<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-31437
CORPORATE PROPERTY ASSOCIATES 14
INCORPORATED
CUMULATIVE SUPPLEMENT DATED APRIL 9, 1999 TO
PROSPECTUS DATED AUGUST 18, 1998
(INCLUDES INFORMATION IN
SUPPLEMENT DATED NOVEMBER 16, 1998
AND SUPPLEMENT DATED JANUARY 21, 1999
(HEREINAFTER THE "PROSPECTUS")
SUMMARY OF THE SUPPLEMENT
DESCRIPTION OF PROPERTIES (PAGE 2)
This section sets forth information on the Company's acquisition of the
office facility leased to Advanced Micro Devices, Inc., the industrial and
office facility leased to Contraves Brashear Systems, L.P., the industrial and
office facility leased to Intesys Technologies, Inc., the office facility leased
to CompuCom Systems, Inc., and the warehouse and office facility leased to
Production Resource Group, L.L.C.
THE OFFERING (PAGE 12)
This section sets forth information on the sale of shares and the issuance
of shares to shareholders.
Capitalized terms not defined herein will have the meanings ascribed to
them in the Prospectus.
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DESCRIPTION OF THE PROPERTIES
PROPERTY LEASED TO ADVANCED MICRO DEVICES, INC.
General
On December 22, 1998, the Corporate Property Associates 14 Incorporated
(the "Company"), Carey Institutional Properties Incorporated ("CIP(R)") and
Corporate Property Associates 12 Incorporated ("CPA(R):12") through their
interests in a newly formed limited liability company (the "AMD LLC") acquired
from CIBC, Inc. an office facility (the "AMD Facility"). The AMD Facility,
containing approximately 364,000 square feet, is located on 45.625 acres of land
in Sunnyvale, California. The AMD Facility is suitable and adequate for its
intended uses. The Company, CIP(R) and CPA(R):12 each own a one-third interest
in the AMD LLC. The cost of the AMD Facility will be depreciated for tax
purposes over a 40-year period on a straight line basis.
Concurrently with the acquisition of the AMD Facility, the AMD LLC entered
into a net lease with the AMD (the "AMD Lease"). Material terms of the AMD Lease
are described below.
PURCHASE TERMS
The cost to the AMD LLC of acquiring the AMD Facility, including the
Acquisition Fee payable to an Affiliate of the Advisor, is $95,287,958, an
amount less than the Appraised Value of the AMD Facility. The AMD LLC paid an
Acquisition Fee of $3,017,451 to W.P. Carey & Co, Inc. ("W.P. Carey & Co."), an
affiliate of the Advisor, Carey Property Advisors. W.P. Carey & Co. will receive
a Subordinated Acquisition fee of $158,813 payable each of the next eight years,
but will only receive the full amount if the Company and CPA(R):12 satisfy the
Preferred Return.
DESCRIPTION OF THE LEASE
General
The AMD Lease is absolutely net and bondable and in normal financeable
form. AMD will pay maintenance, insurance, taxes and all other expenses
associated with the operation and maintenance of the AMD Facility, except for
the AMD LLC's debt service and income taxes. In the opinion of management, the
AMD Property is adequately covered by insurance.
Term
The initial term of the AMD Lease is 20 years followed by two ten-year
renewal terms at the option of AMD.
Rent
The annual rent during the initial term under the AMD Lease is $9,145,500,
adjusted every three years based on a multiple of the increase in the Consumer
Price Index ("CPI"), capped at 6.903% for each three year period.
DESCRIPTION OF FINANCING
Concurrently with the acquisition of the AMD Facility, the AMD LLC obtained
a mortgage loan in the amount of $68,250,000 from GMAC Commercial Mortgage
Corporation with a ten-year term and thirty (30) year amortization schedule at
an interest rate of 7.78%.
DESCRIPTION OF ADVANCED MICRO DEVICES, INC.
AMD is a global supplier of integrated circuits for the personal and
networked computer and communications market. AMD produces processors, flash
memories, programmable logic devices and products for communications and
networking applications.
