loss on Investments in Commercial Mortgage-Backed Securities
As noted above, the Company may seek to invest in real estate-related
debt instruments, which may include commercial mortgage-backed securities
("CMBS"). Many of the risks of investing in CMBS reflect the risks of
investing directly in the real estate securing the underlying mortgage loans.
This may be especially true in the case of commercial mortgage securities
secured by, or evidencing an interest in, a single commercial mortgage loan
or a relatively small or less diverse pool of commercial mortgage loans. See
"-Risks of Investments in Mortgage and Other Loans."
The risks of investing in commercial mortgage securities include risks
that the existing credit support will prove to be inadequate, either because
of unanticipated levels of losses or, if such credit support is provided by a
third party, because of difficulties experienced by such provider. Delays or
difficulties encountered in servicing commercial mortgage securities may
cause greater losses and, therefore, greater resort to credit support than
was originally anticipated, and may cause a rating agency to downgrade a
security.
The Company may acquire subordinated tranches of CMBS issuances. In
general, subordinated tranches of CMBS are entitled to receive repayment of
principal only after all principal payments have been made on more senior
tranches and also have subordinated rights as to receipt of interest
distributions. In addition, an active secondary market for such subordinated
securities is not as well developed as the market for certain other mortgage-
backed securities. Accordingly, such subordinated CMBS may have limited
marketability and there can be no assurance that a more efficient secondary
market will develop.
Nature of Investments Made by the Company May Involve High Risk;
Illiquidity of Real Estate Investments
The Company may make investments in real estate-related assets and
businesses which have experienced severe financial difficulties, which
difficulties may never be overcome. Since the Company may only make a
limited number of investments and since many of the investments may involve a
high degree of risk, poor performance by one of the investments could
severely affect the financial condition and results of operations of the
Company.
Equity and debt investments in real estate may be relatively illiquid.
Such illiquidity limits the ability of the Company to modify its portfolio in
response to changes in economic or other conditions. Illiquidity may result
from the absence of an established market for the investments as well as
legal or contractual restrictions on their resale by the Company. Pursuant
to the terms of the operating agreement of Wellsford Commercial, the Company
may not transfer its interest in Wellsford Commercial, the properties owned
by Wellsford Commercial may not be sold or financed, nor may Wellsford
Commercial issue equity or debt securities, in each case without the approval
of Whitehall.
Limitations on Remedies
Although the Company will have certain contractual remedies upon the
default by borrowers under certain debt instruments, such as foreclosing on
the underlying real estate or other collateral or collecting rents generated
therefrom, certain legal requirements (including the risks of lender
liability) may limit the ability of the Company to effectively exercise such
remedies.
The right of a mortgage lender to convert its loan position into an
equity interest may be limited or prevented by certain common law or
statutory prohibitions or delayed by legal proceedings.
Third-Party Bankruptcy Risks
Investments made in assets operating in workout modes or under Chapter
11 of the Bankruptcy Code could be subordinated or disallowed, and the
Company could be liable to third parties in such circumstances. Furthermore,
distributions made to the Company in respect of such investments could be
recovered if any such distribution is found to be a fraudulent conveyance or
preferential payment. Bankruptcy laws, including the automatic stay imposed
upon the filing of a bankruptcy petition, may delay the ability of the
Company to realize on collateral for loan positions held by it or may
adversely affect the priority of such loans through doctrines such as
equitable subordination or may result in a restructure of the debt through
principles such as the "cramdown" provisions of the bankruptcy laws.
Recently Formed Entities
It should be noted that the Company consists of recently formed entities
with little prior operating history and that their respective properties and
assets have only been recently acquired.
Risk of Registration Under Investment Company Act
The Company is not registered as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
since management believes that the Company and its subsidiaries either are
not within the definitions of "investment company" thereunder or,
alternatively, are excluded from regulation under the Investment Company Act
by one or more exemptions. In the future, the Company and its subsidiaries
will seek to continue to conduct their operations in a manner intended not to
require registration under the Investment Company Act. Therefore, the assets
that the Company and its subsidiaries may acquire or sell may be limited by
the provisions of the Investment Company Act. If the Company and/or any of
its subsidiaries were to become an "investment company" under the Investment
Company Act and if it failed to qualify for an exemption thereunder, it would
be unable to conduct its business as presently conducted which could have a
material adverse effect on the Company and its subsidiaries and the market
price for the Common Stock.
Risks of Uninsured Loss
The Company carries comprehensive liability, fire, extended coverage and
rental loss insurance with respect to all of the properties that it owns,
with policy specifications, insured limits and deductibles customarily
carried for similar properties. There are, however, certain types of losses
(such as losses arising from acts of war or relating to pollution) that are
not generally insured because they are either uninsurable or not economically
insurable. Should an uninsured loss or a loss in excess of insured limits
occur, the Company could lose its capital invested in a property, as well as
the anticipated future revenue from such property and would continue to be
obligated on any mortgage indebtedness or other obligations related to the
property. Any such loss would adversely affect the financial condition and
results of operations of the Company.
With respect to those properties in which the Company holds an interest
through a mortgage, as well as those properties owned by entities to whom the
Company makes unsecured loans, the borrowers will most likely be obligated to
maintain insurance on such properties and to arrange for the Company to be
covered as a named insured on such policies. The face amount and scope of
such insurance coverage may be less comprehensive than the Company would
carry if it held the fee interest in such property. Accordingly in such
circumstances, or in the event that the borrowers fail to maintain required
coverage, uninsured or underinsured losses may occur, which could have an
adverse impact on the Company's cash flow or financial condition.
