Prospectus Supplement
to Prospectus dated
May 15, 1998 (Registration
No. 333-35063)
filed under
Rule 424(b)(3)
BARON CAPITAL TRUST
(THE "TRUST")
SUPPLEMENT DATED AUGUST 11, 1998
TO THE PROSPECTUS
DATED MAY 15, 1998
In May 1998, the Trust commenced a public offering of Common Shares of
beneficial interest in the Trust (the "Offering") pursuant to a Prospectus dated
May 15, 1998 (the "Prospectus"). To date, the Trust has sold 289,446 Common
Shares at $10 per share in its Offering (gross proceeds of $2,894,460). All
offering proceeds received by the Trust have been released from the escrow
account with American Stock Transfer & Trust Company since the Trust has
fulfilled the escrow requirements described in the Prospectus.
The Prospectus, the Declaration of Trust for the Trust dated May 15, 1998
(the "Declaration") and the Agreement of Limited Partnership of Baron Capital
Properties, L.P. (dated as of May 15, 1998) (the "Operating Partnership," of
which partnership the Trust is the sole general partner and a limited partner)
have been supplemented and amended by this Supplement as follows, effective
August 11, 1998. This Supplement sets forth certain revisions to those documents
required as a condition to the sale of Common Shares in certain states and
reflects the elimination of the right of the Managing Shareholder of the Trust
to receive certain non-accountable fees in connection with the Offering and the
formation and operations of the Trust and the Operating Partnership and the
substitution in place of such fees of the right to be reimbursed for certain
out-of-pocket expenses formerly covered by such fees. Pages 11 and 12 of this
Supplement describe three individuals who have recently joined the Operating
Partnership as executive officers.
In addition, this Supplement describes the Trust's recent acquisition of
beneficial ownership of a 67-unit residential apartment property located in
Orlando, Florida and an 80-unit property located in Lakeland, Florida. The
acquisitions, which had a total cash purchase price of $1,586,293, represent the
Trust's initial investments. Finally, this Supplement provides updated
information concerning the proposed Exchange Offering of the Operating
Partnership in which it will offer to issue units of limited partnership
interest to be registered with the Securities and Exchange Commission and
certain states in exchange for limited partnership interests in limited
partnerships which own direct or indirect interests in residential apartment
properties.
Capitalized terms used in this Supplement have the meanings ascribed to
them in the Prospectus, unless the context otherwise indicates.
AMENDMENTS TO DECLARATION,
OPERATING PARTNERSHIP AGREEMENT
AND PROSPECTUS
1. Each prospective Investor should consider all factors discussed under the
heading "Risk Factors" set forth in the Prospectus in evaluating the Offering,
the Trust, the Operating Partnership, the proposed Exchange Offering and the
business of the Trust and the Operating Partnership, including the following
material risk factors:
o Real estate investment risks exist such as the effect of economic and
other conditions on cash flows from real estate interests acquired by
the Operating Partnership.
<PAGE>
o Distributions of available cash flow to Shareholders will be dependent
upon the operating profits generated by the Operating Partnership.
o Financing risks exist, including debt service obligations, the ability
of the Trust and the Operating Partnership to incur additional debt,
the need to refinance current indebtedness at various maturity dates
and the effect of any increase in interest rates.
o The founders of the Trust and affiliates have significant influence
over the operation of the Trust and the Operating Partnership, and
this Offering and the proposed Exchange Offering involve transactions
among them which involve conflicts of interest which may result in
decisions that do not fully represent the interests of all
Shareholders.
o The offering price of $10.00 per Common Share has been arbitrarily
established by the Trust, and does not necessarily represent the price
at which Common Shares could be resold, if at all.
o Although Common Shares are expected to eventually be listed on the
American Stock Exchange, it is possible that no public market will
ever develop or be maintained, resulting in lack of liquidity.
o The successful operation of the Trust and the Operating Partnership is
dependent on key management.
o The Trust will be taxed as a corporation if it fails to qualify as a
REIT.
o Investors may not have an opportunity prior to acquiring Common Shares
to evaluate a significant number of properties in which the Trust and
Operating Partnership may acquire an interest.
o There can be no assurance of the successful completion of this
Offering and the proposed Exchange Offering.
2. The Prospectus is hereby amended to include the organizational chart set
forth on the following page which indicates the relationship among the Trust,
the Operating Partnership, the Managing Shareholder, the Exchange Partnerships
managed by affiliates of the Managing Shareholder which will participate in the
proposed Exchange Offering and other real estate limited partnerships managed by
affiliates of the Managing Shareholder which will not participate in the
offering.
3. The Declaration is hereby amended by moving the last sentence of Section
1.6(c) and inserting it after the first sentence of Section 1.6(e) and then
adding the following thereafter. The Prospectus is hereby amended by adding the
following to the second paragraph on page 12 thereof.
"The Trust also may not sell Common Shares in the Offering to, or accept as
a Shareholder, any Arkansas, Pennsylvania or Texas investor whose
investment would exceed 10% of his net worth (exclusive of home, home
furnishings and automobiles)."
4. The Prospectus is hereby amended by inserting on page 19 after "Summary of
Use of Proceeds" the following summary of fees and reimbursable expenses payable
in connection with the Offering and the proposed Exchange Offering and the
operation of the Trust and the Operating Partnership. For a more detailed
description of such fees, see "Compensation of the Managing Shareholder and
Affiliates," "Management - Officers of the Trust" and "Terms of the Offering."
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ORGANIZATIONAL CHART
CASH OFFERING
-------------------------
Public Shareholders
-------------------------
^ |
Common | |
Shares | | $
| |
| |
-------------------------
Board of the REIT:
Baron Capital Trust - 2 Independent Trustees
(REIT)
- Managing Shareholder
(managed by Board of (an affiliate of Mr.
Managing Shareholder McGrath, a founder of
and Independent the Trust and the
Trustees) Operating Partnership)
-------------------------
^ |
| |
EXCHANGE OFFERING OP Units | | $
| |
| |
- -------------------------- ------------------------- -------------------------
Exchange Baron Capital $ and other
LP Units Properties, L.P. consideration Original Investors
Exchange Partnerships* ________> (Operating Partnership) <_________
(Gregory K. McGrath
(managed by affiliates <________ (GP is REIT; LPs are _________> and Robert S. Geiger)
of Managing Shareholder) Original Investors and
OP Units Exchange Limited OP Units
Partners)
- -------------------------- ------------------------- -------------------------
/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\
\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/\/
-------------------------
Non-participating
Real Estate Limited
Partnerships
(managed by affiliates
of Managing Shareholder)
-------------------------
- ------------------
* Each Exchange Partnership is a real estate investment program which owns
either record title to residential apartment property or the entire limited
partnership interest or beneficial interest in a limited partnership or other
entity which owns record title to such property.
</TABLE>
<PAGE>
Summary of Fees and Reimbursable Expenses
<TABLE>
<CAPTION>
Recipient Type and Amount of Fees and Reimbursable Expenses
- --------- -------------------------------------------------
<S> <C>
Broker-Dealers Selling commission in an amount equal to 8% of
Participating in Offering the subscription price of all Common Shares
sold in the Offering ($2,000,000 maximum).
Managing Shareholder Reimbursement for distribution, due diligence
and organizational expenses incurred in
connection with the formation of the Trust and
the Operating Partnership and with the
Offering, in an amount not to exceed 1% of
gross Offering proceeds ($250,000 maximum).
Managing Shareholder Reimbursement for legal, accounting and
consulting fees and printing, filing,
recording, postage and other miscellaneous
expenses incurred in connection with the
Offering, in an amount not to exceed 1% of
gross Offering proceeds ($250,000 maximum).
Managing Shareholder Reimbursement for expenses incurred prior to
and during the Offering for investigating,
evaluating and consummating Trust investments,
in an amount not to exceed 4% of gross
Offering proceeds; payable from available net
proceeds of the Offering or as cash flow
permits as determined by the Board of the
Trust.
Gregory K. McGrath, a Initial annual compensation in the form of
founder of the Trust Common Shares or other securities in an amount
and the Operating not to exceed 25,000 shares to be determined
Partnership and Chief by the Executive Compensation Committee of the
Executive Officer of Board, plus health benefits. Thereafter, his
the Trust, the compensation and benefits will be determined
Operating Partnership by the committee. In exchange for an initial
and the Managing capital contribution to the Operating
Shareholder Partnership and other consideration, Mr.
McGrath has been issued Units which are
exchangeable (subject to certain escrow
restrictions) into 9.5% of the Common Shares
outstanding after the completion of the
Offering and the proposed Exchange Offering,
on a fully diluted basis assuming that all
then outstanding Units (other than those owned
by the Trust) have been exchanged into an
equivalent number of Common Shares. See "The
Trust - Formation Transactions."
Robert S. Geiger, a Initial annual compensation of $100,000, plus
founder of the Trust health benefits and eligibility to participate
and the Operating in any option plan and bonus incentive plan
Partnership and Chief which may be implemented by the Executive
Operating Officer of Compensation Committee. In exchange for an
the Trust, the initial capital contribution to the Operating
Operating Partnership Partnership and other consideration, Mr.
and the Managing Geiger has been issued Units which are
Shareholder exchangeable (subject to certain escrow
restrictions) into 9.5% of the Common Shares
outstanding after the completion of the
Offering and the proposed Exchange Offering,
on a fully diluted basis assuming that all
then outstanding Units (other than those owned
by the Trust) have been exchanged into an
equivalent number of Common Shares. See "The
Trust - Formation Transactions."
Robert L. Astorino, Initial annual salary of $150,000, plus health
President - Property benefits and eligibility to participate in any
of the Operating option plan and bonus incentive plan which may
Partnership be implemented by the Executive Compensation
Committee.
</TABLE>
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<PAGE>
David E. Williams, Initial annual salary of $150,000, plus health
Chief Financial benefits and eligibility to participate in any
Officer of the option plan and bonus incentive plan which may
Operating Partnership be implemented by the Executive Compensation
Committee.
Mary E. Keane, Vice Initial annual salary of $130,000, plus health
President - Accounting benefits and eligibility to participate in any
and Strategic Planning option plan and bonus incentive plan which may
of the Operating be implemented by the Executive Compensation
Partnership and Committee.
Secretary of the Trust
Independent Trustees Annual fee of $6,000.
Managing Shareholder Annual payment in an amount up to 1% of gross
Offering proceeds plus 1% of initial value of
Units issued in proposed Exchange Offering to
reimburse the Managing Shareholder for its
operating expenses relating to the business of
the Trust and the Operating Partnership.
Broker-Dealers Commission payable to broker-dealers who
Participating in assist in the Exchange Offering, consisting of
Exchange Offer a number of unregistered Common Shares equal
to 5% of Units exchanged in the Exchange
Offering.
The total operating expenses (less certain items, including capital raising
expenses, interest payments, taxes, non-cash expenditures such as depreciation,
and acquisition fees and expenses) of each of the Trust and the Operating
Partnership in any fiscal year may not exceed the greater of (i) 2% of the
aggregate book value of their respective investments, or (ii) 25% of their
respective net income for such year unless the Independent Trustees make a
finding that, based on such unusual and non-recurring factors which they deem
sufficient, a higher level of such operating expenses is justified for such
year. (See the fourth bullet point on page 88 of the Prospectus and Section
1.9(i) of the Declaration, as amended hereby.)
5. The "Compensation of the Managing Shareholder and Affiliates" section of the
Prospectus is hereby amended by adding the following after the second paragraph
under such section on page 23:
"The Independent Trustees must determine that organizational and offering
expenses payable by the Trust and the Operating Partnership in connection
with the formation of the Trust and the Operating Partnership and any
offerings of Shares or Units is reasonable and in no event exceeds an
amount equal to 15% of the gross proceeds of the particular offering. (See
Section 1.9(g) of the Declaration, as amended hereby.)
The Independent Trustees must determine that the total amount of
acquisition fees and expenses payable by the Trust or the Operating
Partnership in connection with acquiring its investments is reasonable and
in no event exceeds an amount equal to 6% of the purchase price of the
subject property, or in the case of a mortgage loan made or acquired by the
Trust or the Operating Partnership, 6% of the funds advanced, unless a
majority of the disinterested members of the Board and a majority of the
disinterested Independent Trustees approve payment of an acquisition fee in
excess of such amounts based upon their determination that such fee is
commercially competitive, fair and reasonable to the Trust and the
Operating Partnership. (See Section 1.9(h) of the Declaration, as amended
hereby.)
The total operating expenses (less certain items, including capital raising
expenses, interest payments, taxes, non-cash expenditures such as
depreciation, and acquisition fees and expenses) of each of the Trust and
the Operating Partnership in any fiscal year may not exceed the greater of
(i) 2% of the aggregate book value of their respective investments, or (ii)
25% of their respective net income for such year unless the Independent
Trustees make a finding that, based on such
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<PAGE>
unusual and non-recurring factors which they deem sufficient, a higher
level of such operating expenses is justified for such year. (See the
fourth bullet point on page 88 of the Prospectus and Section 1.9(i) of the
Declaration, as amended hereby.)
The payment by the Trust and the Operating Partnership of an interest in
the gain from the sale of their respective assets, for which full
consideration is not paid in cash or property of equivalent value, is
allowed provided the amount or percentage of such interest is reasonable.
Such an interest is considered reasonable if it does not exceed 15% of the
balance of such net proceeds remaining after payment to Shareholders or
Unitholders (as applicable), in the aggregate, of an amount equal to 100%
of the original issue price of their Shares or Units, plus an amount equal
to 6% of the original issue price of their Shares or Units, per annum
cumulative. For purposes of this calculation, the original issue price of
Shares and Units may be reduced by prior cash distributions to Shareholders
and Unitholders, as applicable. (See Section 1.9(ee) of the Declaration.)
Additional fees that are not described in this Prospectus which may become
payable to affiliated parties for goods and services that may be provided
to the Trust or the Operating Partnership in the future will require the
approval of a majority of the Independent Trustees."
6. The "Compensation of the Managing Shareholder and Affiliates" section of the
Prospectus is hereby amended by adding at the end of page 24 the following
information regarding compensation payable to members of management of the
Trust:
<TABLE>
<CAPTION>
Type of
Recipient Compensation Maximum Amount
--------- ------------ --------------
<S> <C> <C>
Gregory K. McGrath, a founder Initial annual To be paid in the form of Common Shares or other securities in an
of the Trust and the compensation amount not to exceed 25,000 shares to be determined by the
Operating Partnership and Executive Compensation Committee of the Board, plus health
Chief Executive Officer of benefits; thereafter, his compensation and benefits will be
the Trust, the Operating determined by the committee. In exchange for an initial capital
Partnership and the Managing contribution to the Operating Partnership and other
Shareholder consideration, Mr. McGrath has been issued Units which are
exchangeable (subject to certain escrow restrictions) into 9.5%
of the Common Shares outstanding after the completion of the
Offering and the proposed Exchange Offering, on a fully diluted
basis assuming that all then outstanding Units (other than those
owned by the Trust) have been exchanged into an equivalent number
of Common Shares. See "The Trust - Formation Transactions."
Robert S. Geiger, a founder Initial annual $100,000, plus health benefits and eligibility to participate in
of the Trust and the compensation any option plan and bonus incentive plan which may be implemented
Operating Partnership and by the Executive Compensation Committee. In exchange for an
Chief Operating Officer of initial capital contribution to the Operating Partnership and
the Trust, the Operating other consideration, Mr. Geiger has been issued Units which are
Partnership and the Managing exchangeable (subject to certain escrow restrictions) into 9.5%
Shareholder of the Common Shares outstanding after the completion of the
Offering and the proposed
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C>
Exchange Offering, on a fully diluted basis assuming that all
then outstanding Units (other than those owned by the Trust) have
been exchanged into an equivalent number of Common Shares. See
"The Trust - Formation Transactions."
Robert L. Astorino, President Initial annual $150,000, plus health benefits and eligibility to participate in
- - Properties of the Operating salary any option plan and bonus incentive plan which may be implemented
Partnership by the Executive Compensation Committee.
David E. Williams, Chief Initial annual $150,000, plus health benefits and eligibility to participate in
Financial Officer of the salary any option plan and bonus incentive plan which may be implemented
Operating Partnership by the Executive Compensation Committee.
Mary E. Keane, Vice President Initial annual $130,000, plus health benefits and eligibility to participate in
- - Accounting and Strategic salary any option plan and bonus incentive plan which may be implemented
Planning of the Operating by the Executive Compensation Committee.