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Financial statements for AMD are on file with the Securities and Exchange
Commission. The following is a summary of selected financial information for
AMD:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1998 1997 1996
----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF INCOME
Net sales...................................... $2,542,141 $2,356,375 $1,953,019
Expenses....................................... 2,705,783 2,447,028 2,206,329
Operating income............................... (163,642) (90,653) (253,310)
Net income..................................... (103,960) (21,090) (68,950)
Net income per common share (basic)............ (0.72) (0.15) (0.51)
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------------------------------
1998 1997 1996
----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash and short-term investments................ $ 697,025 $ 467,032 $ 586,198
Total current assets........................... 1,562,027 1,175,267 1,029,077
Property, plant and equipment, net............. 2,268,468 1,990,689 1,787,402
Total assets................................... 4,252,968 3,515,271 3,145,283
Total current liabilities...................... 840,719 726,770 583,473
Total shareholders' equity..................... 2,005,049 2,029,543 2,021,878
</TABLE>
PROPERTY LEASED TO CONTRAVES BRASHEAR SYSTEMS, L.P.
General
On December 28, 1998, Company purchased from Stupar Holdings Corporation an
industrial and office facility (the "Contraves Facility"). The Contraves
Facility, containing approximately 151,124 square feet, is located in
Pittsburgh, Pennsylvania. The Contraves Facility is suitable and adequate for
its intended uses. The cost of the Contraves Facility will be depreciated for
tax purposes over a 40-year period on a straight-line basis.
Concurrently with the acquisition of the Contraves Facility, the Company
entered into a net lease with Contraves (the "Contraves Lease") with Contraves
Brashear Systems, L.P. Material terms of the Contraves Lease are described
below.
PURCHASE TERMS
The cost to the Company of acquiring the Contraves Facility, including the
Acquisition Fee payable to the Advisor, was $6,806,283, an amount less than the
leased fee Appraised Value of the Contraves Facility. The Company paid an
acquisition fee of $170,157 to W.P. Carey & Co. W.P. Carey & Co. will receive a
Subordinated Acquisition Fee of $17,016 payable in each of the next eight years,
but only if the Company satisfies the Preferred Return.
DESCRIPTION OF THE LEASE
General
The Contraves Lease is absolutely net and bondable and in normal
financeable form. Contraves will pay maintenance, insurance, taxes and all other
expenses associated with the operation and maintenance of the Contraves
Facility. In the Company's opinion, the Contraves Facility is adequately covered
by insurance.
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Term
The initial term of the Contraves Lease is fifteen years, followed by two
five-year automatic renewal terms, unless Contraves notifies the Company in
writing at least fifteen calendar months prior to the expiration of the term
that Contraves is terminating the Contraves Lease.
Rent
The initial annual rent under the Contraves Lease is $643,500 payable
quarterly in advance in equal installments of $160,875. Additionally, the
Contraves Lease provides that annual rent will be adjusted every three years
based on increased in the CPI capped at 9.27% for each rent increase.
DESCRIPTION OF FINANCING
Peoples Bank of Western Pennsylvania provided non-recourse mortgage
financing to the Company in the form of a loan in the amount of $4,225,000 with
a ten year maturity and a 7.50% fixed rate of interest for ten years and with
payments made in accordance with a 25-year amortization schedule.
DESCRIPTION OF CONTRAVES BRASHEAR SYSTEMS, L.P.
Contraves designs and manufactures electro-optical and electro-mechanical
systems and instrumentation for commercial and defense markets. The company
operates in four product areas: telescope systems, optical components,
electro-optical systems for fire control, tracking and surveillance and small
arms fire control systems.
Contraves was incorporated in September, 1997. The following is a summary
of selected financial data for Contraves for the last year:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 27, 1998
------------------
(IN THOUSANDS)
<S> <C>
STATEMENT OF OPERATIONS
Contract revenue............................................ $21,704
Cost of sales............................................... 18,977
Interest expense............................................ 128
Net income.................................................. 501
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 27, 1998
------------------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA
Cash and investments.................................... $ 445
Total assets............................................ 13,198
Long liabilities........................................ 8,690
Partners' capital....................................... 3,500
Total equity............................................ 4,508
</TABLE>
PROPERTY LEASED TO INTESYS TECHNOLOGIES, INC.
General
On February 3, 1999, the Company and CPA(R):12 jointly formed a limited
liability company (the "Intesys LLC") to purchase from Intesys Technologies,
Inc. ("Intesys") an office and manufacturing facility (the "Intesys Facility").
The Intesys Facility, containing approximately 243,370 square feet, is located
in Gilbert, Arizona. The Intesys Facility is suitable and adequate for use as a
light industrial/office facility. The cost of the Intesys Facility will be
depreciated for tax purposes over a 40-year period on a straight-line basis.
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Concurrently with the acquisition of the Intesys Facility, the Intesys LLC
entered into a net lease (the "Intesys Lease") with Intesys for the Intesys
Facility. Material terms of the Intesys Lease are described below.