Potential Environmental Liability Related to the Properties
Under various Federal, state and local laws, ordinances and regulations,
an owner or operator of real estate may be held liable for the costs of
removal or remediation of certain hazardous or toxic substances on or in such
property. These laws often impose such liability without regard to whether
the owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances. The cost of any required remediation and the
owner's liability therefor as to any property is generally not limited under
such enactments and could exceed the value of the property and/or the
aggregate assets of the owner. The presence of such substances, or the
failure to properly remediate such substances, may adversely affect the
owner's ability to sell or rent such property or to borrow using such
property as collateral. Persons who arrange for the disposal or treatment of
hazardous or toxic substances may also be liable for the costs of removal or
remediation of such substances at a disposal or treatment facility, whether
or not that facility is owned or operated by such person. Certain
environmental laws govern the removal, encapsulation or disturbance of
asbestos-containing materials ("ACM"), for example, when such materials are
in poor condition, or in the event of renovation or demolition, and impose
liability for release of ACM into the air. Third parties may seek recovery
from owners or operators of real properties, or from employers, for personal
injury associated with exposure to ACM. The operation and subsequent removal
of certain aboveground and underground storage tanks are also regulated by
federal and state laws. Leaking tanks are a common source of water or soil
contamination for which an owner or operator could be held liable. In
connection with the ownership (direct or indirect), operation, management and
development of real properties, the Company may be considered an owner or
operator of such properties or as having arranged for the disposal or
treatment of hazardous or toxic substances, and, therefore, may be
potentially liable for removal or remediation costs, and other related costs,
including governmental fines and payments for injury to persons or property.
Certain of the Company's properties contain ACM. At 15 Broad Street,
located in Boston Massachusetts, the Company intends to abate the ACM located
in tenant spaces as leases expire and tenant improvements are made in
connection with lease renewals and new tenancies. It is estimated that this
abatement work will cost approximately $625,000. Similarly, the buildings
located at 117 and 140 Kendrick Street in Needham, Massachusetts, require
asbestos removal and remediation of oil contamination. Pursuant to a post-
closing agreement between the Polaroid Corporation, the former owner of the
two properties, and Wellsford Commercial, dated May 14, 1998, Polaroid has
agreed to remove the ACM at both properties and take the measures necessary
to remediate the oil contamination at 117 Kendrick Street as may be required
by the Massachusetts Contingency Plan. The costs associated with these
obligations are currently estimated to be $750,000 and an amount equal
thereto has been placed in escrow by Polaroid to cover its obligations.
However, if Polaroid breaches its obligations, Wellsford Commercial will be
required to pay any amount in excess of $750,000. The Company will undertake
the remediation of the oil contamination at 140 Kendrick Street, the cost of
which is not expected to exceed $100,000.
One Property acquired by the Company in the Value Merger, located at 19-
23 Keewaydin Drive in Salem, New Hampshire, is contaminated with volatile
organic compounds ("VOCs"). Monitoring of groundwater for VOCs is being
performed pursuant to a groundwater management permit issued by the New
Hampshire Department of Environmental Services to VLP, as predecessor to
Wellsford Capital. In connection with the sale of the Newark Shopping Mall
in Newark, California, by VLP on July 15, 1997, perchloroethylene soil and
groundwater contamination from tenant dry cleaning operations was identified.
The new owner of the Newark Shopping Mall has agreed to release and indemnify
VLP, as predecessor to Wellsford Capital, from any liability arising in
connection with environmental matters at this site. This property has also
been insured to protect against environmental liability, which insurance
specifically covers the perchloroethylene contamination. It should also be
noted that in connection with such sale, VLP retained a security interest in
such property. In the event Wellsford Capital, as successor to VLP,
forecloses on such property and takes actions falling outside of the
Comprehensive Environmental Response Compensation and Liability Act of 1980
("CERCLA") lender liability safe-harbor provisions, the Company and
Wellsford Capital could be liable for environmental liabilities arising at
such property.
The Company has also become a lender in connection with other
properties. In the event that in its capacity as lender the Company
forecloses on such properties and takes actions falling outside of CERCLA's
lender liability safe-harbor provisions, the Company could be liable for
environmental liabilities arising at such properties.
The Properties have had Phase I or similar environmental audits and
subsequent soil sampling, drinking or ground water analysis, radon testing or
asbestos surveys, as warranted. These analyses were performed by independent
environmental consultant companies and, except as previously set forth, have
not revealed the presence of any environmental condition or liability that
would have a material adverse effect on the Company's business.
Dependence on Key Personnel
The Company is dependent primarily on the efforts of Jeffrey H. Lynford,
Chairman of the Board, and Edward Lowenthal, President and Chief Executive
Officer, and the loss of either of their services could have an adverse
effect on the operations of the Company. Mr. Lynford and Mr. Lowenthal have
each entered into employment agreements with the Company having a term ending
December 31, 2002. The Company also depends upon the services of other
individuals with expertise and experience in certain activities conducted by
the Company, and the loss of the services of any of these individuals could
also have an adverse effect on the operations of the Company.
Changes in Policies Without Shareholder Approval
The investment, financing, borrowing and distribution policies of the
Company and its policies with respect to all other activities, growth, debt,
capitalization and operations, will be determined by the Company's Board of
Directors. Although it has no present intention to do so, the Board of
Directors may amend or revise these policies at any time and from time to
time at its discretion without a vote of the shareholders of the Company. A
change in these policies could adversely affect the Company's financial
condition, results of operations and the market price of the Common Stock.
