<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1995 Commission File No. 0-2809
WESTERN INVESTMENT REAL ESTATE TRUST
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
------------------------------------------------------
California 94-6100058
- ------------------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3450 California Street, San Francisco, CA 94118
- ------------------------------------------- ----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (415) 929-0211
----------------------------
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the end of the period covered by this report.
Shares of Beneficial Interest, No Par Value - 16,969,012
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
INDEX TO 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
----
<S> <C> <C>
Item 1. Financial Statements (unaudited)
Balance Sheets - September 30, 1995 and December 31, 1994 3
Statements of Income - Three and nine months ended September 30, 1995
and 1994 4
Statements of Shareholders' Equity - Nine months ended September 30,1995
and year ended December 31, 1994 5
Statements of Cash Flows - Nine months ended September 30, 1995
and 1994 6
Notes to Financial Statements 7 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 10
PART II. OTHER INFORMATION 11
SIGNATURE 12
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
WESTERN INVESTMENT REAL ESTATE TRUST
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
ASSETS September 30, December 31,
1995 1994
-------------------------------
(In thousands)
<S> <C> <C>
Real estate investments:
Real estate owned.................................... $394,454 $389,094
Less accumulated depreciation and amortization....... (58,605) (50,802)
-------- --------
Net real estate investments..................... 335,849 338,292
Cash and cash equivalents................................. 749 648
Deferred long-term debt issuance costs,net................ 2,553 2,794
Accounts receivable and other assets...................... 5,768 5,438
-------- --------
$344,919 $347,172
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank line of credit....................................... 28,150 23,645
Convertible debentures.................................... 63,518 65,731
Senior notes, net......................................... 49,879 49,868
Real estate loan payable.................................. 1,311 1,362
-------- --------
142,858 140,606
Interest payable.......................................... 656 1,497
Prepaid rents and security deposits....................... 1,326 1,272
Other liabilities......................................... 1,507 1,113
------- --------
Total liabilities.................................... 146,347 144,488
-------- --------
Shareholders' equity:
Shares of beneficial interest, no par value,
unlimited share authorization.
Issued and outstanding:
September 30, 1995 - 16,969,012 shares;
December 31, 1994 - 16,734,532 shares............. 239,995 237,341
Accumulated dividends in excess of net income......... (41,423) (34,657)
-------- --------
Commitments and contingencies (note E)
Total shareholders' equity................................ 198,572 202,684
-------- --------
$344,919 $347,172
-------- --------
-------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1995 1994 1995 1994
-----------------------------------------------------------------
(In thousands, except share and per share data)
<S> <C> <C> <C> <C>
REVENUES:
Minimum rents....................................... $ 9,578 $ 8,962 $ 27,954 $ 25,077
Percentage rents.................................... 132 183 398 453
Recoveries from tenants............................. 1,150 1,296 4,306 3,687
Other income........................................ 129 186 410 1,799
----------- ----------- ----------- -----------
Total revenues........................................... 10,989 10,627 33,068 31,016
----------- ----------- ----------- -----------
EXPENSES:
Interest............................................ 2,867 2,725 8,690 7,252
Property operating costs............................ 1,575 1,635 5,522 4,774
Depreciation and amortization....................... 2,747 2,642 8,143 7,250
Other operating expenses............................ 723 734 2,140 2,102
General and administrative.......................... 352 400 1,257 1,217
----------- ----------- ----------- -----------