Partnership and Secretary of
the Trust
Independent Trustees Annual fee $6,000
</TABLE>
7. The "Compensation of the Managing Shareholder and Affiliates" section of the
Prospectus is hereby amended by deleting on page 25 the second and third
compensation items to reflect the elimination of property management fees and
fees payable by property interest sellers. To conform, (i) the text of Section
4.4 of the Declaration is hereby deleted and the following substituted therefor:
"[intentionally omitted]" and (ii) Section 4.5(b) of the Declaration is hereby
amended by deleting the last two sentences.
8. See item 34 below for additional amendments made to the compensation table in
the "Compensation of the Managing Shareholder and Affiliates" section of the
Prospectus to reflect the elimination of the right of the Managing Shareholder
to receive certain non-accountable fees in connection with the Offering and the
formation and operations of the Trust and the Operating Partnership and the
substitution in place of such fees of the right to be reimbursed for certain
out-of-pocket expenses formerly covered by such fees.
9. The Declaration is hereby amended by deleting Section 1.8(j) relating to
powers of the Trust and substituting the following therefor:
"1.8(j). To waive the payment of all or a part of a commission by one or
more investors in connection with offerings of the Trust's securities, in
which case the cost of such securities acquired by such investors will be
less than the cost of equivalent securities to an investor paying a
commission, provided, however, the Trust will exercise such waiver right on
a case by case basis according to the facts and circumstances involved."
To conform, the Prospectus is hereby amended by deleting the fourth
sentence in Footnote 1 on page 19 and substituting the following therefor:
"The Trust reserves the right to waive the payment of all or a part of a
commission by one or more Investors, in which case the cost of the Common
Shares acquired by such Investors will be less than the cost of equivalent
Common Shares to an Investor paying a commission, provided,
6
<PAGE>
however, the Trust will exercise such waiver right on a case by case basis
according to the facts and circumstances involved."
10. The Declaration and the Operating Partnership Agreement are hereby amended
by adding the following provision to the end of Section 1.9(f) and Section
7.4(b), respectively:
"Duplicate payment of fees and expenses of the Trust and Operating
Partnership shall be prohibited."
11. The first sentence of Section 1.9(g) of the Declaration is hereby amended by
deleting the parenthetical "(including the distribution, due diligence and
organizational fee specified in Section 4.2 of this Declaration)" and
substituting therefor "(including the reimbursable distribution, due diligence
and organizational expenses specified in Section 4.2 of this Declaration)". The
second sentence of Section 1.9(g) is also amended to include the phrase
"warrants to acquire Common Shares issued to the Dealer Manager as additional
compensation for effecting sales of Common Shares in the Offering (which
warrants, for purposes of the limitation set forth in this Section 1.9(g) of
this Declaration, will be valued in accordance with the Statement of Policy
Regarding Underwriters Warrants issued by the North American Securities
Administrators Association, Inc.)," in the definition of "Organization and
Offering Expenses" therein. As a result, Section 1.9(g) now reads as follows:
" The Independent Trustees shall determine that the Organization and
Offering Expenses (as defined below) (including the reimbursable
distribution, due diligence and organizational expenses specified in
Section 4.2 of this Declaration) payable by the Trust and the Operating
Partnership in connection with the formation of the Trust and the Operating
Partnership and any offerings of Shares or Units is reasonable and in no
event exceeds an amount equal to 15% of the gross proceeds of the
particular offering. For purposes of this Declaration, the term
"Organization and Offering Expenses" means all expenses incurred by and to
be paid from the assets of the Trust and the Operating Partnership in
connection with and in preparing the Trust and the Operating Partnership
for registration and subsequently offering and distributing Shares and
Units to the public, including, but not limited to, total underwriting and
brokerage discounts and commissions (including any fees of the
underwriters' attorneys payable by the Trust or the Operating Partnership),
warrants to acquire Common Shares issued to the Dealer Manager as
additional compensation for effecting sales of Common Shares in the Initial
Offering (which warrants, for purposes of the limitation set forth in this
Section 1.9(g) of this Declaration, will be valued in accordance with the
Statement of Policy Regarding Underwriters Warrants issued by the North
American Securities Administrators Association, Inc.), expenses for
printing, engraving, mailing, salaries of employees while engaged in sales
activity, charges of transfer agents, registrars, trustees, escrow holders,
depositaries, experts, expenses of qualification of the sale of the
securities under Federal and State laws, including taxes and fees,
accountants' and attorneys' fees."
12. The first sentence of Section 1.9(h) is hereby amended by (i) deleting the
phrase "the total amount of any Acquisition Fee (including the investment fee
specified in Section 4.3 of this Declaration) and Acquisition Expenses (as such
terms are defined below)" and substituting therefor "the total amount of any
Acquisition Fee and Acquisition Expense (as such terms are defined below and
including without limitation the Managing Shareholder's reimbursable expenses
incurred prior to and during the Initial Offering for investigating, evaluating
and consummating investments of the Trust and the Operating Partnership as
specified in Section 4.3 of this Declaration)" and (ii) adding the phrase
"(including the amount actually paid or allocated to the purchase, development,
construction or improvement of a property, exclusive of Acquisition Fees and
Acquisition Expenses)" after the phrase "purchase price of the subject
property". As a result, the first sentence of Section 1.9(h) now reads as
follows:
"The Independent Trustees shall determine that the total amount of any
Acquisition Fee and Acquisition Expense (as such terms are defined below
and including without limitation the
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<PAGE>
Managing Shareholder's reimbursable expenses incurred prior to and during
the Initial Offering for investigating, evaluating and consummating
investments of the Trust and the Operating Partnership as specified in
Section 4.3 of this Declaration) payable by the Trust or the Operating
Partnership is reasonable and in no event exceeds an amount equal to six
percent of the purchase price of the subject property (including the amount
actually paid or allocated to the purchase, development, construction or
improvement of a property, exclusive of Acquisition Fees and Acquisition
Expenses), or in the case of a mortgage loan made or acquired by the Trust
or the Operating Partnership, six percent of the funds advanced, unless a
majority of the "disinterested" members of the Board and a majority of the
"disinterested" Independent Trustees approve payment of an Acquisition Fee
in excess of such amounts based upon their determination that such excess
fee is commercially competitive, fair and reasonable to the Trust and the
Operating Partnership."
In addition, the third line of the third bullet point on page 88 of the
Prospectus is hereby amended by adding the phrase "(including the amount
actually paid or allocated to the purchase, development, construction or
improvement of a property, exclusive of Acquisition Fees and Acquisition
Expenses)" after the phrase "purchase price of the subject property".
13. The Declaration is hereby amended by deleting the second and third sentences
of the first paragraph of Section 1.9(i) of the Declaration and substituting the
following therefor:
"Within 60 days after the end of each fiscal quarter for which the Trust or
the Operating Partnership incurs Total Operating Expenses for the 12 months
then ended in excess of such amount, the Trust shall send to the
Shareholders and Unitholders written disclosure of such fact, together with
an explanation of the factors the Independent Trustees considered in
arriving at their finding that such higher operating expenses were
justified. If the Independent Trustees do not determine such excess
expenses are justified, the Managing Shareholder shall reimburse the Trust
or the Operating Partnership, as the case may be, at the end of such
12-month period the amount by which the Total Operating Expenses paid or
incurred by the Trust or the Operating Partnership, respectively, exceed
the limitations herein provided."
14. Section 1.9(j) of the Declaration is hereby amended to add the phrase ", in
the case of the sale of Trust property," immediately prior to the phrase "in no
event" and immediately prior to the phrase "the amount of such commissions". As
a result, Section 1.9(j) of the Declaration now reads as follows:
"1.9(j) A majority of the Independent Trustees shall determine that the
conditions set forth in Section 4.5(b) for payment to the Managing
Shareholder, a Trustee, or any of their respective Affiliates of real
estate commissions on purchase or sale of a Trust or Operating Partnership
Property have been fully satisfied, that any such commission payable does
not exceed a real estate commission which is reasonable, customary and
competitive in light of the size, type and location of such property and,
in the case of the sale of Trust property, in no event exceeds three
percent of the sale price, and that, in the case of the sale of Trust
property, the amount of such commissions payable when added to the
commissions payable to unaffiliated real estate brokers does not exceed the
lesser of such competitive real estate commission or an amount equal to six
percent of the sale price."
15. The Declaration is hereby amended by deleting Section 1.9(aa) and
substituting the following therefor:
"1.9(aa) The Trust and the Operating Partnership may not issue
redeemable equity securities, provided, however, the Operating
Partnership may issue Units which by their terms are exchangeable into
Common Shares of the Trust."
8
<PAGE>
16. Section 1.9(gg) of the Declaration is hereby amended by adding the phrase
"(including without limitation Section 1.9(m) of this Declaration of Trust)"
after the word "documents" and by adding at the end of such section the words
"with the approval of a majority of the Independent Trustees." As a result,
Section 1.9(gg) of the Declaration now reads as follows:
"1.9(gg) No properties or assets held by the Trust may be acquired for the
account of the Managing Shareholder or any affiliated person, regardless of
whether the proposed price equals or is greater than the appraised value of
such properties or assets, provided, however, if a particular property or
asset is in distress, or is a debt obligation of an insolvent obligor, or
otherwise has substantially lost its value, the Managing Shareholder, if
permitted by law, its organizational documents (including without
limitation Section 1.9(m) of this Declaration of Trust) and the Statement
of Policy Regarding Real Estate Investment Trusts issued by the North
American Securities Administrators Association, Inc. may acquire such
property or assets from the Trust at the full unliquidated cost to the
Trust with the approval of a majority of the Independent Trustees."
17. Section 2.1(c) of the Declaration is hereby amended to provide that (i) the
Managing Shareholder will be authorized to issue Preferred Shares only upon
approval of either Shareholders of the Trust holding a majority of the then
outstanding Shares entitled to vote upon such matter or a majority of the
disinterested Independent Trustees and (ii) the voting rights of each Preferred
Share which may be so issued may not exceed one vote per share. As a result, the
second sentence of Section 2.1(c) of the Declaration now reads as follows:
"2.1(c) The Managing Shareholder is authorized to issue from the authorized
but unissued Shares of the Trust, additional Common Shares as well as
Preferred Shares in one or more series and to establish from time to time
the number of Preferred Shares to be included in each such series and to
fix the designations and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications,
and terms and conditions of redemption of the shares of each series,
provided, however, (i) the Managing Shareholder will be authorized to issue
Preferred Shares only upon approval of either Shareholders of the Trust
holding a majority of the then outstanding Shares entitled to vote upon
such matter or a majority of the disinterested Independent Trustees and
(ii) the voting rights for each Preferred Share that may be so issued may
not exceed one vote per share."
18. Section 6.4(b) of the Declaration is hereby amended by deleting the
following phrase therefrom: "stating a proper Trust purpose".
19. The Declaration is hereby amended by adding the following to Section 6.4(c)
and by deleting the first and third sentences of Section 6.4(d) and the first
sentence of Section 6.4(g):
"The purposes for which a Shareholder may request a copy of the Shareholder
List include, without limitation, matters relating to Shareholders' voting
rights under the Declaration and the exercise of Shareholders' rights under
federal securities laws relating to proxies. If the Managing Shareholder,
the Independent Trustees or any other member of the Board of the Trust
neglects or refuses to exhibit, produce or mail a copy of the Shareholder
List as requested, such party or parties shall be liable to any Shareholder
requesting the list for the costs, including attorneys' fees, incurred by
that Shareholder for compelling the production of the list and for actual
damages suffered by any Shareholder by reason of such neglect or refusal.
It shall be a defense from any such liability that the actual purpose and
reason for the requests for inspection or for a copy of the list is to
secure such list or other information for the purpose of selling such list
or of using them for a commercial purpose other than in the interest of the
requesting Shareholder in his capacity as a Shareholder relative to the
affairs of the Trust or the Operating Partnership. As a condition to the
release of the Shareholder List, the Trust may require the requesting
Shareholder to represent that the list is not requested for a commercial
purpose unrelated to the Shareholder's interest in the
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<PAGE>
Trust. The remedies provided in this provision to Shareholders requesting
copies of the list are in addition to, and shall not in any way limit,
other remedies available to Shareholders under federal law or the laws of
any state."
20. Sections 6.6(b) and 7.3(b) of the Declaration have been amended to clarify
that the required Shareholder vote referred to in such sections is the vote of
Shareholders holding a majority of the then outstanding Shares. Each section has
been amended to add the phrase "(as such term is defined in Article 10 of this
Declaration)" after the word "Majority" therein. As a result, Section 6.6(b) of
the Declaration now reads as follows:
"6.6(b) In addition to any other actions of the Trust requiring the
approval of Shareholders under this Declaration (including without
limitation Section 7.3(b)), a Majority (as such term is defined in Article
10 of the Declaration) of the Shareholders present in person or by proxy at
an annual meeting at which a quorum is present, may, without the necessity
for concurrence by the Board, vote to amend this Declaration, terminate the
Trust, and elect and/or remove one or more members of the Board."
In addition, Section 7.3(b) of the Declaration now reads as follows:
"7.3(b) The Managing Shareholder shall not cause the Trust to take any of
the following actions without the approval of a Majority (as such term is
defined in Article 10 of the Declaration) of the Shareholders given at a
duly convened Shareholders' meeting at which a quorum is present or by
written consent:
(i) Amend this Declaration except as otherwise specified in this
Declaration and except for amendments which do not adversely affect the
rights, preferences and privileges of Shareholders, including amendments to
provisions relating to qualifications of the Trustees and members of the
Board, fiduciary duty, liability and indemnification, conflicts of
interest, investment policies or investment restrictions.
(ii) Sell, exchange, lease, mortgage, pledge or transfer all or
substantially all of the Trust's assets if not in the ordinary course of
operation of Trust Property or in connection with liquidation and
dissolution.
(iii) Merge or otherwise reorganize the Trust.
(iv) Dissolve or liquidate the Trust, other than before its initial
investment in property."
21. Section 6.6(c) of the Declaration is hereby amended by adding the following
to the end thereof to clarify that in determining the requisite percentage in
interest of Shares necessary to approve the removal of any member of the Board
of the Trust, any Shares owned by the Managing Shareholder, the Trustees, other
members of the Board, the Original Investors and any of their respective
affiliates may not be included:
"In determining the requisite percentage in interest of Shares necessary to
approve a matter on which the foregoing may not vote, any Shares owned by
any of them will not be included."
22. The third sentence of Section 7.6(d) of the Declaration (stated below) is
hereby deleted:
"No compensation for consulting services shall be paid to the Independent
Trustees or such other members of the Board without prior Board approval."
10
<PAGE>
The Prospectus has been amended to conform to such amendment to the
Declaration by deleting the second full sentence (stated below) on page 59 of
the Prospectus:
"Without prior approval of the Compensation Committee of the Board, the
Trust may not pay compensation to any Independent Trustee or other member
of the Board for consulting services provided to the Trust."
23. Section 9.6(a)(1) of the Declaration, which permits the Managing Shareholder
to unilaterally amend the Declaration, if necessary, to conform the Declaration
to the description in the Prospectus, is hereby amended by deleting the
following phrase therefrom, and Sections 9.6(a)(2) and (3) are hereby deleted.
In addition, Sections 9.6(a)(4) and (5) are hereby renumbered as Sections
9.6(a)(2) and (3).
"to cure any ambiguity, formal defect or omission or to correct or
supplement any provision herein that may be inconsistent with any other
provision contained herein or in the Prospectus or".
To conform, the Prospectus is hereby amended by deleting the first
paragraph under "Amendments and Voting Rights" on page 93 and substituting the
following therefor:
"The Managing Shareholder may amend the Declaration without notice to or
approval of the Investors for the following purposes: to maintain the
federal income tax status of the Trust as a REIT (unless the Managing
Shareholder determines that it is in the best interests of the Shareholders
to disqualify the Trust's REIT status and a majority of Common Shares
entitled to vote approve such determination); or to comply with law. (See
Section 9.6(a) of the Declaration.)"
The Prospectus is also amended by (a) deleting subparts (4)(i) through (iv)
of the first paragraph under "Meetings and Voting Rights" on page 95, and (b)
renumbering subparts (4)(v) and (vi) as subparts (4)(i) and (ii), respectively.
24. The Prospectus is hereby amended by deleting the second full paragraph on
page 56 and substituting the following therefor to reflect the relocation of
Robert S. Geiger, one of the founders of the Trust and the Operating Partnership
and Chief Operating Officer of the Trust, the Operating Partnership and the
Managing Shareholder:
"Robert S. Geiger, age 47, is one of the founders of the Trust and the
Operating Partnership and serves as the Chief Operating Officer of the
Trust, the Operating Partnership and the Managing Shareholder. Since August
1, 1998, Mr. Geiger has been counsel with Atlas, Pearlman, Trop & Borkson
P.A., a Fort Lauderdale, Florida law firm which has a general practice.
