SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file number 333-13725-1
TRUST CREATED BY COMMERCIAL MORTGAGE ACCEPTANCE CORP.
(under a Pooling & Servicing Agreement dated as of December, 1, 1997,
which Trust is the issuer of Commercial Mortgage Pass-Through
Certificates, Series 1997-ML1)
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(Exact name of Registrant as specified in its Charter)
New York 36-4200879
(State or other jurisdiction (I.R.S. Employer of
incorporation or organization) Identification No.)
LaSalle National Bank
135 South LaSalle Street, Suite 200
Chicago, Illinois 60674-4107
Registrant's telephone number, including area code (800) 246-5761
Securities registered pursuant to Section 12(b) of the Act: Not
applicable.
Securities registered pursuant to Section 12(g) of the Act: Not
applicable.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No ____
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. (X)
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1997: Not applicable.
Number of shares of common stock as of December 31, 1997: Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
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PART I
ITEM 1. BUSINESS
The Registrant issued Commercial Mortgage Pass-Through Certificates,
Series 1997-ML1 (the "Securities") pursuant to a Pooling and Servicing Agreement
stated as of December 1, 1997 (the "Cut-off Date") among Commercial Mortgage
Acceptance Corp., as Depositor, Midland Loan Services, L.P., as Master Servicer
and Group 1 Special Servicer, CRIIMI MAE, as Group 2 Special Servicer and NOM
Special Servicer, LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. The assets of the Trust consist primarily of a pool of twelve
conventional, fixed rate mortgage loans or groups of cross-collateralized and
cross-defaulted mortgage loans (the "Mortgage Loans") having an aggregate
principal balance as of the Cut-off Date of approximately $848,482,929. The
Mortgage Loans are secured by Multi-family and Commercial Properties (each, a
"Mortgaged Property"). The Trust was formed on December 30, 1997. As a result,
the Trust did not have any significant operations in 1997. Security Holders
receive Monthly Reports regarding distributions.
ITEM 2. PROPERTIES.
Information regarding the Mortgaged Properties securing the Mortgage Loans
is set forth in the Prospectus Supplement and the Monthly Reports to Security
Holders. Selected financial data for the Mortgaged Properties securing Mortgage
Loans that exceed 10% of the aggregate principal balance of the Mortgage Loans
on the Cut-off Date is included in Item 6 below. The Trust will acquire title to
real estate only upon default of the mortgagors under the Mortgage Loans. As of
March 30, 1998, the Trust Fund did not own any real estate. Therefore, this item
is inapplicable.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings involving the Trust or,
with respect to the Trust or the Mortgage Loans, the Trustee, any custodian, the
Servicer or the Depositor, other than ordinary routine litigation incidental to
the Trustee's, any custodian's, the Servicer's or the Depositor's duties under
the Pooling and Servicing Agreement.
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of Security Holders during the fiscal
year covered by this report.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(a) The Registrant's Series 1997-ML1 Securities represent non-recourse
obligations of the Trust, such Trust having assets which consist of the Mortgage
Loans. Strictly speaking, Registrant has no "common equity," but for purposes of
this Item only, Registrant's Commercial
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Mortgage Pass-Through Certificates, Series 1997-ML1 (the "Securities"), are
treated as "common equity."
(a) Market Information. There is no established public trading market for
Registrant's Securities. Registrant believes the Securities are
traded primarily in intra-dealer markets and non-centralized
inter-dealer markets.
(b) Holders. The approximate number of registered holders of all classes
of Securities as of December 31, 1997 was less than 50.
(c) Dividends. Not applicable. The information regarding dividends
required by sub-paragraph (c) of Item 201 of Regulation S-K is
inapplicable because the Trust does not pay dividends. However,
information as to distribution to Security Holders will be provided
in the Monthly Reports to Security Holders for each month in which
a distribution to Security Holders is made. Since the Trust was
formed on December 30, 1997, no distributions were made in 1997.
(b) The following information reports the Registrant's use of proceeds in
connection with its offering of the Securities:
The Registrant registered $730 million of Commercial Mortgage Backed
Certificates, issuable in series, pursuant to a Registration Statement on Form
S-3 (File No. 333-13725), which was declared effective November 26, 1997. In
addition, the Registrant registered an additional $75 million of Commercial
Mortgage Back Certificates on Form S-3 (File No. 333-42835) pursuant to Rule
462(b) on December 19, 1997.
On December 5, 1997, the Registrant commenced its offering of its
Commercial Mortgage Backed Certificates, Series 1997-ML1 (the "Certificates").
Merrill Lynch, Pierce, Fenner & Smith Incorporated served as underwriter for the
offering. On December 30, 1997, the Registrant sold the following Certificates
in the offering.