Total expenses........................................... 8,264 8,136 25,752 22,595
----------- ----------- ----------- -----------
Income from operations.............................. 2,725 2,491 7,316 8,421
----------- ----------- ----------- -----------
Provision for loss on real estate investment -- 996 -- 996
Income before gains on sales
of real estate investments 2,725 1,495 7,316 7,425
----------- ----------- ----------- -----------
Gains on sales of real estate investments................ 47 70 47 5,448
----------- ----------- ----------- -----------
Net income........................................ $ 2,772 $ 1,565 $ 7,363 $ 12,873
----------- ----------- ----------- -----------
Per share data:
Income from operations........................... $ 0.161 $ 0.149 $ 0.435 $ 0.505
----------- ----------- ----------- -----------
Income before gains on sales of
real estate investments investments............ $ 0.161 $ 0.090 $ 0.435 $ 0.445
----------- ----------- ----------- -----------
Net income....................................... $ 0.164 $ 0.094 $ 0.438 $ 0.772
----------- ----------- ----------- -----------
Cash dividends paid.............................. $ 0.28 $ 0.28 $ 0.84 $ 0.84
----------- ----------- ----------- -----------
Weighted average number of shares
outstanding........................................ 16,955,262 16,697,659 16,824,070 16,670,568
----------- ----------- ----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Shareholders' Equity
Nine Months Ended September 30, 1995 and
Year Ended December 31, 1994
(Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
Shares of Accumulated
Beneficial Interest Dividends Total
----------------------------- in Excess Shareholders'
Number Amount of Net Income Equity
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, January 1, 1994 . . . . . . . . . . . . . . . 16,645,791 $236,178 $(31,240) $204,938
Net proceeds from issuance of shares . . . . . . . . . 63,740 834 -- 834
Debenture redemptions. . . . . . . . . . . . . . . . . 25,001 329 -- 329
Net income . . . . . . . . . . . . . . . . . . . . . . -- -- 15,266 15,266
Cash dividends paid. . . . . . . . . . . . . . . . . . -- -- (18,683) (18,683)
---------- -------- --------- ---------
Balance, December 31, 1994 . . . . . . . . . . . . . . 16,734,532 237,341 (34,657) 202,684
Net proceeds from issuance of shares . . . . . . . . . 43,575 514 -- 514
Debenture redemptions. . . . . . . . . . . . . . . . . 190,905 2,140 -- 2,140
Net income . . . . . . . . . . . . . . . . . . . . . . -- -- 7,363 7,363
Cash dividends paid. . . . . . . . . . . . . . . . . . -- -- (14,129) (14,129)
---------- -------- --------- ---------
BALANCE, SEPTEMBER 30, 1995. . . . . . . . . . . . . . 16,969,012 $239,995 $(41,423) $198,572
---------- -------- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1995 1994
---------- ---------
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . $ 7,363 $ 12,873
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . . 8,143 7,250
Amortization of deferred debt issuance costs . . . . . 294 221
Gains on sales of real estate investments. . . . . . . (47) (5,448)
Decrease (increase) in accounts receivable
and other assets. . . . . . . . . . . . . . . . . . 402 (291)
Increase in deferred rent receivable . . . . . . . . . (751) (497)
Decrease in interest payable . . . . . . . . . . . . . (841) (828)
Increase in prepaid rents, security deposits
and other liabilities . . . . . . . . . . . . . . . 448 1,042
Provision for loss on real estate investment -- 996
--------- ---------
Net cash provided by operating activities. . . . . . . 15,011 15,318
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of real estate investments. . . . . . . 168 23,960
Acquisitions of real estate investments . . . . . . . . . . (3,312) (60,185)
Funds escrowed pending acquisition. . . . . . . . . . . . . (168) (4,466)
Improvements of real estate investments . . . . . . . . . . (2,611) (2,174)
Recovery of investments in direct financing leases. . . . . 174 151
Proceeds from payoff of mortgage loan . . . . . . . . . . . -- 2,809
--------- ---------
Net cash used in investing activities . . . . . . . . (5,749) (39,905)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances on bank line of credit . . . . . . . . . . . . . . 28,950 38,756
Principal payments on bank line of credit . . . . . . . . . (24,445) (49,730)