Absence of Public Market; Risk of Changes in Stock Price
As of June 5, 1998, there were 20,009,882 shares of Common Stock issued
and outstanding. Although a trading market for the Common Stock exists,
there can be no assurance that an active trading market for the Common Stock
will be sustained in the future. In the absence of an active public trading
market, an investor may be unable to liquidate his investment in the Company.
The prices at which the Common Stock trades will be determined by the
marketplace and may be influenced by many factors, including, among others,
the depth and liquidity of the market for the Common Stock, investor
perception of the Company and its businesses, the Company's dividend policy,
interest rates and general economic and market conditions. Prices at which
the Common Stock may trade in the future cannot be predicted.
Costs of Compliance with the Americans with Disabilities Act and Similar Laws
Under the Americans with Disabilities Act of 1980 (the "ADA"), places of
public accommodations and commercial facilities are required to meet certain
federal requirements related to access and use by disabled persons.
Compliance with ADA requirements could require both structural and non-
structural changes to the properties in which the Company invests and
noncompliance could result in imposition of fines by the United States
government or an award of damages to private litigants. Although management
of the Company believes that its properties are substantially in compliance
with present requirements of the ADA, the Company may incur additional costs
of compliance in the future. A number of additional Federal, state and local
laws exist which impose further burdens or restrictions on owners with
respect to access by disabled persons and may require modifications to
properties in which the Company invests, or restrict certain further
renovations thereof, with respect to access by disabled persons. Final
regulations under the ADA have not yet been promulgated and the ultimate
amount of the cost of compliance with the ADA or other such laws is not
currently ascertainable. While such costs are not expected to have a
material effect on the Company, they could be substantial. If required
changes involve greater expense than the Company currently anticipates, the
Company's financial condition and results of operations could be adversely
affected.
Noncompliance with Other Laws
Real estate properties are also subject to various Federal, state and
local regulatory requirements, such as state and local fire and life safety
requirements. Failure to comply with these requirements could result in the
imposition of fines by governmental authorities or awards of damages to
private litigants. The Company believes that its properties are currently in
material compliance with all such regulatory requirements. However, there
can be no assurance that these requirements will not be changed or that new
requirements will not be imposed which would require significant
unanticipated expenditures by the Company and could have an adverse effect on
the Company's results of operations.
Effect on Common Stock Price of Shares Available for Future Sale
Sales of a substantial number of shares of the Common Stock, or the
perception that such sales could occur, could adversely affect prevailing
market prices of the Common Stock. In this regard, the 12,242,719 Shares
offered hereby may be sold in the public markets from time to time. In
addition, 1,744,469 shares of Common Stock were issued in connection with the
Value Merger to certain of the shareholders of VLP which are being registered
for resale from time to time by the holders thereof. Also, (i) 3,076,235
shares of Common Stock have been reserved for issuance pursuant to the
Company's 1997 Management Incentive Plan and Rollover Stock Option Plan
(options to purchase 3,012,610 of such shares have been granted), (ii)
2,000,000 shares of Common Stock have been reserved for issuance pursuant to
the Company's 1998 Management Incentive Plan (options to purchase 400,000 of
such shares have been granted); (iii) approximately 5,000,000 shares of
Common Stock have been reserved for issuance upon conversion of the Company's
Series A 8% Convertible Redeemable Preferred Stock ("Series A Preferred") and
Class A Common Stock, $.01 par value per share ("Class A Common") and (iv)
4,349,715 shares of Common Stock have been reserved for issuance upon
exercise by Whitehall of warrants granted in connection with the formation of
Wellsford Commercial. In addition, approximately 1,818,180 shares of Common
Stock will be available for issuance to Whitehall upon its exchange of
certain membership units in Wellsford Commercial for shares of Common Stock,
assuming a price per share of Common Stock of $13.75 (the last reported sale
price of a share of Common Stock on the ASE on June 4, 1998). When issued,
these reserved or otherwise available shares and shares subject to options
will be available for sale in the public markets from time to time pursuant
to exemptions from registration requirements or upon registration. No
prediction can be made about the effect that future sales of the Common Stock
will have on the market prices of the Common Stock.
Adverse Consequences of Failure of WCPT to Qualify as a REIT
The Company, through its subsidiary, WCPT, has formed Wellsford
Commercial. The Company intends to operate WCPT so that WCPT qualifies as a
REIT under the Code, commencing with the calendar year ended December 31,
1997. Although management of the Company believes that WCPT was organized
and is operating in such a manner, no assurance can be given that WCPT will
be treated as so organized or will be able to operate in a manner so as to
qualify or remain so qualified. Qualification as a REIT involves the
application of highly technical and complex Code provisions for which there
are only limited judicial or administrative interpretations and the
determination of various factual matters and circumstances not entirely
within the Company's control. For example, in order to qualify as a REIT, at
least 95% of WCPT's gross income in any year must be derived from certain
specified sources and WCPT must make distributions to its shareholders
aggregating annually at least 95% of its REIT taxable income (excluding net
capital gains). In addition, no assurance can be given that legislation, new
regulations, administrative interpretations or court decisions will not
change the tax laws with respect to qualification as a REIT or the Federal
income tax consequences of such qualification. The Company, however, is not
aware of any pending tax legislation that would adversely affect WCPT's
ability to operate as a REIT.