PURCHASE TERMS
The cost to the Intesys LLC of acquiring the Intesys Facility, including
the Acquisition Fee payable to W. P. Carey & Co., was approximately $23,560,209,
an amount less than the leased fee Appraised Value of the Intesys Facility. The
Intesys LLC paid an Acquisition Fee of $589,005 to W.P. Carey & Co. W.P. Carey &
Co. will receive a Subordinated Acquisition Fee of $58,900, payable each of the
next eight years, but only if the Company satisfies the Preferred Return.
DESCRIPTION OF THE LEASE
General
The Intesys Lease is absolutely net and bondable and in normal financeable
form. Intesys will pay maintenance, insurance, taxes and all other expenses
associated with the operation and maintenance of the Intesys Facility. In the
opinion of management, the Intesys Facility is adequately covered by insurance.
Term
The initial term of the Intesys Lease is twenty years, followed by two
ten-year renewal terms at the option of Intesys.
Rent
The initial annual rent under the Intesys Lease is $2,274,750 payable
quarterly in advance in equal installments of $568,687.50. Additionally, the
Intesys Lease provides that beginning at the end of the third year of the
initial term and every three years thereafter, the annual rent for each of the
next three years of the term will be adjusted by a formula that increases the
annual rent by the cumulative increase in the CPI over the immediately preceding
three years, but not in excess of 9% for each three year period.
DESCRIPTION OF FINANCING
The Intesys LLC is currently seeking mortgage financing for the Intesys
Facility.
DESCRIPTION OF INTESYS SYSTEMS, L.P.
Founded in 1972 as Pixlly-Richards West, Inc., Intesys is a high-end,
value-added injection molder. The Company designs, produces and assembles
plastic components for use in other companies' end products.
The following is a summary of selected financial data for Intesys for three
years:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
INCOME STATEMENT
Revenue............................................ $142,757 $156,744 $122,332
Net income......................................... 13,714 14,714 9,668
Income (loss) before extraordinary item............ 1,741 865 (2,457)
Net income (loss).................................. (496) 451 (3,306)
</TABLE>
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<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------
1998 1997 1996
---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash and equivalents............................... $ 955 $ 43 $ 166
Accounts receivable................................ 14,200 23,738 18,739
Total assets....................................... 60,344 70,301 68,574
Accounts payable................................... 8,814 16,231 10,888
Long term debt..................................... 100,050 92,778 99,352
Total shareholder's equity......................... (57,044) (55,948) (56,400)
</TABLE>
PROPERTY LEASED TO COMPUCOM SYSTEMS, INC.
General
On March 31, 1999, the Company, CIP(R) and CPA(R):12, through their
interests in a newly formed limited liability company (the "CompuCom LLC"),
acquired from CompuCom Systems, Inc. ("CompuCom") an office facility (the
"CompuCom Facility"). The CompuCom Facility, containing approximately 250,000
square feet, is located on approximately 20 acres of land in Dallas, Texas. The
CompuCom Facility is suitable and adequate for its intended uses. The cost of
the CompuCom Facility will be depreciated for tax purposes over a 40-year period
on a straight line basis.
Concurrently with the acquisition of the CompuCom Facility, the CompuCom
Facility entered into a net lease with CompuCom (the "CompuCom Lease") material
terms of the CompuCom Lease are described below.
PURCHASE TERMS
The cost of acquiring the CompuCom Facility, including the Acquisition Fee
payable to W.P. Carey & Co., was $39,790,500, an amount less than the Appraised
Value of the CompuCom Facility. The CompuCom LLC paid an Acquisition Fee of
$1,259,981 to W.P. Carey & Co. W.P. Carey will receive a Subordinated
Acquisition Fee of $66,315 payable in each of the next eight years, but only if
the Company satisfies the Preferred Return.
DESCRIPTION OF THE LEASE
General
The CompuCom Lease is triple net. CompuCom will pay maintenance, insurance,
taxes and all other expenses associated with the operation and maintenance of
the CompuCom Facility.
Term
The initial term of the CompuCom Lease commenced on March 31, 1999, and
shall continue for a period of twenty (20) years followed by two successive
five-year renewal terms at the option of CompuCom.
Rent
The annual rent during the initial term of the CompuCom Lease is $3,914,000
adjusted every three years based on increases in the CPI, capped at 13.30% for
each three year period.
DESCRIPTION OF FINANCING
Concurrently with the acquisition of the CompuCom Facility, the CompuCom
LLC obtained a mortgage loan in the amount of $23,000,000 from Wells Fargo Bank,
N.A. with a ten-year term and twenty-five
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(25) year amortization schedule at an interest rate of 7.215% per annum. Under
the loan agreement, the Company guaranteed jointly and severally with CPA(R):12
and CIP(R) certain recourse obligations of the CompuCom LLC.