Principal payments on real estate loan payable. . . . . . . (51) (55)
Redemption of convertible debentures. . . . . . . . . . . . -- (4)
Net proceeds from issuance of shares. . . . . . . . . . . . 514 645
Proceeds from senior notes offering . . . . . . . . . . . . -- 49,855
Senior notes issuance costs . . . . . . . . . . . . . . . . -- (509)
Cash dividends paid . . . . . . . . . . . . . . . . . . . . (14,129) (14,002)
--------- ---------
Net cash (used in) provided by financing activities. . (9,161) 24,956
--------- ---------
Net increase in cash and cash equivalents. . . . . . . 101 369
Cash and cash equivalents, at the beginning of the period. . . . $ 648 $ 328
--------- ---------
Cash and cash equivalents, at the end of the period. . . . . . . $ 749 $ 697
--------- ---------
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest . . . . . . . $ 9,237 $ 7,858
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Notes to Financial Statements
September 30, 1995
(Unaudited)
Note A: BASIS OF PRESENTATION
The financial statements included in this report have been prepared pursuant to
the rules of the Securities and Exchange Commission. Certain information and
footnote disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules. Interim results are not necessarily indicative
of results for a full year. Amounts presented in this report for 1994 are taken
from the Trust's audited financial statements included in its 1994 annual report
on Form 10-K or its unaudited financial statements included in its September 30,
1994 Form 10-Q.
It is suggested that these financial statements be read in conjunction with the
audited financial statements and notes thereto included in the Trust's latest
annual report on Form 10-K. When necessary, reclassifications have been made to
prior period balances to conform to current period presentation.
Note B: PROPERTY ACQUISITION AND DISPOSITIONS
In August, 1995, the Trust sold, at a gain of $47,000, a 55,000 square foot
portion of undeveloped land adjacent to its Elko, Nevada shopping center.
At September 30, 1995, the Trust owned 62 income producing properties, totaling
4.8 million square feet. Overall occupancy for the Trust's 62 properties at
September 30, 1995, was 93.3%, an increase from the December 31, 1994 occupancy
rate of 91.7% and from the September 30, 1994 occupancy rate of 91.4%. For the
Trust's portfolio of fifty retail properties at September 30, 1995, the
occupancy rate was 93.1%. Occupancy for the Trust's ten commercial properties
was 93.1% at September 30, 1995. The Trust's two industrial properties remained
at 100% occupancy.
Note C: CAPITAL EXPENDITURES
It is the Trust's practice to capitalize certain costs which exceed $4,000 and
are associated with improvement and rental of real estate investments.
Capitalized costs include third party leasing commissions, tenant improvements
and common area improvements. For the three months ended September 30, 1995,
the Trust capitalized $1,128,000 of such expenditures. This amount is comprised
of $181,000 of "build to suit" capital improvements; $134,000 of capitalized
costs incurred in connection with the leasing of previously unleased space;
$564,000 of capitalized costs incurred in connection with previously leased
space; and $249,000 of capitalized costs which relate to improvements to common
areas.
The Trust's in-house leasing department costs, including related legal and
accounting costs, are expensed as incurred.
7
<PAGE>
Note D: DEFERRED RENTAL RECEIVABLE
In compliance with FASB 13, the Trust has recognized deferred rental receivable
in the amounts of $258,000 and $221,000 for the quarter ended September 30, 1995
and 1994, respectively.
Note E: CONVERTIBLE DEBENTURES
During the quarter ended September 30, 1995, $96,000 of the Trust's convertible
debentures were redeemed in accordance with the limited mandatory redemption
provisions of the convertible debentures. The Trust elected to exchange these
debentures for 8,334 shares of beneficial interest. Net of the convertible
debentures deferred issuance costs of $3,000, shareholders' equity increased by
$93,000 as a result of the redemptions.
Note F: DIVIDEND REINVESTMENT PLAN
In accordance with the Trust's Dividend Reinvestment Plan, the Trust received
$179,000 and issued 15,527 shares of beneficial interest during the quarter
ended September 30, 1995.