Between 1986 and July 1998, Mr. Geiger was managing director of the law
firm of Geiger Kasdin Heller Kuperstein Chames & Weil, P.A., a Miami,
Florida law firm which had a general practice, and its predecessor firms.
Mr. Geiger's practice is concentrated in complex commercial and real
property transactions and litigation, financings and business and banking
law. He has served as general counsel for national, regional and small
business corporations engaged in a wide range of business activities,
including regulated industry matters. Mr. Geiger's firms have performed and
his current firm is expected to continue to perform legal services for the
Trust and Affiliates of the Managing Shareholder. Compensation received by
the firms for such services has not represented a material portion of the
revenues of the firms. Mr. Geiger will continue in his current law practice
after the Offering. Prior to 1986, Mr. Geiger practiced law at private law
firms. Mr. Geiger is a member of the Panel of Arbitrators, American
Arbitration Association, Dade County and American Bar Associations, The
Florida Bar (member, Corporation, Business and Banking Law), and the
International Bar Association. Mr. Geiger earned a law degree from the
University of Florida in 1974 and a Bachelor of Arts degree from Hobart
College in 1972. Mr. Geiger maintains an "av" rating, the highest
recognized by the Martindale-Hubbell directory of American lawyers."
11
<PAGE>
25. The Prospectus is hereby amended by deleting the entire "Officers of the
Trust" section beginning on page 57 and substituting the following therefor. The
amended section includes a description of three individuals, Robert L. Astorino,
David E. Williams and Mary E. Keane, who recently joined the Operating
Partnership to serve as President - Property, Chief Financial Officer, and Vice
President - Accounting and Strategic Planning, respectively. Messrs. Astorino
and Williams have significant experience in the management and operation of
residential apartment properties, and Ms. Keane has significant experience in
financial preparation, reporting and analysis with large publicly traded
companies.
"Officers of the Trust and the Operating Partnership
The Declaration provides that the Managing Shareholder will appoint
officers of the Trust who may act on behalf of the Trust and sign documents
on behalf of the Trust as authorized by the Managing Shareholder and who
will have the duties and powers usually applicable to similar officers of a
Delaware corporation in carrying out Trust business. Officers act under the
supervision and control of the Managing Shareholder, which can remove any
officer at any time for any or no reason. Unless otherwise specified by the
Managing Shareholder, the Chief Executive Officer of the Trust will have
full power to act on behalf of the Trust. Gregory K. McGrath, a founder of
the Trust and the Operating Partnership, serves as Chief Executive Officer
of the Trust, the Operating Partnership and the Managing Shareholder. He
has agreed to serve as Chief Executive Officer for the first year in
exchange for compensation in the form of Common Shares in an amount not to
exceed 25,000 shares to be determined by the Executive Compensation
Committee based upon his performance.
Robert S. Geiger, the other founder of the Trust and the Operating
Partnership, serves as the Chief Operating Officer of the Trust, the
Operating Partnership and the Managing Shareholder. His initial annual
salary has been set at $100,000 (in addition to benefits, including without
limitation health, disability and life insurance, and eligibility for
participation in any Common Share option plan and bonus incentive
compensation plan which may be implemented by the Trust).
Officers and employees of the Managing Shareholder who perform services on
behalf of the Trust will not be paid any additional compensation by the
Trust. Such officers and employees may serve in the same capacity for the
Trust and will be compensated by the Trust in amounts determined by the
Managing Shareholder, in the case of employees, and by the Executive
Compensation Committee described below, in the case of officers.
Information concerning Mr. McGrath and Mr. Geiger is set forth above at " -
Managing Shareholder." Information concerning the other executive officers
of the Operating Partnership is set forth below.
Robert L. Astorino, age 52, has served as President - Property of the
Operating Partnership since May 25, 1998. From February 1998 through May
25, 1998, he served as President - Property of Strategic Management Inc., a
real estate management company affiliated with Mr. McGrath. From 1992
through January 1998, he served as President of The Housing Partnership,
Inc., a Louisville, Kentucky-based real estate investment and consulting
company. Between 1991 and 1992, Mr. Astorino served as Assistant Vice
President, Real Estate Operations at Great Western Bank in Beverly Hills,
California, where his responsibilities included the operation and sale of
residential and commercial real estate obtained in foreclosure. Between
1986 and 1991, Mr. Astorino was employed by Lexford, Inc. ("Lexford")
(formerly Cardinal Realty Services, Inc. and prior to that Cardinal
Industries, Inc.), where he served first as the Regional Director of
Apartment Management and then as the Vice President of Operations. Lexford
is a publicly traded company headquartered in Reynoldsburg, Ohio which has
sponsored numerous real estate investment limited partnerships. Prior to
1986, Mr. Astorino was employed by National Housing Partnership in
Washington, D.C. where he served as an Executive Vice President of NCHP
Property
12
<PAGE>
Management and then as Vice President of Property Management. He has also
served as a Director of the Housing Authority of Louisville and in various
positions for other municipal and rural real estate development programs.
Mr. Astorino is a member of the Kentucky Bar Association, the National
Association of Realtors and the National Association of Homebuilders. He is
also a member of the Kentucky Housing Association, where he served as
president in 1982 and as a legislative chairman in 1980, 1981 and 1983, and
is a member of Louisville Housing Services, where he served on the Board of
Directors from 1984 through 1988. Mr. Astorino received a law degree from
the University of Louisville, a Masters degree in Public Administration
from Syracuse University and an undergraduate degree from the University of
Massachusetts, Amherst. He has also completed the Senior Public Executive
Program at Harvard University.
Mr. Astorino's initial annual salary has been set at $150,000, in addition
to benefits, including without limitation health, disability and life
insurance, and eligibility to participate in any option plan and bonus
incentive plan which may be implemented by the Executive Compensation
Committee.
David E. Williams, age 51, has served as Chief Financial Officer of the
Operating Partnership since May 25, 1998. From January 1998 through May 25,
1998, he served as Chief Financial Officer of Strategic Management Inc., a
real estate management company affiliated with Mr. McGrath. From January
1996 through December 1997, Mr. Williams served as President of The
Williams Consulting Group in Cincinnati, Ohio, where he provided real
estate consulting services, including strategic planning and property
analysis. From 1991 to 1996, he served as Vice President and then Executive
Vice President, Real Estate Management for Lexford, Inc. ("Lexford")
(formerly Cardinal Realty Services, Inc. and prior to that Cardinal
Industries, Inc.). Lexford is a publicly traded company headquartered in
Reynoldsburg, Ohio which has sponsored numerous real estate investment
limited partnerships. At Lexford, Mr. Williams was responsible for the
management of real estate valued in excess of $1.5 billion. Between 1986
and 1990, he was employed by Cardinal Apartment Management Group, Inc.,
where he served as Executive Vice President, Chief Financial Officer -
Partnerships in 1990 and as a Regional Director from 1986 through 1989.
Prior to 1986, he held various property management positions. Mr. Williams
has served in various capacities in The United States Air Force, Strategic
Air Command. He currently serves on the Board of the Institute of Real
Estate Management. Mr. Williams received his undergraduate degree from the
University of Cincinnati.
Mr. Williams' initial annual salary has been set at $150,000, in addition
to benefits, including without limitation health, disability and life
insurance, and eligibility to participate in any option plan and bonus
incentive plan which may be implemented by the Executive Compensation
Committee.
Mary E. Keane, age 45, has served as Vice President - Accounting and
Strategic Planning for the Operating Partnership since May 25, 1998. She
has also served as Secretary of the Trust since May 15, 1998. From March
1998 through May 25, 1998, she served as Vice President - Accounting for
Strategic Management Inc., a real estate management company affiliated with
Mr. McGrath. From 1996 through February 1998, Ms. Keane served as Vice
President, Finance - Consumer Services Division for Blue Cross of
California, a subsidiary of WellPoint Health Networks, Inc., a Fortune 250
company. Her responsibilities there included financial preparation,
reporting and analysis for a $2 billion annual revenue company. From 1992
through 1995, she served as Chief Financial Officer for Steptoe & Johnson,
a prominent international law firm headquartered in Washington, D.C. From
1988 through 1992, Ms. Keane served as Assistant Corporate Controller for
Commodore International, Limited, at the time a $1 billion Canadian company
which manufactured and marketed personal computers. Prior to that, she was
a business analyst for Johnson Matthey, PLC, a British precious metals
company, and a senior accountant for Mobil Oil Corporation, an
international energy company. Ms. Keane received a Bachelor of
13
<PAGE>
Science degree from Boston College and a Masters of Business Administration
degree from the Wharton School at the University of Pennsylvania. She is
also a certified accountant.
Ms. Keane's initial annual salary has been set at $130,000, in addition to
benefits, including without limitation health, disability and life
insurance, and eligibility to participate in any option plan and bonus
incentive plan which may be implemented by the Executive Compensation
Committee."
26. The Prospectus is hereby amended to delete the second and third full
paragraphs on page 64 and substitute the following therefor:
"In connection with the formation of the Trust and the Operating
Partnership, Mr. McGrath and Mr. Geiger (the Chief Operating Officer of the
Trust, the Operating Partnership and the Managing Shareholder) have each
been issued an amount of Units which are exchangeable (with certain escrow
restrictions described below) into 9.5% of the Common Shares outstanding
after the completion of the Offering and the proposed Exchange Offering, on
a fully diluted basis assuming that all then outstanding Units (other than
those owned by the Trust) have been exchanged into an equivalent number of
Common Shares. Their consideration for the Units included an initial
capital contribution of $100,000 to the Operating Partnership; a waiver of
any ongoing administrative fees currently payable to the corporate general
partners (which Mr. McGrath controls) which manage real estate investment
limited partnerships whose investors participate in the proposed Exchange
Offering; an assignment to the Operating Partnership of any back end
interest attributable to such corporate general partners; and the
advancement to date of approximately $300,000 in formative expenses,
including the support of the activities of the entire staff of an affiliate
of the Managing Shareholder in connection with the Offering and the
proposed Exchange Offering."
27. The Prospectus is hereby amended by deleting the second full paragraph on
page 70 relating to management of properties in which the Trust or the Operating
Partnership acquires an interest and substituting the following therefor:
"The Exchange Partnerships collectively manage the properties in which they
have an interest and share property management expenses. Other properties
in which the Trust and the Operating Partnership acquire an interest will
be similarly managed."
28. The Prospectus is hereby amended by deleting the fifth paragraph on page 74
and substituting the following therefor:
"In June 1998, the Exchange Partnerships and other real estate partnerships
managed by affiliates of the Managing Shareholder entered into an agreement
to terminate property management agreements with the prior property
manager. Since the transaction, the Exchange Partnerships and other
partnerships have managed the properties in which they have an interest and
shared property management expenses. During 1997, the Exchange Partnerships
paid an aggregate of approximately $435,689 in property management fees."
29. The Prospectus is hereby amended by deleting the third sentence of the sixth
paragraph beginning on page 74 and substituting therefor the following:
"The Operating Partnership will not complete the Exchange Offering in
respect of any particular Exchange Partnership if limited partners holding
more than 10% of the limited partnership interests in the partnership
affirmatively elect not to accept the offering. In addition, the Operating
Partnership will not complete any transaction in the offering unless a
sufficient number of offerees accept the offering such that the offering
involves the issuance of at least $6,000,000 of Units.
14
<PAGE>
30. The Prospectus is hereby amended by deleting the last paragraph on page 80
(which carries over onto page 81). The paragraph is no longer accurate because
the Trust does not intend to pay fees to any affiliate or third party to manage
properties in which it acquires an interest.
31. The Prospectus is hereby amended by inserting the following at the end of
the first paragraph on page 101:
"Asset Allocation Securities Corp., Oakbrook Investment Brokers Inc. and
Strategic Assets, Inc., each a member of the NASD, have entered into
selling agreements with the Dealer Manager and will participate in the sale
of Common Shares in connection with the Offering."
32. The Prospectus is hereby amended by deleting the second sentence in the
second full paragraph on page 59 under "Independent Trustees" and substituting
the following therefor:
"The Independent Trustees will nominate replacements for vacancies created
in the authorized number of Independent Trustees prior to the end of a
term."
33. The Declaration is hereby amended as follows to reflect the elimination of
the right of the Managing Shareholder to receive certain non-accountable fees in
connection with the Offering and the formation and operations of the Trust and
the Operating Partnership and to substitute in place of such fees the right to
be reimbursed for certain out-of-pocket expenses formerly covered by such fees:
(i) The second paragraph of Section 1.9(i) is hereby amended by deleting
the phrase "including the Managing Shareholder's (and any successor Advisor's)
fees" and substituting therefor the phrase "including fees and reimbursable
expenses, if any, payable to the Managing Shareholder and any successor Advisor
in accordance with this Declaration".
(ii) Section 4.2 is hereby deleted and the following substituted therefor:
"4.2 Organization and Offering Expenses. (a) The Trust shall be
authorized to reimburse the Managing Shareholder for Organization and
Offering Expenses (as defined in Section 1.9(g)) incurred by it which
conform with Section 1.9(g) in connection with any offering of Shares.
(b) The Trust shall be authorized to reimburse the Managing
Shareholder out of Trust Property for (i) distribution, due diligence and
organizational expenses incurred by it in connection with the formation of
the Trust and the Operating Partnership and with the Initial Offering, in
an amount not to exceed one percent of gross proceeds from the sale of
Common Shares in the Initial Offering and (ii) for legal, accounting and
consulting fees and printing, filing, recording, postage and other
miscellaneous costs incurred in connection with the Offering, in an amount
not to exceed one percent of gross proceeds from the sale of Common Shares
in the Initial Offering. Such reimbursements shall be payable at the same
time that selling commissions are payable. To the extent that the amount of
the expenses described above exceeds the reimbursable amount, those
expenses will be payable by the Managing Shareholder."
(iii) Section 4.3 is hereby deleted and the following substituted therefor:
"4.3 Investment Expenses. The Trust shall be authorized to reimburse
the Managing Shareholder out of Trust Property for expenses incurred prior
to and during the Initial Offering for investigating and evaluating real
estate investment opportunities and effecting transactions for investing
the net sale proceeds of the Initial Offering, in an amount not to exceed
four percent of the gross proceeds from the sale of Common Shares in the
Initial Offering. Such reimbursement is payable from available net proceeds
of the Initial Offering or as cash flow
15
<PAGE>
permits as determined by the Board of the Trust."
(iv) Section 4.5(c) is hereby deleted and the following substituted
therefor:
"(c) The Trust shall be authorized to make an annual payment to the
Managing Shareholder to reimburse it for its operating expenses relating to
the business of the Trust and the Operating Partnership, in an amount up to
one percent of the gross proceeds of the Initial Offering plus one percent
of the initial value of Units issued in the proposed Exchange Offering."
(v) The first sentence of Section 4.6 is hereby amended by deleting the
word "fees" and substituting therefor the word "commissions".
(vi) The last sentence of Section 7.11 is hereby deleted and the following
substituted therefor:
"In the event of any such removal or the death, dissolution, resignation,
insolvency, bankruptcy or other legal incapacity of the Managing
Shareholder or any other event which would legally disqualify the Managing
Shareholder from acting hereunder, the former Managing Shareholder shall
not be entitled to payment for reimbursable expenses specified in Article 4
which are incurred after the date of such removal or other incapacity."
(vii) The Table of Contents of the Declaration is hereby amended by
deleting the heading "Investment Fees" for Section 4.3 and substituting therefor
the heading "Investment Expenses".
34. The Prospectus is hereby amended as follows to conform to the amendments
described in item 33 above made to the Declaration to reflect the elimination of
the right of the Managing Shareholder to receive certain non-accountable fees in
connection with the Offering and the formation and operations of the Trust and
the Operating Partnership and to substitute in place of such fees the right to
be reimbursed for certain out-of-pocket expenses formerly covered by such fees:
(i) The Prospectus is hereby amended by deleting Footnote ** on page 2 and
substituting therefor the following:
"** Before deducting expenses of the Offering payable by the Trust
estimated at approximately $500,000, including reimbursement to the
Managing Shareholder for distribution, due diligence and organizational
expenses incurred in connection with the formation of the Trust and the
Operating Partnership and with the Offering, in an amount not to exceed 1%
of the gross proceeds from the Offering ($250,000 maximum), and
reimbursement to the Managing Shareholder for legal, accounting and
consulting fees, and printing, filing, recording, postage and other
miscellaneous expenses incurred in connection with the Offering, in an
amount not to exceed 1% of the gross proceeds of the Offering ($250,000)."
(ii) The Prospectus is hereby amended by deleting the term "offering fees"
in the following places it appears in the Prospectus and replacing it with the
term "reimbursable offering expenses": (a) the third line in the fourth
paragraph on page 3 and (b) the first bullet point on each of pages 66 and 67.