If WCPT fails to qualify as a REIT, WCPT will be subject to Federal
income tax (including any applicable alternative minimum tax) on its taxable
income at corporate rates. In addition, unless entitled to relief under
certain statutory provisions, WCPT will also be prohibited from becoming a
REIT for the four taxable years following the year during which qualification
is lost. Failure to be treated as a REIT would reduce the net earnings of
WCPT available for investment or distribution to the Company because of the
additional tax liability to WCPT for the year or years involved. To the
extent that distributions to the Company would have been made in anticipation
of WCPT's qualifying as a REIT, WCPT might be required to borrow funds or to
liquidate certain of its investments to pay the applicable taxes.
Hedging Policies/Risks
In connection with the financing of certain real estate investments, the
Company may employ hedging techniques designed to protect the Company against
adverse movements in currency and/or interest rates. While such transactions
may reduce certain risks, such transactions themselves may entail certain
other risks. Thus, while the Company may benefit from the use of these
hedging mechanisms, unanticipated changes in interest rates, securities
prices, or currency exchange rates may result in a poorer overall performance
for the Company than if it had not entered into such hedging transactions.
Anti-Takeover Effect Resulting From a Staggered Board, Ability of the Company
to Issue Preferred Stock and Certain Provisions of Maryland Law
The Company's Board of Directors is divided into three classes. The
terms of the second, third and first classes will expire in 1999, 2000 and
2001, respectively. Directors for each class will be chosen for a three-year
term upon the expiration of their then current term, and each year one class
of directors will be elected by the shareholders. The staggered terms for
directors may limit the shareholders' ability to change control of the
Company even if a change of control were in the interests of shareholders.
The Company's Charter authorizes the Board of Directors to establish one
or more series of preferred shares and to determine, with respect to any
series of preferred shares, the preferences and other terms of such series.
Although the Board of Directors has no intention at the present time, it
could issue a series of preferred shares that could, depending on the terms
of such series, impede or prevent a merger, tender offer or other transaction
that some, or a majority, of the Company's shareholders might believe to be
in their best interest or in which shareholders might receive a premium for
their shares over the then current market price of such shares.
Under the Maryland General Corporation Law ("MGCL"), certain "business
combinations" (including certain issuances of equity securities) between a
Maryland corporation and any person who beneficially owns ten percent or more
of the voting power of the corporation's shares (an "Interested Stockholder")
or an affiliate thereof are prohibited for five years after the most recent
date on which the Interested Stockholder becomes an Interested Stockholder.
Thereafter, unless exempted in accordance with the MGCL, any such business
combination must be approved by two supermajority stockholder votes. The
directors of the Company have exempted from the Maryland statute any business
combinations with Jeffrey H. Lynford or Edward Lowenthal or any of their
affiliates or any other person acting in concert or as a group with any of
such persons and, consequently, the five-year prohibition and the
supermajority vote requirements will not apply to business combinations
between such persons and the Company. The directors of the Company have also
exempted from the Maryland statute any business combinations with Mutual
Qualified Fund ("Mutual"), or any affiliate of Mutual, provided that any such
business combination is approved prior to its consummation by the directors
of the Company, including a majority of the directors of the Company who are
not employees or otherwise affiliated with Mutual or any of its affiliates.
The provisions of the MGCL described above and the exemptions granted
may discourage a third party from making an acquisition proposal for the
Company and may have the effect of delaying, deferring or preventing a
transaction with or a change in control of the Company that might involve a
premium price for the Common Stock or otherwise be in the best interest of
the stockholders.
Until May 30, 2007, pursuant to the Common Stock and Preferred Stock
Purchase Agreement between ERP Operating Partnership and the Company, the
Company has the right to direct the voting of all shares of the Series A
Preferred, the Class A Common and the Common Stock owned by ERP Operating
Partnership or any of its affiliates, except as to the election of the
director to be designated by ERP Operating Partnership or any matter relating
to the rights, preferences and privileges of the Series A Preferred or the
Class A Common. Such voting right may hinder a change in control.
USE OF PROCEEDS
The Shares offered hereby are being registered for the account of
Selling Shareholders and, accordingly, the Company will not receive any of
the proceeds from the sale of the Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Shares by the Selling Shareholders as of June 5,
1998, and the number of Shares being offered by this Prospectus. Each
Selling Shareholder will receive all of the net proceeds from the sale of its
respective Shares offered hereby.
Any or all of the Shares being registered hereby may be offered for sale
pursuant to this Prospectus by the Selling Shareholders from time to time.
Accordingly, no estimate can be given as to the amount of the Shares that
will be held by the Selling Shareholders upon consummation of any such sales.
The table has been prepared based on information furnished to the Company by
or on behalf of the Selling Shareholders.
Beneficial Ownership of Number of
Common Stock Shares of
Prior to the Offering Common
--------------------------- Stock
Number of Percentage Being
Name of Selling Shareholder Shares of Class(2) Registered
Longleaf Partners Realty Fund. . . . 3,398,000 17.0% 3,398,000
Mutual Qualified Fund(3) . . . . . . 2,277,184 11.4% 2,277,184
Yale University(3) . . . . . . . . . 964,932 4.8% 964,932
BancBoston Investments Inc.. . . . . 811,000 4.1% 811,000
SVP-RPC Joint Venture. . . . . . . . 811,000 4.1% 811,000
Morgan Stanley Institutional
Fund, Inc. - U.S. Real Estate
Portfolio . . . . . . . . . . . . . 654,898 3.3% 654,898
Van Kampen American Capital
LIT Real Estate Securities
Portfolio . . . . . . . . . . . . . 447,242 2.2% 447,242
Morgan Stanley SICAV - U.S.