Note G: FUNDS FROM OPERATIONS
In 1991, the National Association of Real Estate Investment Trusts (NAREIT)
adopted a definition of Funds From Operations (FFO) in order to promote an
industry-wide standard measure of REIT operating performance. The 1991
definition is as follows: "FUNDS FROM OPERATIONS means net income (computed in
accordance with generally accepted accounting principles), excluding gains or
losses from debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect funds from operations on the same basis."
In accordance with the 1991 definition, Western calculates FFO for the three
months and nine months ended September 30, 1995 and 1994, respectively, as
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C>
Net Income $ 2,772 $ 1,565 $ 7,363 $ 12,873
Less: (Gains) losses on sales of
of real estate investments (47) 393 (47) (4,985)
Plus: Real property depreciation 2,473 2,410 7,345 6,617
Amortization of tenant
improvement costs 176 110 458 324
Amortization of leasing
commissions costs 71 79 236 183
Personal property depreciation 27 43 104 126
Amortization of deferred
debt issuance costs 96 108 294 221
----------- ----------- ----------- ------------
Funds from Operations $ 5,568 $ 4,708 $ 15,753 $ 15,359
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
</TABLE>
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
The Trust anticipates that cash flows provided by operations and other sources
available to the Trust will continue to provide adequate funds for all current
principal and interest payments as well as dividend payments in accordance with
REIT requirements. Cash on hand, borrowings under its existing bank line of
credit, as well as other debt and equity alternatives, are expected to provide
the necessary funds to achieve future growth. The Trust has only one loan
secured by one of its properties. Additionally, the Trust jointly owns one
property where the co-owner is obligated under a note that is secured by the
property.
As of September 30, 1995, the Trust had approximately $32 million available
under its $60 million bank line of credit. This facility, which has certain
covenants (including minimum shareholders' equity, maximum ratio of debt to net
worth and income coverage requirements), could be used to fund acquisitions and
other cash requirements. The interest rate on the bank line of credit is either
LIBOR plus 1.6% or the participating banks' reference rate, at the Trust's
election. This facility expires May 31, 1996, and the Trust intends to renew it
before the expiration date.
Any incurrence of additional debt would be subject to limitations imposed by the
indenture executed in connection with the senior notes and the Trust's bank line
of credit.
As of September 30, 1995, the Trust has entered into several new leases which
call for approximately $5.7 million in future real estate improvements and
leasing commissions. These expenditures will be paid from operating cash flows
and borrowings under the bank line of credit. Three of these leases will expand
the Trust's gross leasable area by 56,500 square feet.
RESULTS OF OPERATIONS
COMPARISON OF QUARTER ENDED SEPTEMBER 30, 1995 AND 1994
Funds From Operations (1991 NAREIT definition) increased $860,000, or 18%, to
$5,568,000 for the three months ended September 30, 1995, from $4,708,000 for
the comparable period in 1994. This increase is primarily due to increased
minimum rents and the absence of a third quarter 1994 loss resulting from a
provision for environmental costs relating to the Oakland, California property
offset in part, by increased interest expense. The Trust, along with most
industry analysts, considers Funds From Operations to be an appropriate
supplemental measure of the operating performance of an equity REIT. Funds From
Operations does not replace net income as a measure of performance or net cash
provided by operating activities as a measure of liquidity.
Minimum rents increased $616,000, or 7%, to $9,578,000 for the three months
ended September 30, 1995, from $8,962,000 for the comparable period in 1994.
This increase primarily reflects increases achieved from increased occupancy as
well as two acquisitions completed since September 30, 1994, partially offset by
the Safeway lease expiration (September 30, 1994) on the Oakland property and
the subsequent sale of that property (December 30, 1994).
9
<PAGE>
Income from operations increased $234,000, or 9%, to $2,725,000 or $0.161 per
share, from $2,491,000 or $0.149 per share for the third quarter of 1994. The
major components of this increase are increased minimum rents offset, in part,
by increased interest and depreciation expense.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Funds From Operations (1991 NAREIT definition) increased $394,000 to
$15,753,000. This is a 3% increase from $15,359,000 earned in the comparable
period of 1994.