Similarly, the phrase "commissions, fees, expenses and other costs of the
Offering," in the third sentence of the fourth full paragraph on page 99 is
hereby deleted and the phrase "commissions and reimbursable offering expenses,"
substituted therefor. In addition, the second full paragraph on page 28 is
hereby amended by deleting the words "certain fees and other" in the first
sentence thereof, the words "fees and other" in the second sentence, and the
word "fees," in the fourth sentence.
(iii) The Prospectus is hereby amended by deleting in the first column of
the use of proceeds table on page 18 the captions "Distribution, Due Diligence
and Organizational Fee," "Legal and Consulting Fee," and "Investment Fee" and
substituting therefor the captions "Distribution, Due Diligence and
Organizational Expenses," "Legal and Consulting Expenses," and "Investment
Expenses," respectively.
16
<PAGE>
(iv) The Prospectus is hereby amended by deleting Footnotes 2, 3 and 4 on
page 19 and substituting therefor the following:
2. The Trust will reimburse the Managing Shareholder for distribution,
due diligence and organizational expenses incurred in connection with
the formation of the Trust and the Operating Partnership and with the
Offering in an amount not to exceed 1% of the gross proceeds from
sales of Common Shares in the Offering ($250,000 maximum).
3. The Trust will reimburse the Managing Shareholder for legal,
accounting and consulting fees and printing, filing, recording,
postage and other miscellaneous expenses incurred in connection with
the Offering in an amount not to exceed 1% of gross proceeds from
sales of Common Shares in this Offering ($250,000 maximum). The
reimbursements described in footnote 2 and this footnote 3 will be
payable out of the net proceeds of the Offering. To the extent which
the distribution, due diligence and organizational expenses or the
legal, accounting and consulting fees and printing, filing, recording,
postage and other miscellaneous expenses exceed 1% of the gross
proceeds from the Offering, those expenses will not be reimbursed to
the Managing Shareholder.
4. The Trust will reimburse the Managing Shareholder for expenses
incurred prior to and during the Offering for investigating and
evaluating investment opportunities for the Trust and the Operating
Partnership and for assisting them in consummating their investments,
in an amount not to exceed 4% of the gross proceeds from sales of
Common Shares in this Offering (maximum $1,000,000) (reimbursable
expenses paid in connection with investment activities plus other
acquisition fees and expenses may not exceed 6% of the contract
purchase price for acquisitions unless the Independent Trustees
determine that the transaction is commercially reasonable). Such
reimbursement will be payable from available net proceeds of the
Offering or as cash flow permits as determined by the Board of the
Trust.
(v) The "Compensation of the Managing Shareholder and Affiliates" section
of the Prospectus is hereby amended by deleting on page 23 the first and second
compensation items and substituting therefor the following:
<TABLE>
<CAPTION>
Recipient Type of Compensation Maximum Amount
- --------- -------------------- --------------
<S> <C> <C>
Managing Shareholder Reimbursement for distribution, due diligence and $250,000
(Baron Advisors) organizational expenses incurred in connection
with the formation of the Trust and the Operating
Partnership and with the Offering, in an amount
not to exceed 1% of gross proceeds from Offering
Managing Shareholder Reimbursement for legal, accounting and consulting $250,000
fees, and printing, filing, recording, postage and
other miscellaneous expenses incurred in
connection with the Offering, in an amount not to
exceed 1% of gross proceeds from Offering
</TABLE>
17
<PAGE>
(vi) The "Compensation of the Managing Shareholder and Affiliates" section
of the Prospectus is hereby amended by deleting on page 24 the third
compensation item and substituting therefore the following:
<TABLE>
<CAPTION>
Recipient Type of Compensation Maximum Amount
- --------- -------------------- --------------
<S> <C> <C>
Managing Shareholder Reimbursement for expenses incurred prior $1,000,000 (reimbursable
to and during the Offering for expenses paid in connection with
investigating and evaluating investment investment activities plus other
opportunities for the Trust and the acquisition fees and expenses
Operating Partnership and for assisting may not exceed 6% of the
them in consummating their investments, in contract purchase price for
an amount not to exceed 4% of the gross acquisitions unless the
proceeds from Offering; payable from Independent Trustees determine
available net proceeds of the Offering or that the transaction is
as cash flow permits as determined by the commercially reasonable).
Board of the Trust
</TABLE>
(vii) The "Compensation of the Managing Shareholder and Affiliates" section
of the Prospectus is hereby amended by deleting on page 25 the first
compensation item and substituting therefor the following:
<TABLE>
<CAPTION>
Recipient Type of Compensation Maximum Amount
- --------- -------------------- --------------
<S> <C> <C>
Managing Shareholder Annual payment under the Trust Management $500,000 per year maximum,
Agreement to reimburse for operating payable on a monthly basis
expenses incurred relating to the business during the term of the agreement
of the Trust and the Operating Partnership, beginning June 1, 1998; at its
in an amount up to 1% of gross proceeds of option the Managing Shareholder
the Offering plus 1% of the initial value may elect to be paid in Common
of Units issued in connection with the Shares with an equivalent value.
proposed Exchange Offering
</TABLE>
(viii) The Prospectus is hereby amended by deleting the first three
sentences in the fifth paragraph on page 100 and substituting therefor the
following:
"After the Escrow Date, the Trust's funds, net of selling commissions and
reimbursable offering expenses described in this Prospectus, will be
maintained in the name of the Trust, in one or more separate, segregated
accounts at commercial banks or in interim investments described at
"INVESTMENT OBJECTIVES AND POLICIES." As soon as funds have been released
from the escrow account, they will be used to pay selling commissions and
reimbursable offering expenses. After payment of these commissions and
offering expenses, the remaining funds released from the escrow account
will be contributed to the Operating Partnership to be used to fund
investments or to pay expenses other than those associated with the
Offering, as determined by the Trust in its discretion."
(ix) The Prospectus is hereby amended by deleting the first two full
paragraphs on page 102 and substituting therefor the following:
"The Trust will reimburse the Managing Shareholder for distribution, due
diligence and organizational expenses incurred in connection with the
formation of the Trust and the Operating Partnership and with the Offering,
in an amount not to exceed 1% of the aggregate subscription price paid for
Common Shares in, the Offering. To the extent the distribution, due
diligence and organizational expenses exceed 1% of gross proceeds of the
Offering, those expenses will not be reimbursed. The Trust will also
reimburse the Managing Shareholder for legal, accounting and
18
<PAGE>
consulting fees and printing, filing, recording, postage and other
miscellaneous expenses incurred in connection with the Offering, in an
amount not to exceed 1% of the aggregate subscription price paid for Common
Shares in the Offering. Any such expenses of the Managing Shareholder in
excess of 1% of the aggregate subscription price paid for Common Shares in
the Offering will be paid by the Managing Shareholder. Such reimbursements
will be payable out of the net proceeds of the Offering. See "SUMMARY OF
THE TRUST AND USE OF PROCEEDS - Summary of Use of Proceeds."
In addition, the Trust will reimburse the Managing Shareholder for expenses
incurred prior to and during the Offering for investigating and evaluating
investment opportunities for the Trust and the Operating Partnership and
assisting them in effecting their investments, in an amount not to exceed
4% of the aggregate subscription price paid for Common Shares in the
Offering. Such reimbursements will be payable from available net proceeds
of the Offering or as cash flow permits as determined by the Board of the
Trust."
(x) The Prospectus is hereby amended by deleting the second paragraph on
page 57 and substituting therefor the following. The amendment reflects that the
Managing Shareholder will not be entitled to receive an annual fee for providing
services under the Trust Management Agreement, but rather will be reimbursed up
to a maximum amount for its operating expenses relating to the business of the
Trust and the Operating Partnership.
"The Trust will reimburse the Managing Shareholder on a monthly basis
during the term of the Trust Management Agreement for its operating
expenses relating to the business of the Trust and the Operating
Partnership, in an amount up to 1% of the gross proceeds of the Offering
plus 1% of the initial value of Units issued in connection with the
proposed Exchange Offering (annual maximum $500,000). The Managing
Shareholder in its sole discretion may elect to receive payment for its
services in the form of Common Shares with an equivalent value."
(xi) The Prospectus is hereby amended by deleting the phrase "the
investment fee payable to the Managing Shareholder," in the fourth sentence of
the fourth full paragraph on page 36 and substituting therefor the phrase "to
reimburse the Managing Shareholder for reimbursable expenses incurred prior to
and during the Offering for investigating, evaluating and consummating
investments of the Trust and the Operating Partnership."
INVESTMENTS
Heatherwood Apartments
On June 30, 1998, the Operating Partnership acquired the entire limited
partnership interest in Heatherwood Kissimmee, Ltd., a Florida limited
partnership (the "Heatherwood Partnership") which owns fee simple title to a
67-unit residential apartment property located at 1005 Airport Road in
Kissimmee, Florida 32741 referred to as the Heatherwood Apartments - Phase I
(the "Heatherwood Property"). Set forth below is certain information describing
the property, first mortgage financing to which the property is subject and the
acquisition by the Operating Partnership of beneficial ownership of the
property.
The Heatherwood Property, completed in 1981, consists of 17 studio/ one
bathroom units, 45 one bedroom/ one bathroom units, and five two bedroom/one
bathroom units. The property is situated on approximately 2.26 acres and has
approximately 35,136 square feet of rentable area. The average unit size of the
studio, one bedroom and two bedroom units is approximately 288, 576 and 864
square feet, respectively. The average monthly rental rate as of July 1, 1998
for each type of unit is approximately $379, $439 and $539, respectively, or
$1.31, $.76 and $.62 per square foot, respectively. The units were approximately
97% occupied as of July 1, 1998. The average monthly occupancy rates for 1993,
1994, 1995, 1996 and 1997 were approximately 89%, 91%, 88%, 93% and 97%,
respectively.
19
<PAGE>
The Operating Partnership acquired the entire limited partnership interest
in the Heatherwood Partnership from an unaffiliated third party for a purchase
price of $830,000. The Heatherwood Property is subject to first mortgage
financing with a current principal balance of approximately $1,245,000. The
mortgage is held by GMAC Commercial Mortgage Corp. The maturity date of the
first mortgage loan is December 2004. Assuming no prepayments of principal, the
balance that will be due at maturity is approximately $1,083,553. The monthly
debt service payments are $8,847, or an annual amount of $106,164. The loan
bears a fixed interest rate of 7.625% and amortizes on a 30-year basis. The loan
is prepayable with a prepayment fee equal to 1% of the then outstanding
principal balance.
In March 1998, prior to completion of the acquisition, the property was
appraised by Consortium Appraisal, Inc., an independent appraisal firm in Winter
Park, Florida which estimated the market value of the property at $2,075,000.
The methods employed in appraising the property are discussed in the Prospectus
beginning at page 62. The Trust and the Operating Partnership were not
responsible for the payment of any fees or expenses for the appraisal.
The acquisition was unanimously approved on June 29, 1998 by the Board of
the Trust, whose members are Baron Advisors, Inc., the Managing Shareholder of
the Trust, and James H. Bownas and Peter M. Dickson, who serve as the
Independent Trustees of the Trust.
Crystal Court Apartments
On July 31, 1998, the Operating Partnership acquired the entire limited
partnership interest in Crystal Court Apartments II, Ltd., a Florida limited
partnership (the "Crystal Court Partnership") which owns fee simple title to an
80-unit residential apartment property located in Lakeland, Florida referred to
as Crystal Court Apartments - Phase II (the "Crystal Court Property"). Set forth
below is certain information describing the property, first mortgage financing
to which the property is subject and the acquisition by the Operating
Partnership of beneficial ownership of the property.
The Crystal Court Property, completed in 1986, consists of 20 studio/ one
bathroom units, 54 one bedroom/ one bathroom units, and six two bedroom/one
bathroom units. The property is situated on approximately 6.8 acres and has
approximately 42,048 square feet of rentable area. The average unit size of the
studio, one bedroom and two bedroom units is approximately 288, 576 and 864
square feet, respectively. The average monthly rental rate as of July 1, 1998
for each type of unit is approximately $319, $369 and $455, respectively, or
$1.11, $.64 and $.53 per square foot, respectively. The units were approximately
92% occupied as of July 1, 1998. The average monthly occupancy rates for 1993,
1994, 1995, 1996 and 1997 were approximately 95%, 91%, 91%, 90% and 95%,
respectively.
The Operating Partnership acquired the entire limited partnership interest
in the Crystal Court Partnership from an unaffiliated third party for a purchase
price of $756,293. The Crystal Court Property is subject to first mortgage
financing with a current principal balance of approximately $1,488,000. The
mortgage is held by GMAC Commercial Mortgage Corp. The maturity date of the
first mortgage loan is October 2004. Assuming no prepayments of principal, the
balance that will be due at maturity is approximately $1,366,490. The monthly
debt service payments are $10,404, or an annual amount of $124,808. The loan
bears a fixed interest rate of 7.5% and amortizes on a 30-year basis. The loan
is prepayable with a prepayment fee equal to 1% of the then outstanding
principal balance.
In June 1998, prior to completion of the acquisition, the property was
appraised by Consortium Appraisal, Inc., an independent appraisal firm which
estimated the market value of the property at $2,170,000. The Trust and the
Operating Partnership were not responsible for the payment of any fees and
expenses for the appraisal.
The acquisition was unanimously approved on July 6, 1998 by the Board of
the Trust.
20
<PAGE>
Attached as Exhibit E hereto in respect of each of the Heatherwood Property
and the Crystal Court Property is an audited statement of revenues and certain
expenses for the years ended December 31, 1996 and 1997 and an unaudited
statement of revenues and certain expenses for the five-month period ended May
31, 1998.
Special Limited Partnership Interests
In July 1998, the Operating Partnership made capital contributions in the
range of $8,000 to $14,000 (aggregate amount approximately $200,000) to certain
real estate partnerships managed by affiliates of the Managing Shareholder,
including each of the Exchange Partnerships, which own direct or indirect equity
or debt interests in residential apartment properties. In exchange, the
Operating Partnership received a special non-voting limited partnership interest
in such partnerships. Each partnership interest acquired by the Operating
Partnership is subordinated to the priority economic return of the limited
partners of the respective partnership and is not eligible to participate in the
Exchange Offering.
PROPOSED EXCHANGE OFFERING
As described in the Prospectus, concurrent with this Offering, the
Operating Partnership proposes to make an Exchange Offering using Units to be
registered with the Securities and Exchange Commission and certain states to
acquire interests in residential apartment properties. On June 2, 1998, the
Operating Partnership filed a registration statement with the Commission for
this purpose. The registration statement has not yet been declared effective by
the Commission. In the Exchange Offering, the Operating Partnership will offer
to issue such Units in exchange for limited partnership interests in limited
partnerships which own direct or indirect interests in residential apartment
properties. The Prospectus originally described 11 properties as its initial
acquisition candidates in connection with the offering and set forth information
concerning the properties, mortgage indebtedness secured by the properties and
the 10 real estate limited partnerships managed by an affiliate of the Managing
Shareholder of the Trust which directly or indirectly own the properties.
The Trust has recently expanded its initial acquisition targets to 15
properties. Set forth below in this Supplement is information concerning the 15
properties, mortgage indebtedness secured by the properties and the 15 real
estate limited partnerships which directly or indirectly own the properties.
Each of the partnerships is managed by an affiliate of the Managing Shareholder.
The Prospectus is hereby amended to include such information. Included on the
following pages are two tables which summarize certain information, an amended
Exhibit B to the Prospectus, audited statements of revenue and certain expenses
in respect of the properties not originally included in the Prospectus, and
unaudited statements of revenues and certain expenses in respect of all 15
properties for the five-month period ended May 31, 1998. (For the purposes of
the Prospectus, as amended by this Supplement, such properties are referred to
collectively as the "Exchange Properties" and individually as an "Exchange
Property," such partnerships are referred to collectively as the "Exchange
Partnerships" and individually as an "Exchange Partnership," and the limited
partners of the Exchange Partnerships are referred to collectively as "Exchange
Limited Partners" and individually as an "Exchange Limited Partner.")
The Operating Partnership has determined not to complete the Exchange
Offering in respect of any particular Exchange Partnership if limited partners
holding more than 10% of the limited partnership interests in the partnership
affirmatively elect not to accept the offering. In addition, the Operating
Partnership will not complete any transaction in the offering unless a
sufficient number of offerees accept the offering such that the offering
involves the issuance of Units with an initial value of at least $6,000,000.
The 15 targeted Exchange Properties consist of an aggregate of 880
residential units (comprised of studio, one, two, three and four-bedroom units).
Eleven of the properties are located in Florida, two properties are in Ohio and
one property each in Georgia and Indiana. The Operating Partnership will
21
<PAGE>
attempt to acquire an interest in the properties by offering to acquire all of
the limited partnership interests in the Exchange Partnerships.