Real Estate Securities Fund . . . . 314,115 1.6% 314,115
Morgan Stanley Real Estate
Special Situations
Fund II, LP . . . . . . . . . . . . 249,167 1.2% 210,146
Van Kampen American Capital
Real Estate Securities Fund . . . . 199,020 (1) 199,020
MOAB Investments, L.P. . . . . . . . . . . . . . . . . . . .173,600(1)173,600
Morgan Stanley Real Estate
Special Situations
Fund I, LP. . . . . . . . . . . . . 186,877 (1) 157,609
Stichting Pensioenfonds ABP. . . . . 184,997 (1) 156,032
Gary C. Comer. . . . . . . . . . . . 151,300 (1) 151,300
Stichting Bedrijfspensioenfonds
voor de Metaalnijverheid. . . . . . 123,336 (1) 104,023
J. Roderick MacArthur Foundation . . 97,000 (1) 97,000
Intermatic, Inc. Pension Trust . . . 97,000 (1) 97,000
AG Long-Term Super Fund, L.P.(4) . . 75,000 (1) 75,000
The Eugenia II Investment Holdings
LTD. - REIT . . . . . . . . . . . . 63,630 (1) 63,630
Jesselson Foundation . . . . . . . . 60,000 (1) 60,000
Comer Foundation . . . . . . . . . . 48,500 (1) 48,500
Morgan Stanley Fund, Inc. - U.S.
Real Estate Portfolio . . . . . . . 45,351 (1) 45,351
Steven A. Karpf. . . . . . . . . . . 38,840 (1) 38,840
Richard R. Previdi(5). . . . . . . . 38,840 (1) 38,840
Frederick P. Zarrilli. . . . . . . . 38,840 (1) 38,840
Lloyd G. Schermer as Trustee of the
Lloyd G. Schermer Declaration of
Trust Dated 11/17/89. . . . . . . . 38,800 (1) 8,800
Trust F/B/O A. Daniel Jesselson
U/W Ludwig Jesselson . . . . . . . . 37,000 (1) 37,000
Edward Lowenthal(6). . . . . . . . . 113,527 (1) 35,913
Jeffrey H. Lynford(7). . . . . . . . 103,045 (1) 35,913
Morgan Stanley Real Estate
Special Situations Inc. . . . . . . 43,477 (1) 34,926
AG Super Fund International
Partners, L.P.(4) . . . . . . . . . 36,857 (1) 32,000
Margery Germain(8) . . . . . . . . . 30,101 (1) 30,101
Alice Albright Arlen, Trustee
U/T/D 7/2/63 F/B/O Alice
Albright Arlen. . . . . . . . . . . 29,100 (1) 29,100
R.H. Newman Trustee or Successor
Trustee under the R.H. Newman
Living Trust U/A/D 4/18/89. . . . . 29,100 (1) 29,100
William M. Cockrum, Trustee of
the William M. Cockrum Trust
dated 8/1/79(9) . . . . . . . . . . 24,272 (1) 24,272
Susan Burkhardt Living Trust
Dated 8/18/69 . . . . . . . . . . . 19,400 (1) 19,400
Carol B. Cohen Trustee DTD 10/12/78. 19,400 (1) 19,400
Earl E. Segerdahl. . . . . . . . . . 19,400 (1) 19,400
MRMB Charitable Remainder Trust II
U/T/D 8/8/95. . . . . . . . . . . . 19,400 (1) 19,400
Alice Albright Arlen . . . . . . . . 19,400 (1) 19,400
Octagon Capital Association. . . . . 19,400 (1) 19,400
David B. Heller P/T Rollover IRA . . 19,400 (1) 19,400
James Amend. . . . . . . . . . . . . 19,400 (1) 19,400
Betty A. Schermer as Trustee of the
Betty A. Schermer Declaration
of Trust Dated 11/17/89 . . . . . . 19,400 (1) 19,400
Principal Asset Allocation Fund
- Real Estate Account . . . . . . . 15,777 (1) 15,777
Bergman Charitable Trust/Betsy
Lynn Rosenfield . . . . . . . . . . 14,500 (1) 14,500
Bergman Charitable Trust/
Robert Bergman. . . . . . . . . . . 14,500 (1) 14,500
Richard C. Anderson. . . . . . . . . 14,500 (1) 14,500
Bergman Charitable Trust/
Carol Cohen . . . . . . . . . . . . 14,500 (1) 14,500
NTBG Gov Sec Endow I . . . . . . . . 14,500 (1) 14,500
Morgan Stanley Real Estate
Special Situations Investors, LP. . 16,690 (1) 13,408
Steven J. Stogel . . . . . . . . . . 12,000 (1) 12,000
Morgan Stanley Universal Funds, Inc.