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Title of Class Principal Amount of Class
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Class A-1 $142,191,000
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Class A-2 $117,378,000
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Class A-3 $220,490,334
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Class A-4 $ 96,908,666
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Class B $ 59,394,000
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Class C $ 46,666,000
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Class D $ 46,667,000
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Class E $ 16,969,000
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Class IO (1)
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(1) The Class IO Certificates are interest only certificates and do
not have a principal balance.
All of the offered Certificates were sold. The aggregate offering price for
the Certificates was $796,535,232. The offering terminated prior to the sale of
all the securities registered, due
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to the fact the offering represented a take down off the Company's shelf
registration pursuant to Rule 415.
The Registrant's estimated expenses in connection with the offering are
estimated to be approximately $400,000. None of such amounts were paid to
officers, directors, 10% stockholders or other affiliates of the Registrant. The
remaining expenses of the offering were paid by the mortgage loan seller from
the proceeds of the sale of the mortgage loans to the Registrant.
All of the net proceeds from the offering ($796,135,232, after deducting
estimated expenses) were used to acquire the mortgage loans being transferred to
the Trust created by the Registrant in connection with the offering. None of
such amounts were paid to officers, directors, 10% stockholders or other
affiliates of the Registrant. The use of the proceeds does not represent a
material change in the use of proceeds described in the prospectus.
ITEM 6. SELECTED FINANCIAL DATA.
Not Applicable. Because of the limited activities of the Trust, information
with respect to the performance of the Trust will be summarized in the Monthly
Reports to Security Holders.
The following is selected financial information for three of the Mortgage
Properties securing Mortgage Loans exceeding more than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date:
Copley Place
Unaudited Financial Statements
1997
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INCOME:
Base Rental Revenue 32,141,000
Expense Recoveries 11,408,000
Tax Recoveries
Replacement Reserves
Percentage Rents 989,000
Parking 8,888,000
Miscellaneous 730,000
Operating Income
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Potential Gross $54,156,000
Income
===============================================
Less: Vacancy 0
Allowance
EFFECTIVE GROSS $54,156,000
INCOME
===============================================
OPERATING EXPENSES:
Management Fees 1,896,000
Contract Services
Repairs & Maintenance 5,794,000
Payroll
Administrative 1,091,000
Parking Expense
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Utilities 4,419,000
CAM
Replacement Reserves
Legal Fees
Miscellaneous Expense 3,410,000
FIXED EXPENSES:
Insurance
Taxes 8,759,000
Ground Rent
TOTAL EXPENSES $25,369,000
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NET OPERATING INCOME $28,787,000
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TI's & LC's:
Tenant Improvements(1) 5,796,000
Leasing Commissions 629,000
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NET CASH FLOW $22,362,000
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(1) Tenant
Improvements
includes building
improvements, tenant
improvements, &
other capital
expenditures.
Tower 45
One Orlando Center
Unaudited Financial Statements
Tower Orlando
1997 1997 Consolidated
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INCOME:
Base Rental Revenue $19,813,415 $8,808,638 $28,622,053
Expense Recoveries 0
Tax Recoveries 0
Replacement Reserves 0
Percentage Rents 0
Parking 0
Miscellaneous 56,417 39,396 95,813
Operating Income
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Potential Gross $19,869,832 $8,848,034 $28,717,866
Income
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Less: Vacancy 0 0 0
Allowance
EFFECTIVE GROSS $19,869,832 $8,848,034 $28,717,866
INCOME
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OPERATING EXPENSES:
Management Fees 755,432 329,884 1,085,316
Contract Services 0
Repairs & 3,108,776 1,674,481 4,783,257
Maintenance (1)
Payroll 0
Administrative 318,423 22,040 340,463
Parking Expense 0
Utilities 0
CAM 0
Replacement Reserves 0
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Legal Fees 0
Miscellaneous Expense 0
FIXED EXPENSES:
Insurance 0
Taxes 3,663,325 892,450 4,555,775
Ground Rent 0
TOTAL EXPENSES $7,845,956 $2,918,855 $10,764,811
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NET OPERATING INCOME $12,023,876 $5,929,179 $17,953,055
================================================================================
TI's & LC's:
Tenant Improvements 0
Leasing Commissions 0
- ---------------------- -------------- ---------- --------------------
NET CASH FLOW $12,023,876 $5,929,179 $17,953,055
================================================================================
(1) Property
operating &
maintenance expense
Franklin Mills
Unaudited Financial Statements
1997
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INCOME:
Base Rental Revenue $16,214,392
Expense Recoveries 9,545,968
Tax Recoveries
Replacement Reserves
Percentage Rents 441,889
Parking
Miscellaneous 3,081,809
Operating Income
- -------------------------------------------------
Potential Gross $29,284,058
Income
=================================================
Less: Vacancy 0
Allowance
EFFECTIVE GROSS $29,284,058
INCOME
=================================================
OPERATING EXPENSES:
Management Fees 739,968
Contract Services
Repairs & Maintenance 942,417
Payroll 3,360,684
Administrative
Parking Expense
Utilities 838,344
CAM
Replacement Reserves
Legal Fees
Miscellaneous 1,720,135
Expense (1)
FIXED EXPENSES:
Insurance 763,397
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Taxes 3,948,382
Ground Rent
TOTAL EXPENSES $12,313,327
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NET OPERATING INCOME $16,970,731
===================================================================
TI's & LC's:
Tenant Improvements(1)
Leasing Commissions
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NET CASH FLOW $16,970,731
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(1) Recoverable
miscellaneous
operating expenses &
Non-Recoverable
other operating
expenses
Financial information for the Newton and Shiloh loans, each of which
exceeds 10% of the aggregate principal balance of the Mortgage Loans as of the
Cut-off Date, has not been provided by the related borrower as of March 31,
1998. Pursuant to the relevant loan documents, such financial information need
not be provided until April 30, 1998. This information will be filed by
Registrant in a Current Report on Form 8-K as soon as it is available.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
Not applicable. The information required by item 303 of Regulation S-K is
inapplicable because the Trust does not have management per se, but rather the
Trust has a Trustee who causes the preparation of the Monthly Reports to
Security Holders. Information concerning the Mortgage Loans and distributions to
the Security Holders is contained in the Monthly Reports to Security Holders.