For purposes of the Exchange Offering, the 15 Exchange Partnerships have
been valued at $37,055,540. The value is based on an appraisal performed by a
qualified and licensed independent appraisal firm on the property in which each
partnership owns a direct or indirect interest. Each Unit to be offered in the
Exchange Offering has been arbitrarily valued at $10.00, which is the price at
which the Trust is currently offering Common Shares in its Cash Offering. As
described further in the Prospectus, following the completion of the Exchange
Offering, a Unitholder may elect to exchange Units for an equivalent number of
Common Shares. The current book value of the 15 partnerships is approximately
$13,316,000. If the Exchange Offering is fully completed in respect of all 15
Exchange Partnerships (i.e., all limited partners in the Exchange Partnerships
accept the offering), the property interests indirectly acquired will have an
aggregate purchase price of approximately $37,055,540, comprised of Units to be
issued with an initial value of approximately $17,284,457 plus first mortgage
indebtedness of approximately $19,771,083 to which the underlying properties are
subject.
The Trust intends to investigate other investment opportunities to exchange
the balance of the Units to be registered for property interests in other
Exchange Offering transactions, including interests held by unaffiliated parties
and by other limited partnerships managed by affiliates of the Managing
Shareholder. See "PRIOR PERFORMANCE BY AFFILIATES OF MANAGING SHAREHOLDER."
-------------------
This Supplement contains amendments to the Declaration, the Operating
Partnership Agreement and the Prospectus and additional information to be
included in the Prospectus and is subject to and qualified in its entirety by
the risk factors and other provisions of the Declaration and other disclosures
described in the Prospectus and this Supplement.
THIS SUPPLEMENT IS INCOMPLETE WITHOUT THE PROSPECTUS OF THE TRUST DATED MAY
15, 1998. EACH PROSPECTIVE INVESTOR SHOULD REVIEW THIS SUPPLEMENT IN ITS
ENTIRETY IN CONJUNCTION WITH ALL OF THE OTHER PROVISIONS OF THE DECLARATION, THE
OPERATING PARTNERSHIP AGREEMENT AND ALL OTHER DISCLOSURES MADE IN THE
PROSPECTUS.
22
<PAGE>
Partnership Information
Initial Properties - Exchange Offering
The table set forth below summarizes certain information relating to the
initial 15 partnerships in which the Operating Partnership intends to acquire an
interest in connection with the Exchange Offering, including (i) the name of the
partnership, and its general partner, (ii) the name and location of the
properties, (iii) the year each property was completed, (iv) the number of
units, acreage, rentable area, average unit size, average rental rate per unit
and per square feet of rentable area as of July 1, 1998, and (v) the physical
occupancy of each property as of July 1, 1998.
<TABLE>
<CAPTION>
Approx.
Rentable
Year No. of Approx. Area
Partnership GP Property Location Completed Units Acres (Sq. Ft.)*
- ----------- -- -------- ----------- --------- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Baron Strategic Baron Steeplechase Anderson, 1977 Total 72 3.20 47,280
Investment Fund Capital Apartments Indiana
II, Ltd. XXXI, Inc. 1 BR 12
2 BR 60
Baron Strategic Baron Pine View Orlando, 1988 Total 91 4.38 45,656
Investment Fund Capital Apartments Florida
IV, Ltd. XVII, Inc. Studio 26
1 BR 59
2 BR 6
Central Florida Sigma Grove Hamlet Deland, 1986 Total 56 6.21 45,504
Income Financial Apartments Florida
Appreciation Fund, Capital, 1 BR 10
Ltd. Inc. 2 BR 46
Florida Capital Baron Eagle Lake Port 1987 Total 77 4.68 45,504
Income Fund, Ltd. Capital II, Apartments Orange,
Inc. Florida 1 BR 73
2 BR 4
Florida Capital Baron Forest Glen Daytona 1985 Total 52 6.85 62,692
Income Fund II, Capital IV, Apartments Beach,
Ltd. Inc. (Phase I) Florida 2 BR 28
3 BR 24
Florida Capital Baron Bridge Point Jacksonville, 1986 Total 48 3.39 27,360
Income Fund III, Capital Apartments Florida
Ltd. VII, Inc. (Phase II) Studio 6
1 BR 37
2 BR 5
Florida Capital Baron Glen Lake St. 1986 Total 144 7.16 79,200
Income Fund IV, Capital V, Apartments Petersburg,
Ltd. Inc. Florida 1 BR 144
Florida Income Baron Forest Glen Daytona 1985 Total 26 6.85 29,931
Advantage Fund I, Capital IV, Apartments Beach,
Ltd. Inc. (Phase III) Florida 2 BR 19
3 BR 7
<CAPTION>
Physical
7/1/98 Occupancy
Avg. Unit Size Average Rental Rates/Month As Of
Partnership (Sq. Ft.) (Per Unit) (Per Sq.Ft.) 7/1/98
- ----------- ---------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Baron Strategic Avg. 657 $428 $.65 91%
Investment Fund
II, Ltd. 1 BR 550
2 BR 678
Baron Strategic Avg. 513 $441 $.86 97%
Investment Fund
IV, Ltd. Studio 288
1 BR 576
2 BR 864
Central Florida Avg. 813 $467 $.57 98%
Income
Appreciation Fund, 1 BR 576
Ltd. 2 BR 864
Florida Capital Avg. 591 $448 $.75 100%
Income Fund, Ltd.
1 BR 576
2 BR 864
Florida Capital Avg. 1,205 $655 $.54 94%
Income Fund II,
Ltd. 2 BR 1,075
3 BR 1,358
Florida Capital Avg. 570 $450 $.79 92%
Income Fund III,
Ltd. Studio 288
1 BR 576
2 BR 864
Florida Capital Avg. 550 $674 $1.23 68%
Income Fund IV,
Ltd. 1 BR 550
Florida Income Avg. 1,151 $641 $.56 92%
Advantage Fund I,
Ltd. 2 BR 1,075
3 BR 1,358
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Approx.
Rentable
Year No. of Approx. Area
Partnership GP Property Location Completed Units Acres (Sq. Ft.)*
- ----------- -- -------- ----------- --------- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Florida Income Baron Forest Glen Daytona 1985 Total 8 6.85 9,166
Appreciation Fund Capital IV, Apartments Beach,
I, Ltd. Inc. (Phase IV) Florida 2 BR 6
3 BR 2
Florida Income Baron Blossom Corners Orlando, 1980 Total 70 3.67 39,300
Growth Fund V, Ltd. Capital XI, Apartments Florida
Inc. (Phase I) Studio 15
1 BR 49
2 BR 6
Florida Baron Camellia Court Daytona 1982 Total 60 5.15 34,848
Opportunity Income Capital Apartments Beach,
Partners, Ltd. III, Inc. Florida 1 BR 59
2 BR 1
GSU Stadium Baron Stadium Club Statesboro, 1987 Total 60 3.50 50,736
Student Capital X, Apartments Georgia
Apartments, Ltd. Inc. Studio 2
3 BR 3
4 BR 55
Lamplight Court of Baron Lamplight Court Bellefontaine, 1973 Total 80 6.00 46,944
Bellefontaine Capital IX, Apartments Ohio
Apts., Ltd. Inc. Studio 12
One/One 53
Two/One 15
Midwest Income Sigma Brookwood Way Mansfield, 1974 Total 66 3.92 38,016
Growth Fund VI, Financial Apartments Ohio
Ltd. Capital VI, Studio 3
Inc. 1 BR 60
2 BR 3
Realty Opportunity Baron Forest Glen Daytona 1985 Total 30 6.85 34,231
Income Fund VIII, Capital IV, Apartments Beach,
Ltd. Inc. (Phase II) Florida 2 BR 23
3 BR 7
====== ============= ===========
TOTAL
PROPERTIES: 888 78.66 636,368
====== ============= ===========
<CAPTION>
Physical
7/1/98 Occupancy
Avg. Unit Size Average Rental Rates/Month As Of
Partnership (Sq. Ft.) (Per Unit) (Per Sq.Ft.) 7/1/98
- ----------- ---------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Florida Income Avg. 1,146 $639 $.56 88%
Appreciation Fund
I, Ltd. 2 BR 1,075
3 BR 1,358
Florida Income Avg. 560 $434 $.78 94%
Growth Fund V, Ltd.
Studio 300
1 BR 600
2 BR 900
Florida Avg. 580 $420 $.72 90%
Opportunity Income
Partners, Ltd. 1 BR 576
2 BR 864
GSU Stadium Avg. 860 $853 $.99 82%
Student
Apartments, Ltd. Studio 288
3 BR 880
4 BR 880
Lamplight Court of Avg. 587 $391 $.63 95%
Bellefontaine
Apts., Ltd. Studio 288
One/One 576
Two/One 864
Midwest Income Avg. 576 $359 $.61 97%
Growth Fund VI,
Ltd. Studio 288
1 BR 576
2 BR 864
Realty Opportunity Avg. 1,141 $638 $.56 93%
Income Fund VIII,
Ltd. 2 BR 1,075
3 BR 1,358
========== ======== ============= ============= ===========
766.66 $529 $.74
========== ======== ============= ============= ===========
</TABLE>
- ----------
* Includes only residential apartment units and excludes common areas.
<PAGE>
Mortgage Information
Initial Partnerships - Exchange Offering
The table below sets forth certain information relating to the indebtedness
secured by or associated with the initial 15 partnerships in which the Operating
Partnership intends to acquire an interest in connection with the Exchange
Offering, including (i) name of partnership and its general partner, (ii) the
name and location of the properties, (iii) the principal balances as of May 31,
1998, (iv) the interest rates, (v) the annual debt service, (vi) the
amortization term, (vii) the maturity dates, (viii) the balances due on
maturity, (ix) the monthly payments, and (x) the name of the lending
institution.
<TABLE>
<CAPTION>
5/31/98 Annual
Principal Interest Debt Amortization Maturity
Partnership GP Property Location Balance Rate Service Term Date
- ----------- -- -------- -------- ------- ---- ------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Baron Strategic Baron Capital Steeplechase Anderson, 1,244,892 Yrs. 91,344 30 years 10/1/06
Investment Fund XXXI, Inc. Apartments Indiana 1-2:
II, Ltd. 7.25%
Yrs.
3-4:
7.75%
Yrs.
5-10:
8.25%
Baron Strategic Baron Capital Pine View Orlando, 1,613,028 7.75% 139,272 30 years 11/1/04
Investment Fund XVII, Inc. Apartments Florida
IV, Ltd.
Central Florida Sigma Grove Hamlet Deland, 1,254,807 9.50% 156,024 25 years 6/27/98
Income Financial Apartments Florida
Appreciation Capital, Inc.
Fund, Ltd.
Florida Capital Baron Capital Eagle Lake Port 1,447,811 8.56% 144,636 25 years 11/1/05
Income Fund, Ltd. II, Inc. Apartments Orange,
Florida
Florida Capital Baron Capital Forest Glen Daytona 1,834,103 7.01% 145,920 30 years 3/05
Income Fund II, IV, Inc. Apartments Beach,
Ltd. (Phase I) Florida
Florida Capital Baron Capital Bridge Point Jacksonville, 716,752 9.52% 76,572 25 years 7/1/06
Income Fund III, VII, Inc. Apartments Florida
Ltd. (Phase II)
Florida Capital Baron Capital Glen Lake St. 2,692,623 9.55% 293,700 25 years 5/18/00
Income Fund IV, V, Inc. Apartments Petersburg, 359,016 8.00% 34,728 25 years 5/1/05
Ltd. Florida
Florida Income Baron Capital Forest Glen Daytona 853,557 7.01% 67,908 30 years 3/05
Advantage Fund IV, Inc. Apartments Beach,
I, Ltd. (Phase III) Florida
Florida Income Baron Capital Forest Glen Daytona 236,265 7.01% 18,792 30 years 3/05
Appreciation IV, Inc. Apartments Beach,
Fund I, Ltd. (Phase IV) Florida
<CAPTION>
Balance
Due On Monthly
Partnership Maturity Payment Lender
- ----------- -------- ------- ------
<S> <C> <C> <C>
Baron Strategic 1,099,557 7,612 Crown Bank
Investment Fund
II, Ltd.
Baron Strategic 1,493,008 11,606 GMAC Commercial Mortgage
Investment Fund Grp.
IV, Ltd.
Central Florida 1,314,872 13,002 Midland Loan Services
Income
Appreciation
Fund, Ltd.
Florida Capital 1,244,562 12,053 Column Financial, Inc.
Income Fund, Ltd.
Florida Capital 1,681,926 12,160 Prudential Mortgage
Income Fund II, Capital
Ltd.
Florida Capital 625,327 6,381 Huntington Mortgage Co.
Income Fund III,
Ltd.
Florida Capital 2,652,341 24,475 Republic Bank
Income Fund IV, 343,772 2,894 Glen Lake Arms
Ltd. Joint Venture
Florida Income 782,744 5,659 Prudential Mortgage
Advantage Fund Capital
I, Ltd.
Florida Income 216,712 1,566 Prudential Mortgage
Appreciation Capital
Fund I, Ltd.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
5/31/98 Annual
Principal Interest Debt Amortization Maturity
Partnership GP Property Location Balance Rate Service Term Date
- ----------- -- -------- -------- ------- ---- ------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Florida Income Baron Blossom Corners Orlando, 1,050,000 9.04% 105,288 25 years 11/1/06
Growth Fund V, Capital XI, Apartments Florida
Ltd. Inc. (Phase I)
Florida Baron Capital Camellia Court Daytona 1,082,394 9.04% 111,132 25 years 11/1/06
Opportunity III, Inc. Apartments Beach,
Income Partners, Florida
Ltd.
GSU Stadium Baron Capital Stadium Club Statesboro, 1,740,736 7.87% 151,272 30 years 10/1/05
Student X, Inc. Apartments Georgia
Apartments, Ltd.
Lamplight Court Baron Capital Lamplight Court Bellefontaine 1,376,182 9.04% 135,660 25 years 11/1/06
of Bellefontaine IX, Inc. Ohio
Apts., Ltd.
Midwest Income Sigma Brookwood Way Mansfield, 1,058,868 9.04% 108,612 25 years 12/1/06
Growth Fund VI, Financial Apartments Ohio
Ltd. Capital VI,
Inc.
Realty Baron Capital Forest Glen Daytona 1,070,688 7.01% 85,188 30 years 3/05
Opportunity IV, Inc. Apartments Beach,
Income Fund (Phase II) Florida
VIII, Ltd.
============ =========== =========== ============= ==========
TOTAL
PROPERTIES: $19,631,722 $1,866,048
============ =========== =========== ============= ==========
<CAPTION>
Balance
Due On Monthly
Partnership Maturity Payment Lender
- ----------- -------- ------- ------
<S> <C> <C> <C>
Florida Income $1,030,195 $8,774 Column Financial, Inc.
Growth Fund V,
Ltd.
Florida 984,430 9,261 Column Financial, Inc.
Opportunity
Income Partners,
Ltd.
GSU Stadium 1,615,458 12,606 GMAC
Student
Apartments, Ltd.
Lamplight Court 1,158,349 11,305 Column Financial
of Bellefontaine
Apts., Ltd.
Midwest Income 890,263 9,051 Mellon Bank
Growth Fund VI,
Ltd.
Realty 981,813 7,099 Prudential Mortgage
Opportunity Capital
Income Fund
VIII, Ltd.
============ ========== ==========================
$18,115,329 $155,504
============ ========== ==========================
</TABLE>
<PAGE>
EXHIBIT B
SUMMARY OF EXCHANGE PROPERTY
AND EXCHANGE PARTNERSHIP INFORMATION
<PAGE>
FLORIDA INCOME GROWTH FUND V, LTD.
(GP: Baron Capital XI, Inc.)
===============================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1980
BLOSSOM CORNERS Unrecorded second mortgage
APARTMENTS - PHASE I in the property
2001 Raper Dairy Road
Orlando, Florida 32822
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 3.67
------------- --------- ---------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- ---------------------- -------------------
Studio 15 300 $360
------------- --------- ---------------------- -------------------
1 BR 49 600 $440
------------- --------- ---------------------- -------------------
2 BR 6 900 $540
------------- --------- ---------------------- -------------------
Total 70 39,300
------------- --------- ----------------------
7/1/98 OCCUPANCY %: 94% ESTIMATED APPRAISED VALUE: $2,292,901
1997 AVG. MONTHLY OCCUPANCY %: 91% APPRAISAL DATE: 1/98
1996 AVG. MONTHLY OCCUPANCY %: 89%
1995 AVG. MONTHLY OCCUPANCY %: 90%
1994 AVG. MONTHLY OCCUPANCY %: 91%
1993 AVG. MONTHLY OCCUPANCY %: 84%
===============================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 11/1/06
Column Financial, Inc.