DESCRIPTION OF COMPUCOM SYSTEMS, INC.
CompuCom provides network integration services and desktop products for
large corporate customers.
Financial statements for CompuCom are on file with the Securities and
Exchange Commission. The following is a summary of selected financial
information for CompuCom:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------
1998 1997 1996
----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF INCOME
Total revenue.................................. $2,254,465 $1,949,802 $1,995,191
Gross margin................................... 283,960 267,545 240,963
Total operating expenses....................... 264,550 199,564 184,321
Net earnings................................... 401 35 ,194 30,471
Earnings per common share (basic).............. 0.01 0.75 0.66
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------
1998 1997 1996
----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash............................................... $ 4,453 $ 4,456 $ 4,320
Total current assets............................... 415,422 382,435 618,890
Property, plant and equipment, net................. 72,004 63,359 54,308
Total assets....................................... 545,489 462,590 692,985
Long term debt..................................... 81,929 97,400 236,450
Total stockholders' equity......................... 210,281 210,200 171,098
</TABLE>
PROPERTY LEASED TO PRODUCTION RESOURCE GROUP, L.L.C.
General
On March 31, 1999, the Company purchased from Scenic Properties L.L.C. a
warehouse and office facility (the "PRG Facility"). The PRG Facility, containing
105,000 square feet, is located on approximately 5.69 acres of land in Las
Vegas, Nevada. The PRG Facility is suitable and adequate for its intended uses.
The cost of the PRG Facility will be depreciated for tax purposes over a 40-year
period on a straight-line basis.
Concurrently with the acquisition of the PRG Facility, the Company entered
into a net lease (the "PRG Lease) with Production Resource Group, L.L.C.
Material terms of the PRG Lease are described below.
PURCHASE TERMS
The cost of acquiring the PRG Facility, including the Acquisition Fee
payable to W.P. Carey & Co., was $8,380,000, an amount less than the Appraised
Value of the PRG Facility. The Company paid an Acquisition Fee of $211,111 to
W.P. Carey & Co. W.P. Carey & Co. will receive a Subordinated Acquisition Fee of
$21,111 payable in each of the next eight years, but only if the Company
satisfies the Preferred Return.
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<PAGE> 8
DESCRIPTION OF THE LEASE
General
The PRG Lease is triple net. PRG will pay maintenance, insurance, taxes and
all other expenses associated with the operation and maintenance of the PRG
Facility. In the Company's opinion, the PRG Facility is adequately covered by
insurance.
Term
The initial term of the PRG Lease commenced on March 31, 1999, and shall
continue for a period of fifteen (15) years followed by two successive five-year
renewal terms at the option of PRG.
Rent
The annual rent during the initial term under the PRG Lease is $884,000,
payable quarterly in advance in equal installments of $221,000. Additionally,
the PRG Lease provides that annual rent will be adjusted every two years based
on cumulative increases in the CPI.
DESCRIPTION OF FINANCING
The Company is currently seeking financing from an institutional lender.
DESCRIPTION OF PRODUCTION RESOURCES GROUP, L.L.P.
PRG is a designer and producer of sets for themed events and Broadway shows
as well as a lessor of equipment for corporate themed events.
Financial Statements for PRG are on file with the Securities and Exchange
Commission. The following is a summary of selected financial information for
PRG:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1998 1997 1996
---------- --------- ------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF INCOME
Revenues........................................... $174,603 $75,180 $1,953,019
Total costs........................................ 119,114 52,312 2,206,329
Gross profit....................................... 55,489 22,868 (253,310)
Net income (loss).................................. (5,967) (7,771) (68,950)
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------
1998 1997 1996
---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents........................... $ 6,014 $ 27,164 $ 719
Total current assets................................ 59,902 56,658 3,858
Property, plant and equipment, net.................. 82,096 49,236 7,784
Total assets........................................ 196,106 128,252 11,969
Total current liabilities........................... 46,759 21,426 3,320
Total long-term debt................................ 149,195 103,743 1,113
</TABLE>
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THE OFFERING
On March 15, 1999 the Company issued 4,190,272 shares to investors in
return for approximately $41,805,071, net of discounts, in net proceeds
previously held in escrow. As of March 15, 1999, the Company had issued a total
of 16,008,172 shares in exchange for gross proceeds of approximately
$159,926,921, net of discounts.
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