- U.S. Real Estate Portfolio. . . . 27,607 (1) 11,007
AG MM, L.P.(4) . . . . . . . . . . . 10,000 (1) 10,000
Northern Trust Company, as Master
Trustee of the Teachers Retirement
System of the State of Illinois(4). 11,431 (1) 10,000
Lloyd Schermer, IRA. . . . . . . . . 9,700 (1) 9,700
Stephen C. Neal. . . . . . . . . . . 9,700 (1) 9,700
Alicia M. Hoge Trust, D/T/D 12/30/83 9,700 (1) 9,700
NTBG Gov Sec Endow II. . . . . . . . 9,700 (1) 9,700
The R.H.N. Corporation . . . . . . . 9,700 (1) 9,700
NTBG Gov Sec Endow III
GVSEC 5-10 Yr.. . . . . . . . . . . 9,700 (1) 9,700
Barbara S. Bluhm . . . . . . . . . . 9,700 (1) 9,700
Douglas E. Cohen . . . . . . . . . . 9,700 (1) 9,700
Tanya Wexler . . . . . . . . . . . . 9,700 (1) 9,700
The Kampong Fund . . . . . . . . . . 9,700 (1) 9,700
Joseph P. Weil . . . . . . . . . . . 9,700 (1) 9,700
William C. Mitchell, IRA . . . . . . 9,700 (1) 9,700
J. Wexler Revocable Trust
F/B/O Susan Wexler. . . . . . . . . 9,700 (1) 9,700
Scott D. Cohen . . . . . . . . . . . 9,700 (1) 9,700
PHS Bay Colony Fund, L.P.(4) . . . . 8,500 (1) 8,500
Nutmeg Partners, L.P.(4) . . . . . . 23,675 (1) 8,000
PHS Patriot Fund, L.P.(4). . . . . . 6,500 (1) 6,500
Carl C. Lang and Gail R. Lang. . . . 4,400 (1) 4,400
All Selling Shareholders as a group 12,554,428 62.7% 12,242,719
========== ==========
(1) Less than one percent (1%).
(2) Percentages are based on 20,009,882 shares of Common Stock outstanding
as of June 5, 1998.
(3) An advisory client of Franklin Mutual Advisers, Inc.("Franklin").
Franklin, which had the right to vote as of the date of the Value Merger
approximately 50.05% of the issued and outstanding shares of VLP,
entered into a voting agreement with the Company pursuant to which
Franklin has agreed that other than shares of Common Stock of the
Company received upon consummation of the Value Merger, it will not,
without the Company's consent, (i) acquire for itself or any of its
affiliates or advisory clients, any additional shares of Common Stock
which would result in Franklin having the power to vote more than 25% of
the voting securities of the Company, (ii) solicit proxies from
shareholders of the Company, become a "participant" in any "election
contest" (as such terms are used in Rule 14a-11 of the Exchange Act)
with respect to the Company or (iii) form, join or participate in a
"group" (within the meaning of Section 13(d)(3) of the Exchange Act)
with respect to any matters related to the foregoing. Franklin
transferred voting power to Angelo, Gordon & Co., L.P. with respect to
836,500 shares of the Company's Common Stock by an irrevocable proxy
dated August 29, 1997. Another 614,747 of Franklin's shares of the
Company's Common Stock are subject to a voting trust dated August 29,
1997, the trustee of which is a third party.
(4) Angelo, Gordon & Co., L.P. has the power to vote and/or dispose of these
shares by virtue of investment management or other agreements and may be
deemed to be the beneficial owner of such shares.
(5) Mr. Previdi is the Chief Operating Officer of WCPT.
(6) Mr. Lowenthal is the President, the Chief Executive Officer and a
director of the Company and was the President, the Chief Executive
Officer and a trustee of Wellsford Residential.
(7) Mr. Lynford is the Chairman of the Board, the Secretary and a director
of the Company and was the Chairman of the Board, the Secretary and a
trustee of Wellsford Residential.
(8) Ms. Germain is the wife of Mark Germain, a director of the Company and a
former trustee of Wellsford Residential.
(9) Mr. Cockrum is an advisor to the Company and was an advisor to Wellsford
Residential.
The Shares are being registered for resale solely for the account of the
Selling Shareholders. None of the Selling Shareholders and none of their
respective officers, directors, or stockholders has had any material
relationship with the Company within the past three years except as set forth
above.
PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale by the Selling
Shareholders of the Shares offered hereby. The Shares may be sold from time
to time to purchasers directly by any of the Selling Shareholders.
Alternatively, any of the Selling Shareholders may from time to time offer
the Shares through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom they may act as agent. The Selling Shareholders and any such
underwriters, dealers or agents who participate in the distribution of the
Shares may be deemed to be underwriters, and any profits on the sale of the
Shares by them and any discounts, commissions or concessions received by any
such underwriters, dealers or agents might be deemed to be underwriting
discounts and commissions under the Securities Act.
The Shares may be sold from time to time in one or more transactions at
a fixed offering price, which may be changed, or at varying prices determined
at the time of sale or at negotiated prices. Such prices will be determined
by the Selling Shareholders or by agreement between the Selling Shareholders
and underwriters or dealers.
The Company will pay all of the expenses incident to the registration,
offering and sale of the Shares to the public other than (i) discounts,
commissions, fees and expenses of underwriters, dealers or agents and (ii)
fees and expenses of the Selling Shareholders other than in certain limited
circumstances. The Company also has agreed to indemnify the Selling
Shareholders and any underwriter they may utilize against certain
liabilities, including liabilities under the Securities Act.
In order to comply with certain states' securities laws, if applicable,
the Shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states the Shares may not be sold
unless the Shares have been registered or qualified for sale in such state,
or unless an exemption from registration or qualification is available and is
obtained.
LEGAL MATTERS
Certain legal matters have been passed upon for the Company by Robinson
Silverman Pearce Aronsohn & Berman LLP, New York, New York. The legal
authorization and issuance of the Common Stock, as well as certain other
legal matters concerning Maryland law, have been passed upon for the Company
by Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1997, and
the combined statement of revenues and certain expenses of the Saracen
Properties for the year ended December 31, 1997 appearing in the Company's
Current Report on Form 8-K/A dated April 28, 1998, have been audited by Ernst
& Young LLP, independent auditors, as set forth in their reports thereon
included therein and incorporated herein by reference. Such financial
statements are incorporated herein in reliance upon the reports of Ernst &
Young LLP pertaining to such financial statements given upon the authority of
such firm as experts in accounting and auditing.