3414 Peachtree Road N.E.
Suite 1140
Atlanta, Georgia 30326-1113
INITIAL PRINCIPAL BALANCE: $1,050,000 ANNUAL DEBT SERVICE: $105,288
5/31/98 BALANCE: $1,030,195 MONTHLY PAYMENT: $ 8,774
BALANCE DUE AT MATURITY: $ 882,430
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 9.04% and amortizes on a 25-year basis.
PREPAYMENT PROVISIONS: Prepayment penalty equal to 1% of prepayment amount if
prepaid prior to fifth anniversary of loan; no prepayment penalty thereafter.
===============================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 10/95 NUMBER OF UNITS SOLD: 2,300
NUMBER OF INVESTORS: 49 PRICE PER UNIT: $500
PAID IN CAPITAL: $1,150,000 DATE OFFERING TERMINATED: 2/97
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive any remaining distributable cash during the fiscal year
less a reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 109 Units Short Term Capital Gain
valued at $10 per Unit (or $1,091) (assuming 20% rate): $155
Long Term Capital Gain
(assuming 39% rate): $ 79
----------------------------------------- -------------------------------------
(See Endnotes)
<PAGE>
FLORIDA CAPITAL INCOME FUND III, LTD.
(GP: Baron Capital VII, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1986
Bridge point Apartments - Limited partnership
PHASE II interest in limited
1500 Monument Road partnership which holds
Suite 1102 fee simple
Jacksonville, Florida 32225
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 3.39
------------- --------- --------------------- ------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- --------------------- ------------------
Studio 6 288 $389
------------- --------- --------------------- ------------------
1 BR 37 576 $439
------------- --------- --------------------- ------------------
2 BR 5 864 $600
------------- --------- ---------------------
Total 48 27,360
------------- --------- ---------------------
7/1/98 OCCUPANCY %: 92% ESTIMATED APPRAISED VALUE: $1,610,000
1997 AVG. MONTHLY OCCUPANCY %: 93% APPRAISAL DATE: 2/98
1996 AVG. MONTHLY OCCUPANCY %: 95%
1995 AVG. MONTHLY OCCUPANCY %: 94%
1994 AVG. MONTHLY OCCUPANCY %: 92%
1993 AVG. MONTHLY OCCUPANCY %: 93%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 7/1/06
Huntington Mortgage Co.
41 South High Street
Suite 900
Columbus, Ohio 43215
INITIAL PRINCIPAL BALANCE: $735,000 ANNUAL DEBT SERVICE: $76,572
5/31/98 BALANCE: $716,752 MONTHLY PAYMENT: $ 6,381
BALANCE DUE AT MATURITY: $625,327
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 9.52% and amortizes on a 25-year basis.
PREPAYMENT PROVISIONS: Prepayment permitted only after 7/1/05.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 6/95 NUMBER OF UNITS SOLD: 1,600
NUMBER OF INVESTORS: 32 PRICE PER UNIT: $500
PAID IN CAPITAL: $800,000 DATE OFFERING TERMINATED: 11/95
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive any remaining distributable cash during the fiscal year
less a reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 111 Units Short Term Capital Gain
valued at $10 per Unit (or $1,106) (assuming 20% rate): $101
Long Term Capital Gain
(assuming 39% rate): $ 52
----------------------------------------- -------------------------------------
(See Endnotes)
<PAGE>
FLORIDA CAPITAL INCOME FUND, LTD.
(GP: Baron Capital II, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1987
Eagle Lake Apartments Limited partnership
1025 Eagle Lake Trail interest in limited
Port Orange, Florida 32119 partnership which holds
fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 4.68
------------- --------- -------------------- --------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- -------------------- --------------------
1 BR 73 576 $439
------------- --------- -------------------- --------------------
2 BR 4 864 $550-555
------------- --------- -------------------- --------------------
Total 77 45,504
------------- --------- --------------------
7/1/98 OCCUPANCY %: 100% ESTIMATED APPRAISED VALUE: $2,650,000
1997 AVG. MONTHLY OCCUPANCY %: 94% APPRAISAL DATE: 1/98
1996 AVG. MONTHLY OCCUPANCY %: 96%
1995 AVG. MONTHLY OCCUPANCY %: 92%
1994 AVG. MONTHLY OCCUPANCY %: 95%
1993 AVG. MONTHLY OCCUPANCY %: 95%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 11/1/05
Column Financial, Inc.
3414 Peachtree Road N.E.
Suite 1140
Atlanta, Georgia 30325-1113
INITIAL PRINCIPAL BALANCE: $1,500,000 ANNUAL DEBT SERVICE: $144,636
5/31/98 BALANCE: $1,447,811 MONTHLY PAYMENT: $ 12,053
BALANCE DUE AT MATURITY: $1,244,562
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 8.56% through maturity and amortizes on a 25-year basis.
PREPAYMENT PROVISIONS: May be prepaid after 10/25/00 with prepayment penalty
equal to 1% of prepayment amount.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 11/94 NUMBER OF UNITS SOLD: 1,614
NUMBER OF INVESTORS: 31 PRICE PER UNIT: $500
PAID IN CAPITAL: $807,000 DATE OFFERING TERMINATED: 6/95
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions. Thereafter, the investors are entitled
to receive all remaining distributable cash during the fiscal year less a
reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return (and, in the
case of a property sale, after the holders of second mortgage financing have
received 10% of the net sale proceeds remaining after the investors have
received an aggregate amount equal to their capital contributions), the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter, investors and the GP share any
remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFFERED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 110 Units Short Term Capital Gain
valued at $10 per Unit (or $1,099) (assuming 20% rate): $216
Long Term Capital Gain
(assuming 39% rate): $111
----------------------------------------- -------------------------------------
(See Endnotes)
<PAGE>
FLORIDA CAPITAL INCOME FUND II, LTD.
(GP: Baron Capital IV, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1985
Forest Glen Apartments - Beneficial interest in
Phase I unrecorded land trust
300 Forest Glen Boulevard
Daytona Beach, Florida
32114
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 6.85
------------- --------- -------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- -------------------- -------------------
2 BR 28 1,075 $619
------------- --------- -------------------- -------------------
3 BR 24 1,358 $699
------------- --------- -------------------- -------------------
Total 52 62,692
------------- --------- --------------------
7/1/98 OCCUPANCY %: 94% ESTIMATED APPRAISED VALUE: $3,008,000
1997 AVG. MONTHLY OCCUPANCY % : 82% APPRAISAL DATE: 11/97
1996 AVG. MONTHLY OCCUPANCY %: 85%
1995 AVG. MONTHLY OCCUPANCY %: 93%
1994 AVG. MONTHLY OCCUPANCY %: 95%
1993 AVG. MONTHLY OCCUPANCY %: 93%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 3/2005
Prudential Mortgage Capital
One Ravinia Drive, Suite 1400
Atlanta, Georgia 30346
INITIAL PRINCIPAL BALANCE: $1,836,576 ANNUAL DEBT SERVICE: $145,920
5/31/98 BALANCE: $1,834,103 MONTHLY PAYMENT: $ 12,160
BALANCE DUE AT MATURITY: $1,681,926
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 7.01% and amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: Prepayable after 4/2001 with yield maintenance until
10/2004; thereafter prepayable without penalty.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 2/95 NUMBER OF UNITS SOLD: 2,000*
NUMBER OF INVESTORS: 38 PRICE PER UNIT: $500
PAID IN CAPITAL: $1,000,000* DATE OFFERING TERMINATED: 7/95
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions. Thereafter, the investors are entitled
to receive all remaining distributable cash during the fiscal year less a
reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 117 Units Short Term Capital Gain
valued at $10 per Unit (or $1,172) (assuming 20% rate): $181
Long Term Capital Gain
(assuming 39% rate): $ 93
----------------------------------------- -------------------------------------
(See Endnotes)
- ----------
* Includes 1,840 units sold in the program's offering plus 160 units issued
to four investors in exchange for property interests acquired by them in an
earlier unrelated program which was terminated.
<PAGE>
REALTY OPPORTUNITY INCOME FUND VIII, LTD.
(GP: Baron Capital IV, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1985
Forest Glen Apartments - Beneficial interest in
Phase II unrecorded land trust
300 Forest Glen Boulevard
Daytona Beach, Florida 32114
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 6.85
------------- --------- --------------------- ------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- --------------------- ------------------
2 BR 23 1,075 $619
------------- --------- --------------------- ------------------
3 BR 7 1,358 $699
------------- --------- --------------------- ------------------
Total 30 34,231
------------- --------- ---------------------
7/1/98 OCCUPANCY %: 93% ESTIMATED APPRAISED VALUE: $2,183,212
1997 AVG. MONTHLY OCCUPANCY %: 73% APPRAISAL DATE: 11/97
1996 AVG. MONTHLY OCCUPANCY %: 82%
1995 AVG. MONTHLY OCCUPANCY %: 91%
1994 AVG. MONTHLY OCCUPANCY %: 92%
1993 AVG. MONTHLY OCCUPANCY %: 92%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 3/2005
Prudential Mortgage Capital
One Ravinia Drive, Suite 1400
Atlanta, Georgia 30346
INITIAL PRINCIPAL BALANCE: $1,072,132 ANNUAL DEBT SERVICE: $85,188
5/31/98 BALANCE: $1,070,688 MONTHLY PAYMENT: $ 7,099
BALANCE DUE AT MATURITY: $ 981,813
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 7.01% and amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: Prepayable after 4/2001 with yield maintenance until
10/2004; thereafter prepayable without penalty.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 3/94 NUMBER OF UNITS SOLD: 944
NUMBER OF INVESTORS: 45 PRICE PER UNIT: $1,000
PAID IN CAPITAL: $944,000 DATE OFFERING TERMINATED: 6/94
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions. Thereafter, the investors are entitled
to receive all remaining distributable cash during the fiscal year less a
reasonable cash reserve determined by the GP.
ALLOCATION OF INTEREST IN NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After
investors have received an aggregate amount (including prior distributions)
equal to their capital contributions plus a 10% yearly cash-on-cash return,
the GP is entitled to receive any remaining net proceeds until it has received
a similar return on its capital contribution; thereafter the investors and the
GP share any remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 118 Units Short Term Capital Gain
valued at $10 per Unit (or $1,177) (assuming 20% rate): $312
Long Term Capital Gain
(assuming 39% rate): $160
----------------------------------------- -------------------------------------
(See Endnotes)
- ----------
* The GP became a manager of this program in July 1995, replacing Realty
Capital I, Inc., the initial sponsor.
<PAGE>
FLORIDA INCOME ADVANTAGE FUND I, LTD.
(GP: Baron Capital IV, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1985
Forest Glen Apartments - Beneficial interest in
Phase III unrecorded land trust
300 Forest Glen Boulevard
Daytona Beach, Florida 32114
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 6.85
------------- --------- --------------------- ------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- --------------------- ------------------
2 BR 19 1,075 $619
------------- --------- --------------------- ------------------
3 BR 7 1,358 $699
------------- --------- --------------------- ------------------
Total 26 29,931
------------- --------- ---------------------
7/1/98 OCCUPANCY %: 92% ESTIMATED APPRAISED VALUE: $1,949,049
1997 AVG. MONTHLY OCCUPANCY %: 88% APPRAISAL DATE: 11/97
1996 AVG. MONTHLY OCCUPANCY %: 94%
1995 AVG. MONTHLY OCCUPANCY %: 98%
1994 AVG. MONTHLY OCCUPANCY %: 92%
1993 AVG. MONTHLY OCCUPANCY %: 93%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 3/2005
Prudential Mortgage Capital
One Ravinia Drive, Suite 1400
Atlanta, Georgia 30346
INITIAL PRINCIPAL BALANCE: $854,708 ANNUAL DEBT SERVICE: $67,908
5/31/98 BALANCE: $853,557 MONTHLY PAYMENT: $ 5,659
BALANCE DUE AT MATURITY: $782,744
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 7.01% and amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: Prepayable after 4/2001 with yield maintenance until
10/2004; thereafter prepayable without penalty.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 2/94 NUMBER OF UNITS SOLD: 940
NUMBER OF INVESTORS: 46 PRICE PER UNIT: $1,000
PAID IN CAPITAL: $940,000 DATE OFFERING TERMINATED: 6/95
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive all remaining distributable cash during the fiscal year
less a reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 116 Units Short Term Capital Gain
valued at $10 per Unit (or $1,164) (assuming 20% rate): $84
Long Term Capital Gain
(assuming 39% rate): $43
----------------------------------------- -------------------------------------
(See Endnotes)
- ----------
The GP became a manager of this program in July 1995, replacing Realty Capital
IV, Inc., the initial sponsor.
<PAGE>
FLORIDA INCOME APPRECIATION FUND I, LTD.
(GP: Baron Capital IV, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1985
Forest Glen Apartments - Beneficial interest in
Phase IV unrecorded land trust
Daytona Beach, Florida
32114
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 6.85
------------- --------- ---------------------- ------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- ---------------------- ------------------
2 BR 6 1,075 $619
------------- --------- ---------------------- ------------------
3 BR 2 1,358 $699
------------- --------- ---------------------- ------------------
Total 8 9,166
------------- --------- ----------------------
7/1/98 OCCUPANCY %: 88% ESTIMATED APPRAISED VALUE: $474,359
1997 AVG. MONTHLY OCCUPANCY %: 91% APPRAISAL DATE: 11/97
1996 AVG. MONTHLY OCCUPANCY %: 91%
1995 AVG. MONTHLY OCCUPANCY %: 88%
1994 AVG. MONTHLY OCCUPANCY %: 91%
1993 AVG. MONTHLY OCCUPANCY %: 91%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 3/2005
Prudential Mortgage Capital
One Ravinia Drive, Suite 1400
Atlanta, Georgia 30346
INITIAL PRINCIPAL BALANCE: $236,584 ANNUAL DEBT SERVICE: $18,792
5/31/98 BALANCE: $236,265 MONTHLY PAYMENT: $ 1,566
BALANCE DUE AT MATURITY: $216,712
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 7.01% and amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: Prepayable after 4/2001 with yield maintenance until
10/2004; thereafter prepayable without penalty.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 4/94 NUMBER OF UNITS SOLD: 205
NUMBER OF INVESTORS: 13 PRICE PER UNIT: $1,000
PAID IN CAPITAL: $205,000 DATE OFFERING TERMINATED: 9/94
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive any remaining distributable cash during the fiscal year
less a reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 116 Units Short Term Capital Gain
valued at $10 per Unit (or $1,160) (assuming 20% rate): $106
Long Term Capital Gain
(assuming 39% rate): $ 55
----------------------------------------- -------------------------------------
(See Endnotes)
- ----------
The GP became a manager of this program in July 1995, replacing Realty Capital
II, Inc., the initial sponsor.
<PAGE>
FLORIDA CAPITAL INCOME FUND IV, LTD.
(GP: Baron Capital V, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1986
GLEN LAKE ARMS APARTMENTS Limited partnership
2000 Gandy Boulevard North interest in limited
St. Petersburg, Florida partnership which holds
33702 fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 7.16
------------- --------- --------------------- ------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- --------------------- ------------------
1 BR 144 550 $674
------------- --------- --------------------- ------------------
Total 144 79,200
------------- --------- ---------------------
7/1/98 OCCUPANCY %: 68% ESTIMATED APPRAISED VALUE: $6,483,079
1997 AVG. MONTHLY OCCUPANCY %: 78% APPRAISAL DATE: 1/98
1996 AVG. MONTHLY OCCUPANCY %: 81%
1995 AVG. MONTHLY OCCUPANCY %: 72%
1994 AVG. MONTHLY OCCUPANCY %: 79%
1993 AVG. MONTHLY OCCUPANCY %: 84%
================================================================================
MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: SECOND MORTGAGE HOLDER AND ADDRESS:
Republic Bank Glen Lake Arms Joint Venture
1301 Sixth Avenue West 10490 Gandy Boulevard North, Suite 2E
Bradenton, Florida 34205 St. Petersburg, Florida 33702
INITIAL PRINCIPAL BALANCE: $2,812,500 INITIAL PRINCIPAL BALANCE: $375,000
5/31/98 BALANCE: $2,692,263 5/31/98 BALANCE: $359,016
BALANCE DUE AT MATURITY: $2,652,341 BALANCE DUE AT MATURITY: $343,772
MATURITY DATE: 5/18/00 MATURITY DATE: 5/01/05
ANNUAL DEBT SERVICE: $ 293,700 ANNUAL DEBT SERVICE: $ 34,728
MONTHLY PAYMENT: $ 24,475 MONTHLY PAYMENT: $ 2,894
MORTGAGE INTEREST AND AMORTIZATION MORTGAGE INTEREST AND AMORTIZATION
PROVISIONS: The loan bears a fixed PROVISIONS: The loan bears a fixed
interest rate of 9.55% and amortizes interest rate of 8.0% and amortizes on
on a 25-year basis. a 25-year basis.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 1/85 NUMBER OF UNITS SOLD: 3,640
NUMBER OF INVESTORS: 60 PRICE PER UNIT: $500
PAID IN CAPITAL: $1,820,000 DATE OFFERING TERMINATED: 6/96
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive all remaining distributable cash during the fiscal year
less a reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return (and, in the
case of a property sale, after the holder of collateral mortgage financing has
received 10% of the net sale proceeds remaining after investors have received
an aggregate amount equal to their capital contributions), the GP is entitled
to receive any remaining net proceeds until it has received a similar return
on its capital contribution; thereafter the investors and the GP share any
remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 125 Units Short Term Capital Gain
valued at $10 per Unit (or $1,248) (assuming 20% rate): $135
Long Term Capital Gain
(assuming 39% rate): $ 69
----------------------------------------- -------------------------------------
(See Endnotes)
<PAGE>
CENTRAL FLORIDA INCOME APPRECIATION FUND, LTD.