Since the Trust was formed on December 30, 1997 and did not conduct any
significant substantive operations in 1997, the Annual Statement of Compliance
and the Annual Servicing Report are not applicable for 1997.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Not Applicable. Because of the limited activities of the Trust,
information with respect to the Trust will be summarized in the Monthly Reports
to Security Holders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
Not applicable. The Trust does not have officers or directors. Therefore,
the information requested by items 401 and 405 of Regulation S-K is
inapplicable.
ITEM 11. EXECUTIVE COMPENSATION.
Not applicable. The Trust does not have officers or directors. Therefore,
the information requested by item 402 of Regulation S-K is inapplicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) Security ownership of certain beneficial owners. Not applicable.
Under the Pooling and Servicing Agreement governing the Trust, the
holders of the Securities generally do not have the right to vote and
are prohibited from taking part in management of the Trust.
Therefore, the information requested by item 403(a) of Regulation S-K
is inapplicable.
(b) Security ownership of management. Not applicable. The Trust does not
have any officers or directors. Therefore, the information requested
by item 403(b) of Regulation S-K is inapplicable.
(c) Changes in control. Not applicable. Because Security Holders do not
possess, directly or indirectly, the power to direct or cause the
direction of the management and policies of the Trust, other than
with respect to certain required consents to amendments to the
Pooling and Servicing Agreement and the ability of holders of
specified amounts of the Securities to act as a group in the event
of the occurrence of certain events which if continuing would
constitute events of default under the Pooling & Servicing Agreement,
the information requested with respect to item 403(c) of Regulation
S-K is inapplicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable. The Trust does not have officers or directors and under
the Pooling and Servicing Agreement governing the Trust, the holder of the
Securities generally do not have the right to vote. Therefore, the information
requested by items 404 of Regulation S-K is inapplicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) The following is a list of documents filed as part of this report:
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EXHIBITS
*4.1 Pooling and Servicing Agreement dated as of December 1, 1997
(Exhibit 99.1 to Registrant's Form 8-K Report dated December 30,
1997).
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* Asterisk indicates exhibits incorporated by
reference as indicated.
(b) Reports on Form 8-K.
(1) Form 8-K dated December 30, 1997 covering Items 2 and 7.
(c) The exhibits required to be filed by Registrant pursuant to item 601
of Regulation S-K are listed above and in the Exhibit Index that
immediately follows the signature page hereof.
(d) Not Applicable. The Trust does not have any subsidiaries or
affiliates. Therefore, no financial statements are filed with respect
to subsidiaries or affiliates.
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SUPPLEMENTAL INFORMATION TO BE FURNISHED
WITH REPORTS FILED PURSUANT TO SECTION 15(D)
BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT
No Annual report, proxy statement, form of proxy or other soliciting
material has been sent to Security Holders, and the Registrant does not
contemplate sending any such materials subsequent to the filing of this report.
SIGNATURE
Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
MIDLAND LOAN SERVICES, L. P., not in its
individual capacity but solely as a duly
authorized agent of Registrant pursuant
to Section 3.22 of the Pooling and
Servicing Agreement dated as of December
1, 1997
By: Midland Data System, Inc., its General Partner
By: /s/ Lawrence D. Ashley
__________________________________________
Name: Lawrence D. Ashley
Title: Director of MBS Programs
Date: March 31, 1998
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EXHIBIT INDEX
EXHIBIT DOCUMENT
*4.1 Pooling and Servicing Agreement dated as of December
1, 1997 (Exhibit 99.1 to Registrant's Form 8-K Report
dated December 30, 1997).
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* Asterisk indicates exhibits incorporated by reference as indicated.