The combined statement of revenues and certain expenses of the Whitehall
Properties for the year ended December 31, 1996, the statement of revenues
and certain expenses of Mountain Heights Office Center for the year ended
December 31, 1996, and the statement of revenues and certain expenses of
Sonterra at Williams Centre for the year ended December 31, 1996, all of
which have been included in Amendment No. 1 to the Company's registration
statement on Form S-4 (Registration No. 333-42277), have all been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports
thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein in reliance upon the reports of
Ernst & Young LLP pertaining to such financial statements given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of VLP at September 30, 1997 and
1996 and for the years then ended appearing in Amendment No. 1 to the
Company's registration statement on Form S-4 (Registration No. 333-42277),
have been incorporated by reference herein and in the Registration Statement
in reliance on the reports of Coopers & Lybrand L.L.P., independent
accountants, and upon the authority of said firm as experts in accounting and
auditing. The consolidated statements of operations and cash flows of VLP for
the year ended September 30, 1995 appearing in the VLP Annual Report (Form
10-K) for the year ended September 30, 1997, which is included in Amendment
No. 1 to the Company's registration statement on Form S-4 (Registration No.
333-42277), have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein in reliance
upon the report of Ernst & Young LLP pertaining to such financial statements
given upon the authority of such firm as experts in accounting and auditing.
The combined statement of revenues and certain expenses of The Abbey
Companies, for the year ended December 31, 1996, appearing in Amendment No. 1
to the Company's registration statement on Form S-4 (Registration No. 333-
42277), has been incorporated by reference herein and in the Registration
Statement in reliance on the reports of Coopers & Lybrand L.L.P., independent
accountants, and upon the authority of said firm as experts in accounting and
auditing.
The combined statement of revenue and certain expenses of the DFW Trade
Center I, L.P., Buildings 1, 2 and 3 from the date of inception (July 1,
1996) to December 31, 1996, appearing in Amendment No.1 to the Company's
registration statement on Form S-4 (Registration No. 333-42277), has been
audited by Arthur Andersen LLP, independent public accountants, to the extent
and for the period as indicated in their report with respect thereto which
has been incorporated by reference herein and in the Registration Statement
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said reports.
<PAGE>
=============================================================================
No dealer, salesperson or other individual has been authorized to give
any information or make any representations not contained in this Prospectus
in connection with the offering covered by this Prospectus. If given or
made, such information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy the Shares in any jurisdiction
where, or to any person to whom, it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus, nor any sale made
hereunder shall, under any circumstances, create any implication that there
has been no change in the facts set forth in this Prospectus or in the
affairs of the Company since the date hereof.
------------
SUMMARY TABLE OF CONTENTS
Page
Special Note Regarding Forward-Looking Statements. . . . . . . . . . . . . .2
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Documents Incorporated by Reference. . . . . . . . . . . . . . . . . . . . .3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12,242,719 Shares
WELLSFORD REAL PROPERTIES, INC.
Common Stock
-------------
PROSPECTUS
-------------
_________ __, 1998
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits
(a) Exhibits:
4.1 Specimen certificate for Common Stock (incorporated by reference to
Exhibit 4.1 to Form 10/A Amendment No. 2 (Registration No. 001-12917)
filed on May 28, 1997).
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP, regarding legality
of securities being registered.*
23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in
Exhibit 5.1).*
23.2 Consent of Ernst & Young LLP relating to the incorporation by
reference of the combined statement of revenues and certain expenses
of the Saracen Properties, the consolidated financial statements and
schedules of the Company and its subsidiaries, the statement of
revenues and certain expenses of Mountain Heights Office Center, the
statement of revenues and certain expenses of Sonterra at Williams
Centre and the combined statement of revenues and certain expenses of
the Whitehall Properties.
23.3 Consent of Coopers & Lybrand L.L.P relating to the incorporation by
reference of the consolidated financial statements of Value Property
Trust.
23.4 Consent of Ernst & Young LLP relating to the incorporation by
reference of the consolidated financial statements of Value Property
Trust.
23.5 Consent of Coopers & Lybrand L.L.P. relating to the incorporation by
reference of the combined statement of revenues and certain expenses
of The Abbey Companies.
23.6 Consent of Arthur Andersen LLP relating to the incorporation by
reference of the audited combined statement of revenue and certain
expenses of the DFW Trade Center I, L.P., Buildings 1, 2 and 3.
24.1 Power of Attorney.*
______________________________
* Previously filed.
Item 17. Undertakings.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The Company hereby further undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The Company hereby further undertakes to deliver or cause to be delivered
with the Prospectus, to each person to whom the Prospectus is sent or given,
the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the Prospectus, to deliver, or cause to be
delivered to each person to whom the Prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Post-Effective Amendment No.1 on Form S-3 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York on June 11, 1998.