(GP: Sigma Financial Capital, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1986
GROVE HAMLET APARTMENTS Limited partnership
815B Grove Hamlet Way interest in limited
Deland, Florida 32720 partnership which holds
fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 6.21
------------- --------- -------------------- ------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- -------------------- ------------------
1 BR 10 576 $409
------------- --------- -------------------- ------------------
2 BR 46 864 $479
------------- --------- -------------------- ------------------
Total 56 45,504
------------- --------- --------------------
7/1/98 OCCUPANCY %: 98% ESTIMATED APPRAISED VALUE: $2,575,887
1997 AVG. MONTHLY OCCUPANCY %: 71% APPRAISAL DATE: 11/97
1996 AVG. MONTHLY OCCUPANCY %: 75%
1995 AVG. MONTHLY OCCUPANCY %: 92%
1994 AVG. MONTHLY OCCUPANCY %: 95%
1993 AVG. MONTHLY OCCUPANCY %: 96%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 10/1/05
Midland Loan Services
210 West 10th Street
Kansas City, Missouri 64105
INITIAL PRINCIPAL BALANCE: $1,400,000 ANNUAL DEBT SERVICE: $ 156,024
5/31/98 BALANCE: $1,254,807 MONTHLY PAYMENT: $ 13,002
BALANCE DUE AT MATURITY: $1,314,872
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 9.50% and amortizes on a 25-year basis.
PREPAYMENT PROVISIONS: Prepayable without penalty.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 8/94 NUMBER OF UNITS SOLD: 2,100
NUMBER OF INVESTORS: 51 PRICE PER UNIT: $500
PAID IN CAPITAL: $1,050,000 DATE OFFERING TERMINATED: 10/95
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive any remaining distributable cash during the fiscal year
less a reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%.
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 119 Units Short Term Capital Gain
valued at $10 per Unit (or $1,193) (assuming 20% rate): $227
Long Term Capital Gain
(assuming 39% rate): $116
----------------------------------------- -------------------------------------
(See Endnotes)
<PAGE>
GSU STADIUM STUDENT APARTMENTS, LTD.
(GP: Baron Capital X, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1987
STADIUM CLUB APARTMENTS Limited partnership
210 Lanier Drive interest in limited
Statesboro, Georgia 30458 partnership which holds
fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 3.50
------------- --------- -------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq. Ft.) RENTAL RATE
------------- --------- -------------------- -------------------
Studio 2 288 $375
------------- --------- -------------------- -------------------
3 BR 3 880 $688
------------- --------- -------------------- -------------------
4 BR 55 880 $876
------------- --------- -------------------- -------------------
Total 60 50,736
------------- --------- --------------------
7/1/98 OCCUPANCY %: 82% ESTIMATED APPRAISED VALUE: $2,800,000
1997 AVG. MONTHLY OCCUPANCY %: 86% APPRAISAL DATE: 8/97
1996 AVG. MONTHLY OCCUPANCY %: 90%
1995 AVG. MONTHLY OCCUPANCY %: 74%
1994 AVG. MONTHLY OCCUPANCY %: 86%
1993 AVG. MONTHLY OCCUPANCY %: 82%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 10/1/05
GMAC
650 Dresher Road
Horsham, Pennsylvania 19044
INITIAL PRINCIPAL BALANCE: $1,750,000 ANNUAL DEBT SERVICE: $151,272
5/31/98 BALANCE: $1,740,736 MONTHLY PAYMENT: $ 12,606
BALANCE DUE AT MATURITY: $1,615,458
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 7.87% and amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: Prepayable with prepayment fee in an amount equal to 1%
of the then outstanding principal balance.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 11/95 NUMBER OF UNITS SOLD: 2,000
NUMBER OF INVESTORS: 38 PRICE PER UNIT: $500
PAID IN CAPITAL: $1,000,000 DATE OFFERING TERMINATED: 2/96
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the GP receives all
remaining distributable cash during the fiscal year less a reasonable cash
reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%
----------------------------------------- -------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 117 Units Short Term Capital Gain
valued at $10 per Unit (or $1,167) (assuming 20% rate): $125
Long Term Capital Gain
(assuming 39%rate): $ 64
----------------------------------------- -------------------------------------
(See Endnotes)
<PAGE>
MIDWEST INCOME GROWTH FUND VI, LTD.
(GP: Sigma Financial Capital VI, Inc.)
==============================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1974
BROOKWOOD WAY APARTMENTS Limited partnership
327 N. Brookwood Way interest in limited
Mansfield, Ohio 44906 partnership which holds
fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 3.92
------------- --------- -------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq.Ft.) RENTAL RATE
------------- --------- -------------------- -------------------
Studio 3 288 $269
------------- --------- --------------------- ------------------
1 BR 60 576 $359
------------- --------- --------------------- ------------------
2 BR 3 864 $389
------------- --------- --------------------- ------------------
Total 66 38,016
------------- --------- ---------------------
7/1/98 OCCUPANCY %: 97% ESTIMATED APPRAISED VALUE: $1,764,000
1997 AVG. MONTHLY OCCUPANCY %: 94% APPRAISAL DATE: 6/96
1996 AVG. MONTHLY OCCUPANCY %: 97%
1995 AVG. MONTHLY OCCUPANCY %: 95%
1994 AVG. MONTHLY OCCUPANCY %: 96%
1993 AVG. MONTHLY OCCUPANCY %: 94%
================================================================================
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 12/1/06
Mellon Bank
1422 Euclid #900
Cleveland, Ohio 44115
INITIAL PRINCIPAL BALANCE: $1,075,000 ANNUAL DEBT SERVICE: $108,612
5/31/98 BALANCE: $1,058,868 MONTHLY PAYMENT: $ 9,051
BALANCE DUE AT MATURITY: $ 890,263
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 9.04% and amortizes on a 25-year basis.
PREPAYMENT PROVISIONS: Loan may be prepaid in whole at any time after December
1, 2001 provided written notice of such prepayment is received by lender nor
more than 60 days and not less than 30 days prior to the date of such payment.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 4/96 NUMBER OF UNITS SOLD: 600
NUMBER OF INVESTORS: 7 PRICE PER UNIT: $500
PAID IN CAPITAL: $300,000 DATE OFFERING TERMINATED: 10/96
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive 70% of any remaining distributable cash during the fiscal
year less a reasonable cash reserve determined by the GP, with the GP
receiving the remaining 30%.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%
-------------------------------------------------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 102 Units Short Term Capital Gain
valued at $10 per Unit (or $1,017): (assuming 20% rate): $ 155
Long Term Capital Gain
(assuming 39% rate): $ 79
- --------------------------------------------------------------------------------
(See Endnotes)
<PAGE>
FLORIDA OPPORTUNITY INCOME PARTNERS, LTD.
(GP: Baron Capital III, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1982
CAMELLIA COURT APARTMENTS Limited partnership
1401 S. Clyde Morris Boulevard interest in limited
Daytona Beach, Florida 32114 partnership which holds
fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 5.15
------------- --------- -------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq.Ft.) RENTAL RATE
------------- --------- -------------------- -------------------
1 BR 59 576 $420
------------ --------- ------------------- ------------------
2 BR 1 864 $560
------------- --------- -------------------- ------------------
Total 60 34,848
------------- --------- --------------------
7/1/98 OCCUPANCY %: 90% ESTIMATED APPRAISED VALUE: $2,144,788
APPRAISAL DATE: 7/98: oral estimate pending
receipt of MAI appraisal
================================================================================
1997 AVG. MONTHLY OCCUPANCY %: 75%
================================================================================
1996 AVG. MONTHLY OCCUPANCY %: 91%
1995 AVG. MONTHLY OCCUPANCY %: 91%
1994 AVG. MONTHLY OCCUPANCY %: 78%
1993 AVG. MONTHLY OCCUPANCY %: 72%
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 11/1/06
Column Financial
6400 Congress Avenue #200
Boca Raton, Florida 33487
INITIAL PRINCIPAL BALANCE: $1,100,000 ANNUAL DEBT SERVICE: $111,132
5/31/98 BALANCE: $1,082,394 MONTHLY PAYMENT: $ 9,261
BALANCE DUE AT MATURITY: $ 984,430
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 9.04% and amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: No prepayment permitted during the first five years of
the loan; thereafter, entire principal balance may be prepaid, provided during
the sixth and seventh years of the loan lender is paid a prepayment fee equal to
the greater of one percent of the outstanding loan balance or yield maintenance.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 8/95 NUMBER OF UNITS SOLD: 800
NUMBER OF INVESTORS: 29 PRICE PER UNIT: $1,000
PAID IN CAPITAL: $800,000 DATE OFFERING TERMINATED: 12/95
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive any remaining distributable cash during the fiscal year
less a reasonable cash reserve determined by the GP.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 70%/30%.
- --------------------------------------------------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 105 Units Short Term Capital Gain
valued at $10 per Unit (or $1,050) (assuming 20% rate): $155
Long Term Capital Gain
(assuming 39% rate): $ 79
- --------------------------------------------------------------------------------
(See Endnotes)
<PAGE>
BARON STRATEGIC INVESTMENT FUND II, LTD.
(GP: Baron Capital XXXI, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1977
STEEPLECHASE APARTMENTS Limited partnership
841 W. 53rd Street interest in limited
Anderson, Indiana 46013 partnership which holds
fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 3.2
------------- --------- -------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq.Ft.) RENTAL RATE
------------- --------- -------------------- -------------------
1 BR 12 550 $399
------------- --------- -------------------- -------------------
2 BR 60 678 $419
------------- --------- -------------------- -------------------
Total 72 47,280
------------- --------- --------------------
7/1/98 OCCUPANCY %: 91% ESTIMATED APPRAISED VALUE: $2,125,000
APPRAISAL DATE: 7/98: oral estimate pending
receipt of MAI appraisal
================================================================================
1997 AVG. MONTHLY OCCUPANCY %: 73% APPRAISAL DATE: 8/98
================================================================================
1996 AVG. MONTHLY OCCUPANCY %: 70%
1995 AVG. MONTHLY OCCUPANCY %: 82%
================================================================================
1994 AVG. MONTHLY OCCUPANCY %: 78%
================================================================================
1993 AVG. MONTHLY OCCUPANCY %: 81%
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 10/1/06
Crown Bank
105 Live Oaks Garden #129
Castleberry, Florida 32707
INITIAL PRINCIPAL BALANCE: $1,260,000 ANNUAL DEBT SERVICE: $ 91,344
5/31/98 BALANCE: $1,244,892 MONTHLY PAYMENT: $ 7,612
BALANCE DUE AT MATURITY: $1,099,557
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: During loan years 1 and 2
interest rate is 7.25%; during years 3 and 4 interest rate is 7.75%; thereafter,
8.25%. The loan amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: Prepayable without penalty.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 7/96 NUMBER OF UNITS SOLD: 1,600
NUMBER OF INVESTORS: 16 PRICE PER UNIT: $500
PAID IN CAPITAL: $800,000 DATE OFFERING TERMINATED: 10/96
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 12.5% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive 50% of any remaining distributable cash during the fiscal
year less a reasonable cash reserve determined by the GP, and the GP the
remaining 50%.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 12.5% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 50%/50%.
- --------------------------------------------------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 110 Units Short Term Capital Gain
valued at $10 per Unit (or $1,095) (assuming 20% rate): $155
Long Term Capital Gain
(assuming 39% rate): $ 79
- --------------------------------------------------------------------------------
(See Endnotes)
<PAGE>
LAMPLIGHT COURT OF BELLEFONTAINE APARTMENTS, LTD.
(GP: Baron Capital IX, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1973
LAMPLIGHT COURT APARTMENTS Unrecorded second mortgage
1600 S. Detroit in the property
Bellefontaine, OH 43311
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 6.00
------------- --------- -------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq.Ft.) RENTAL RATE
------------- --------- -------------------- -------------------
Studio 12 288 5 unfurnished $339
7 furnished $359
------------- --------- -------------------- -------------------
one/one 53 576 $369
------------- --------- -------------------- -------------------
two/one 15 864 $499
------------- --------- -------------------- -------------------
Total 80 46,944
------------- --------- --------------------
7/1/98 OCCUPANCY %: 95% ESTIMATED APPRAISED VALUE: $2,147,000
================================================================================
1997 AVG. MONTHLY OCCUPANCY %: 87% APPRAISAL DATE: 6/96
================================================================================
1996 AVG. MONTHLY OCCUPANCY %: 93%
1995 AVG. MONTHLY OCCUPANCY %: 88%
1994 AVG. MONTHLY OCCUPANCY %: 90%
1993 AVG. MONTHLY OCCUPANCY %: 89%
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 11/1/06
Column Financial
3414 Peachtree Road N.E.
Suite 1140
Atlanta, Georgia 30326
INITIAL PRINCIPAL BALANCE: $1,400,000 ANNUAL DEBT SERVICE: $135,660
5/31/98 BALANCE: $1,376,182 MONTHLY PAYMENT: $ 11,305
BALANCE DUE AT MATURITY: $1,158,349
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 9.04% and amortizes on a 25-year basis.
PREPAYMENT PROVISIONS: No prepayment permitted during the first five years of
the loan; thereafter, may be prepaid in whole; provided that during the sixth
and seventh years of the loan, lender is paid a prepayment fee equal to the
greater of one percent of the outstanding loan balance or yield maintenance.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 4/96 NUMBER OF UNITS SOLD: 700
NUMBER OF INVESTORS: 27 PRICE PER UNIT: $1,000
PAID IN CAPITAL: $700,000 DATE OFFERING TERMINATED: 11/96
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 10% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive 50% of any remaining distributable cash during the fiscal
year less a reasonable cash reserve determined by the GP, and the GP the
remaining 50%.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 10% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 50%/50%.
- --------------------------------------------------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 111 Units Short Term Capital Gain
valued at $10 per Unit (or $1,116) (assuming 20% rate): $155
Long Term Capital Gain
(assuming 39% rate): $ 79
- --------------------------------------------------------------------------------
(See Endnotes)
<PAGE>
BARON STRATEGIC INVESTMENT FUND IV, LTD.
(GP: Baron Capital XVII, Inc.)
================================================================================
PROPERTY INFORMATION
PROPERTY NAME AND ADDRESS: TYPE OF PROPERTY INTEREST: YEAR COMPLETED: 1988
PINE VIEW APARTMENTS Limited partnership
4801 N. Pine Hills Road interest in limited
Orlando, Florida 32808 partnership which holds
fee simple
UNIT MIX AND RENTAL RATES: APPROXIMATE ACREAGE: 4.38
------------- --------- -------------------- -------------------
APPROXIMATE APPROXIMATE
RENTABLE AVERAGE MONTHLY
UNIT TYPE NUMBER AREA PER UNIT (Sq.Ft.) RENTAL RATE
------------- --------- -------------------- -------------------
Studio 26 288 $389
------------- --------- --------------------- -------------------
1 BR 59 576 $449
------------- --------- --------------------- -------------------
2 BR 6 864 $589
------------- --------- --------------------- -------------------
Total 91 45,656
------------- --------- ---------------------
7/1/98 OCCUPANCY %: 97% ESTIMATED APPRAISED VALUE: $2,848,000
================================================================================
1997 AVG. MONTHLY OCCUPANCY %: 92% APPRAISAL DATE: 2/98
================================================================================
1996 AVG. MONTHLY OCCUPANCY %: 93%
1995 AVG. MONTHLY OCCUPANCY %: 90%
1994 AVG. MONTHLY OCCUPANCY %: 92%
1993 AVG. MONTHLY OCCUPANCY %: 91%
FIRST MORTGAGE INFORMATION
FIRST MORTGAGE HOLDER AND ADDRESS: MATURITY DATE: 11/1/04
GMAC Commercial Mortgage Bank
88 Pine Street
New York, NY 10005
INITIAL PRINCIPAL BALANCE: $1,620,000 ANNUAL DEBT SERVICE: $139,272
5/31/98 BALANCE: $1,613,028 MONTHLY PAYMENT: $ 11,606
BALANCE DUE AT MATURITY: $1,493,008
MORTGAGE INTEREST AND AMORTIZATION PROVISIONS: The loan bears a fixed interest
rate of 7.75% and amortizes on a 30-year basis.