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Jeffrey H. Lynford
---------------------------------
Jeffrey H. Lynford
Chairman of the Board, Secretary and Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No.1 on Form S-3 to the Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated:
Signature Title Date
/s/ Jeffrey H. Lynford Chairman of the Board, June 11, 1998
_________________________ Secretary and Director
Jeffrey H. Lynford
*Edward Lowenthal President, Chief Executive June 11, 1998
_________________________ Officer and Director (principal
Edward Lowenthal executive officer)
*Gregory F. Hughes Chief Financial Officer June 11, 1998
_________________________ (principal financial and
Gregory F. Hughes accounting officer)
*Douglas Crocker Director June 11, 1998
_________________________
Douglas Crocker
*Rodney F. Du Bois Director June 11, 1998
_________________________
Rodney F. Du Bois
*Mark S. Germain Director June 11, 1998
_________________________
Mark S. Germain
*Frank J. Hoenemeyer Director June 11, 1998
_________________________
Frank J. Hoenemeyer
*Frank J. Sixt Director June 11, 1998
_________________________
Frank J. Sixt
*By: /s/ Jeffrey H. Lynford
-----------------------------------
Jeffrey H. Lynford
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Document
4.1 Specimen certificate for Common Stock (incorporated by reference
to Exhibit 4.1 to Form 10/A Amendment No. 2 (Registration No. 001-
12917) filed on May 28, 1997).
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP, regarding
legality of securities being registered.*
23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in
Exhibit 5.1).*
23.2 Consent of Ernst & Young LLP relating to the incorporation by
reference of the combined statement of revenues and certain
expenses of the Saracen Properties, the consolidated financial
statements and schedules of the Company and its subsidiaries, the
statement of revenues and certain expenses of Mountain Heights
Office Center, the statement of revenues and certain expenses of
Sonterra at Williams Centre and the combined statement of revenues
and certain expenses of the Whitehall Properties.
23.3 Consent of Coopers & Lybrand L.L.P. relating to the incorporation
by reference of the consolidated financial statements of Value
Property Trust.
23.4 Consent of Ernst & Young LLP relating to the incorporation by
reference of the consolidated financial statements of Value
Property Trust.
23.5 Consent of Coopers & Lybrand L.L.P. relating to the incorporation
by reference of the combined statement of revenues and certain
expenses of The Abbey Companies.
23.6 Consent of Arthur Andersen LLP relating to the incorporation by
reference of the audited combined statement of revenue and certain
expenses of DFW Trade Center I, L.P., Buildings 1, 2 and 3.
24.1 Power of Attorney.*
______________________________
* Previously filed.
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Post Effective Amendment No.1 on Form S-3 to the Registration Statement (Form
S-11 No. 333-32445) and related Prospectus of Wellsford Real Properties, Inc.
for the registration of 12,242,719 shares of its common stock, and to the
incorporation by reference therein of our reports dated (a) April 9, 1998,
with respect to the combined statement of revenues and certain expenses of
the Saracen Properties, included in the Current Report on Form 8-K/A of
Wellsford Real Properties, Inc., dated April 28, 1998, and (b) February 23,
1998, (except for the tenth through thirteenth paragraphs of Note 12, as to
which the date is March 11, 1998), with respect to the consolidated financial
statements and schedules of Wellsford Real Properties, Inc. and subsidiaries
included in its Annual Report (Form 10-K) for the year ended December 31,
1997, filed with the Securities and Exchange Commission. We also consent to
the incorporation by reference of our reports dated (a) December 19, 1997,
with respect to the statement of revenues and certain expenses of Mountain
Heights Office Center, (b) December 19, 1997, with respect to the statement
of revenues and certain expenses of Sonterra at Williams Centre, and (c)
October 20, 1997, with respect to the combined statement of revenues and
certain expenses of the Whitehall Properties, each of which was included in
Amendment No. 1 to the Registration Statement (Form S-4 No. 333-42277) and
related Prospectus of Wellsford Real Properties, Inc. for the registration of
3,350,000 shares of its common stock and related Proxy Statement of Value
Property Trust, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
June 11, 1998
Exhibit 23.3
Consent of Independent Accountants
We consent to the incorporation by reference in this post-effective amendment
No. 1 on Form S-3 to Form S-11 registration statement of our report dated
November 28, 1997, on our audits of the consolidated financial statements and
financial statement schedules of Value Property Trust as of September 1997
and 1996 and for the years then ended. We also consent to the reference to
our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
New York, New York
June 11, 1998
Exhibit 23.4
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Post Effective Amendment No.1 on Form S-3 to the Registration Statement (Form
S-11 No. 333-32445) and related Prospectus of Wellsford Real Properties, Inc.
for the registration of 12,242,719 shares of its common stock and to the
incorporation by reference therein of our report dated November 10, 1995,
with respect to the consolidated financial statements of Value Property Trust
for the year ended September 30, 1995, included in the Value Property Trust
1997 Annual Report (Form 10-K) for the year ended September 30, 1997 which is
included in Amendment No. 1 to the Registration Statement (Form S-4 No. 333-
42277) and related Prospectus of Wellsford Real Properties, Inc. for the
registration of 3,350,000 shares of its common stock and related Proxy
Statement of Value Property Trust, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
June 11, 1998
Exhibit 23.5
Consent of Independent Accountants
We consent to the incorporation by reference in this post-effective amendment
No. 1 on Form S-3 to Form S-11 registration statement of our report dated
March 28, 1997 on our audit of the combined statement of revenues and certain
expenses of The Abbey Companies for the year ended December 31, 1996. We also
consent to the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
New York, New York
June 11, 1998
Exhibit 23.6
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
on the Combined Statement of Revenue and Certain Expenses of the DFW Trade
Center I, L.P., Buildings 1, 2 and 3 from the date of inception (July 1,
1996) to December 31, 1996, dated November 24, 1997, included in or made a
part of this registration statement of Wellsford Real Properties, Inc. on
Form S-3.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
June 10, 1998