PREPAYMENT PROVISIONS: No prepayment permitted prior to May 1, 2004; thereafter,
may be prepaid subject to a yield maintenance fee payable until 6 months prior
to maturity.
================================================================================
INVESTMENT PROGRAM INFORMATION
DATE OFFERING BEGAN: 11/96 NUMBER OF UNITS SOLD: 2,000
NUMBER OF INVESTORS: 56 PRICE PER UNIT: $500
PAID IN CAPITAL: $1,000,000 DATE OFFERING TERMINATED: 3/98
ALLOCATION OF DISTRIBUTABLE CASH: Each fiscal year, all distributable cash is
distributed to the investors until they have received a 12.5% non-cumulative
return on their capital contributions; the GP is then entitled to receive a
similar return on its capital contribution. Thereafter, the investors are
entitled to receive 50% of any remaining distributable cash during the fiscal
year less a reasonable cash reserve determined by the GP, and the GP the
remaining 50%.
ALLOCATION OF NET PROCEEDS FROM PROPERTY SALE OR REFINANCING: After investors
have received an aggregate amount (including prior distributions) equal to
their capital contributions plus a 12.5% yearly cash-on-cash return, the GP is
entitled to receive any remaining net proceeds until it has received a similar
return on its capital contribution; thereafter the investors and the GP share
any remaining net proceeds 50%/50%.
- --------------------------------------------------------------------------------
NUMBER OF OPERATING PARTNERSHIP UNITS ESTIMATED DEFERRED TAXABLE GAIN FROM
TO BE RECEIVED IN EXCHANGE OFFERING EXCHANGE OFFERING (per $1,000 of
(per $1,000 of Investors' original Investors' original investment):
investment): 124 Units Short Term Capital Gain
valued at $10 per Unit (or $1,248) (assuming 20% rate): $155
Long Term Capital Gain
(assuming 39% rate): $ 79
- --------------------------------------------------------------------------------
(See Endnotes)
<PAGE>
Endnotes:
1. The First Mortgage Loan is not insured by the Federal Housing Administration
or guaranteed by the Veterans Administration or otherwise insured or
guaranteed.
2. The Property is in good overall condition and is suitable and adequate for
the purpose for which it was built.
3. The Property is subject to significant competition from other multi-family
residential apartment properties in the general vicinity of the Property.
4. In the opinion of the Managing Shareholder, the Property is covered by
insurance of the types and amounts which are comparable for similar
properties located in the general vicinity of the Property.
5. Each Property is a multi-family residential apartment property (other than
Glen Lake Arms Apartments, which are short-term corporate residential units)
which generally leases units to tenants under one-year term lease agreements
common in the industry.
6. The estimated appraised value of the Property was determined by a qualified
and licensed independent appraisal firm. See the Prospectus at "THE TRUST -
The Operating Partnership."
7. Offerees who accept the Exchange Offering will not incur any immediate tax
liability for any taxable gain in connection with such transaction. Any such
tax liability will be deferred until a later date. The schedule at "Estimated
Deferred Taxable Gain from Exchange Offering (per $1,000 of Investors'
original investment)" indicates the amount of taxable gain each Offeree who
accepts the Exchange Offering will defer in connection with such transaction
per each $1,000 of his original investment. See "THE TRUST - The Operating
Partnership."
<PAGE>
EXHIBIT D SUPPLEMENT
FINANCIAL STATEMENTS OF ADDITIONAL EXCHANGE PROPERTIES
<PAGE>
EXHIBIT D
BARON CAPITAL TRUST
INDEX TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
OF ADDITIONAL EXCHANGE PROPERTIES PURSUANT TO REGULATION SB 310
BROOKWOOD WAY APARTMENTS:
Independent Auditors Report
Statement of Revenues and Certain Expenses
for the Years Ended December 31, 1996 and 1997
Notes to Statement of Revenues and Certain Expenses
CAMELLIA COURT APARTMENTS:
Independent Auditors Report
Statement of Revenues and Certain Expenses
for the Years Ended December 31, 1996 and 1997
Notes to Statement of Revenues and Certain Expenses
LAMPLIGHT COURT APARTMENTS:
Independent Auditors Report
Statement of Revenues and Certain Expenses
for the Years Ended December 31, 1996 and 1997
Notes to Statement of Revenues and Certain Expenses
PINE VIEW APARTMENTS:
Independent Auditors Report
Statement of Revenues and Certain Expenses
for the Years Ended December 31, 1996 and 1997
Notes to Statement of Revenues and Certain Expenses
STEEPLECHASE APARTMENTS:
Independent Auditors Report
Statement of Revenues and Certain Expenses
for the Years Ended December 31, 1996 and 1997
Notes to Statement of Revenues and Certain Expenses
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Brookwood Way Apartments for the years ended December 31, 1996 and 1997. This
financial statement is the responsibility of the Company's management. My
responsibility is to express an opinion on this financial statement based upon
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form SB-2 of
Baron Capital Trust, a Delaware business trust) and excludes material expenses
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operations
of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Brookwood Way Apartments for the years ended December 31, 1996 and 1997
in conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
March 28, 1998
<PAGE>
BROOKWOOD WAY APARTMENTS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
December 31, December 31,
1997 1996
----------- -----------
REVENUES
Rental income $248,950 $236,466
Other income 7,988 6,293
-------- --------
Total revenues 256,938 242,759
-------- --------
CERTAIN EXPENSES
Personnel 22,296 27,583
Advertising and promotion 6,998 4,626
Utilities 20,793 20,213
Repairs and maintenance 15,092 14,234
Real estate taxes and insurance 17,645 12,941
Mortgage interest expense 96,565 96,745
Management fees 15,720 16,637
Other operating expenses 2,972 2,727
-------- --------
Total certain expenses 198,081 195,706
-------- --------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ 58,857 $ 47,053
======== ========
See Note to Statement of Revenues and Certain Expenses
<PAGE>
BROOKWOOD WAY APARTMENTS
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Brookwood Way Apartments consist of 66 units located in Mansfield, Ohio.
The property was acquired by purchase in November 1996 by Midwest Income
Growth Fund VI, Ltd. The following percentage of units were occupied at the
various period ending dates:
December 31, 1996 94%
December 31, 1997 88%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Brookwood Way Apartments.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Camellia Court Apartments for the years ended December 31, 1996 and 1997. This
financial statement is the responsibility of the Company's management. My
responsibility is to express an opinion on this financial statement based upon
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form SB-2 of
Baron Capital Trust, a Delaware business trust) and excludes material expenses
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operations
of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Camellia Court Apartments for the years ended December 31, 1996 and 1997
in conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
June 13, 1998
<PAGE>
CAMELLIA COURT APARTMENTS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
December 31, December 31,
1997 1996
--------- ---------
REVENUES
Rental income $ 213,718 $ 255,025
Other income 16,516 19,693
--------- ---------
Total revenues 230,234 274,718
--------- ---------
CERTAIN EXPENSES
Personnel 35,481 20,430
Advertising and promotion 9,056 6,756
Utilities 25,805 30,769
Repairs and maintenance 24,685 21,320
Real estate taxes and insurance 35,934 37,559
Mortgage interest expense 98,851 78,273
Management fees 13,884 14,525
Other operating expenses 5,359 3,300
--------- ---------
Total certain expenses 249,055 212,932
--------- ---------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ (18,821) $ 61,786
========= =========
See Note to Statement of Revenues and Certain Expenses
<PAGE>
CAMELLIA COURT APARTMENTS
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Camellia Court Apartments consist of 60 units located in Daytona Beach,
Florida. The property was acquired by purchase March 6, 1995 by Florida
Opportunity Income Partners, Ltd. The following percentage of units were
occupied at the various period ending dates:
December 31, 1996 88%
December 31, 1997 78%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Camellia Court Apartments.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Lamplight Court Apartments for the years ended December 31, 1996 and 1997. This
financial statement is the responsibility of the Company's management. My
responsibility is to express an opinion on this financial statement based upon
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form SB-2 of
Baron Capital Trust, a Delaware business trust) and excludes material expenses
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operations
of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Lamplight Court Apartments for the years ended December 31, 1996 and 1997
in conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
March 28, 1998
<PAGE>
LAMPLIGHT COURT APARTMENTS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
December 31, December 31,
1997 1996
-------- --------
REVENUES
Rental income $303,933 $325,019
Other income 14,083 14,901
-------- --------
Total revenues 318,016 339,920
-------- --------
CERTAIN EXPENSES
Personnel 39,363 49,403
Advertising and promotion 6,648 6,747
Utilities 48,903 45,192
Repairs and maintenance 19,279 19,456
Real estate taxes and insurance 38,313 41,360
Mortgage interest expense 126,175 134,591
Management fees 18,581 21,187
Other operating expenses 4,690 7,093
-------- --------
Total certain expenses 301,952 325,029
-------- --------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ 16,064 $ 14,891
======== ========
See Note to Statement of Revenues and Certain Expenses
<PAGE>
LAMPLIGHT COURT APARTMENTS
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Lamplight Court Apartments consist of 80 units located in Bellefontaine,
Ohio. The property was acquired by purchase in 1985 by Independence
Village, Ltd. The following percentage of units were occupied at the
various period ending dates:
December 31, 1996 86%
December 31, 1997 90%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Lamplight Court Apartments.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the Pine
View Apartments for the years ended December 31, 1996 and 1997. This financial
statement is the responsibility of the Company's management. My responsibility
is to express an opinion on this financial statement based upon my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form SB-2 of
Baron Capital Trust, a Delaware business trust) and excludes material expenses
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operations
of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Pine View Apartments for the years ended December 31, 1996 and 1997 in
conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
March 28, 1998
<PAGE>
PINE VIEW APARTMENTS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
December 31, December 31,
1997 1996
-------- --------
REVENUES
Rental income $358,074 $382,792
Other income 32,557 19,469
-------- --------
Total revenues 390,631 402,261
-------- --------
CERTAIN EXPENSES
Personnel 33,083 40,056
Advertising and promotion 16,713 19,452
Utilities 49,502 46,699
Repairs and maintenance 52,329 64,718
Real estate taxes and insurance 43,589 45,005
Mortgage interest expense 131,707 138,693
Management fees 25,709 28,159
Other operating expenses 13,185 8,201
-------- --------
Total certain expenses 365,817 390,983
-------- --------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ 24,814 $ 11,278
======== ========
See Note to Statement of Revenues and Certain Expenses
<PAGE>
PINE VIEW APARTMENTS
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Pine View Apartments consist of 92 units located in Orlando, Florida. The
property was acquired by purchase in 1986 by Pineview Apartments, Ltd. The
following percentage of units were occupied at the various period ending
dates:
December 31, 1996 93%
December 31, 1997 91%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Pine View Apartments.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Steeplechase Apartments for the years ended December 31, 1996 and 1997. This
financial statement is the responsibility of the Company's management. My
responsibility is to express an opinion on this financial statement based upon
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form SB-2 of
Baron Capital Trust, a Delaware business trust) and excludes material expenses
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operations
of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Steeplechase Apartments for the years ended December 31, 1996 and 1997 in
conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
June 13, 1998
<PAGE>
STEEPLECHASE APARTMENTS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
December 31, December 31,
1997 1996
-------- ---------
REVENUES
Rental income $ 234,305 $ 231,630
Other income 10,733 13,663
--------- ---------
Total revenues 245,038 245,293
--------- ---------
CERTAIN EXPENSES
Personnel 50,624 57,299
Advertising and promotion 11,417 6,207
Utilities 49,085 56,241
Repairs and maintenance 31,930 21,149
Real estate taxes and insurance 33,112 37,786
Mortgage interest expense 93,448 95,540
Management fees 15,227 11,792
Other operating expenses 7,495 7,612
--------- ---------
Total certain expenses 292,338 293,626
--------- ---------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ (47,300) $ (48,333)
========= =========
See Note to Statement of Revenues and Certain Expenses
<PAGE>
STEEPLECHASE APARTMENTS
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Steeplechase Apartments consist of 72 units located in Anderson, Indiana.
The property was acquired on October 1, 1996 by Income Partners III, Ltd.
in which Baron Strategic Investment Fund II, Ltd. owns a 99% limited
partnership interest. The following percentage of units were occupied at
the various period ending dates:
December 31, 1996 65%
December 31, 1997 65%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Steeplechase Apartments.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
EXHIBIT E
FINANCIAL STATEMENTS OF ACQUIRED PROPERTIES
<PAGE>
EXHIBIT E
BARON CAPITAL TRUST
INDEX TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
OF ACQUIRED PROPERTIES PURSUANT TO REGULATION SB 310
CRYSTAL COURT APARTMENTS PHASE II:
Independent Auditors Report
Statement of Revenues and Certain Expenses
for the Years Ended December 31, 1996 and 1997
Notes to Statement of Revenues and Certain Expenses
HEATHERWOOD APARTMENTS PHASE I:
Independent Auditors Report
Statement of Revenues and Certain Expenses
for the Years Ended December 31, 1996 and 1997
Notes to Statement of Revenues and Certain Expenses
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Crystal Court Apartments, Phase II, for the years ended December 31, 1996 and
1997. This financial statement is the responsibility of the Company's
management. My responsibility is to express an opinion on this financial
statement based upon my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form SB-2 of
Baron Capital Trust, a Delaware business trust) and excludes material expenses
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operations
of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Crystal Court Apartments, Phase II, for the years ended December 31, 1996
and 1997 in conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
March 28, 1998
<PAGE>
CRYSTAL COURT APARTMENTS, PHASE II
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
December 31, December 31,
1997 1996
------------ ------------
REVENUES
Rental income $307,069 $295,906
Other income 9,081 2,484
-------- --------
Total revenues 316,150 298,390
-------- --------
CERTAIN EXPENSES
Personnel 26,477 32,567
Advertising and promotion 1,755 3,136
Utilities 19,228 23,165
Repairs and maintenance 23,590 35,231
Real estate taxes and insurance 34,471 34,691
Mortgage interest expense 120,919 127,738
Management fees 20,777 21,537
Other operating expenses 4,341 3,897
-------- --------
Total certain expenses 251,558 281,962
-------- --------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ 64,592 $ 16,428
======== ========
See Note to Statement of Revenues and Certain Expenses
<PAGE>
CRYSTAL COURT APARTMENTS, PHASE II
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Crystal Court Apartments, Phase II, consist of 80 units located in
Lakeland, Florida. The property was acquired by purchase in 1982 by Crystal
Court Apartments II, Ltd. The following percentage of units were occupied
at the various period ending dates:
December 31, 1996 95%
December 31, 1997 95%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Crystal Court Apartments, Phase II.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Heatherwood Apartments, Phase I, for the years ended December 31, 1996 and 1997.
This financial statement is the responsibility of the Company's management. My
responsibility is to express an opinion on this financial statement based upon
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form SB-2 of
Baron Capital Trust, a Delaware business trust) and excludes material expenses
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operations
of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Heatherwood Apartments, Phase I, for the years ended December 31, 1996
and 1997 in conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
June 11, 1998
<PAGE>
HEATHERWOOD APARTMENTS, PHASE I
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
----------- ------------
<S> <C> <C>
REVENUES
Rental income $294,513 $284,886
Other income 12,847 16,566
-------- --------
Total revenues 303,893 301,452
-------- --------
CERTAIN EXPENSES
Personnel 42,317 31,851
Advertising and promotion 4,243 4,942
Utilities 29,999 27,255
Repairs and maintenance 36,667 48,649
Real estate taxes and insurance 38,221 36,052
Mortgage interest expense 60,327 63,986
Management fees 14,489 14,400
Other operating expenses 7,678 5,052
-------- --------
Total certain expenses 233,941 232,187
-------- --------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ 69,952 $ 69,265
======== ========
</TABLE>
See Note to Statement of Revenues and Certain Expenses
<PAGE>
HEATHERWOOD APARTMENTS, PHASE I
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Heatherwood Apartments, Phase I, consist of 68 units located in Kissimmee,
Florida. The property was acquired June 30, 1998, by Heatherwood Kissimmee,
Ltd. The following percentage of units were occupied at the various period
ending dates:
December 31, 1997 97%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Heatherwood Apartments, Phase I.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