Minimum rents for the nine months ended September 30, 1995, were $28 million, a
$2.9 million increase from the same period in 1994. This 11% increase is
generally due to increases achieved from (i) the Trust's seven acquisitions
during 1995 and 1994, partially offset by the five dispositions in 1994 and (ii)
occupancy gains during the past year.
Recoveries from tenants increased $619,000, or 17%, to $4.3 million for the nine
months ended September 30, 1995, from $3.7 million for the comparable period in
1994. This increase primarily results from the Trust's 1995 and 1994
acquisitions and increases in occupancy.
Other income for the nine months ended September 30, 1995, was $410,000, a $1.4
million decrease from the comparable period in 1994. The contributing factors
to this decrease were (i) a $600,000 lease termination fee recorded in 1994 (ii)
investment income earned in 1994 from the senior notes net proceeds prior to the
use of these proceeds for several 1994 acquisitions and (iii) mortgage interest
income earned on a note retired during the second quarter of 1994.
Interest expense increased $1.4 million to $8.7 million for the nine months
ended September 30, 1995. This 20% increase over the 1994 amount of $7.3
million primarily results from increased borrowings under the Trust's bank line
of credit, and the senior note interest for a full nine months in 1995 compared
to 7-1/2 months in 1994.
Property operating costs were $5.5 million during the nine months ended
September 30, 1995. This is a $748,000, or 16%, increase over the same period
in 1994 of $4.8 million. This increase results primarily from the Trust's 1995
and 1994 acquisitions.
Depreciation and amortization expense increased $893,000 to $8.1 million for the
nine months ended September 30, 1995, from $7.3 million for the nine months
ended September 30, 1994. The increase results from a net increase in the
depreciable basis of the Trust's portfolio of real estate investments due to
additions made by the Trust since the beginning of 1994, net of dispositions.
Income from operations was $7.3 million, or $0.435 per share, for the nine
months ended September 30, 1995, a $1.1 million decrease from the comparable
1994 figure of $8.4 million, or $0.505 per share. The primary reasons for this
decrease are decreased other income, increased property operating costs,
increased interest and depreciation expense, partially offset by increased
minimum rents and increased recoveries from tenants.
10
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1. THROUGH 5. None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(numbered in accordance with Item 601 of Regulation S-K)
(3) Declaration of Trust, as amended (filed as Exhibit 3.1 to
Registration Statement on Form S-3 No. 33-22893 and
incorporated herein by reference).
(4.1) Form of Indenture relating to the 8% Convertible Debentures
(filed as Exhibit 4.1 to Registration Statement on Form S-3
No. 33-22893 and incorporated herein by reference).
(4.2) Form of Indenture relating to the Senior Notes (filed as
Exhibit 4.1 to Registration Statement on Form S-3 No. 33-71270
and incorporated herein by reference).
(4.3) Form of Senior Notes (filed as Exhibit 4.2 to Registration
Statement on Form S-3 No. 33-71270 and incorporated herein by
reference).
(10.1)* Trust's Nonqualified Stock Option Plan (filed as Exhibit 4.2
to Registration Statement on Form S-8 No. 33-22893 and
incorporated herein by reference).
(10.2)* Trust's Trustee Emeritus Plan (filed as an Exhibit to Proxy
Statement dated March 25, 1986 and incorporated herein by
reference).
(27) Financial Data Schedule
(b) Reports on Form 8-K.
None.
__________
* Management contract or compensatory plan or arrangement.
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WESTERN INVESTMENT REAL ESTATE TRUST
(Registrant)
By: /s/ Dennis D. Ryan
--------------------------------
Dennis D. Ryan
Executive Vice President,
Chief Financial Officer
and Trustee
Dated: November 7, 1995
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
AND BALANCE SHEET AT SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 749
<SECURITIES> 0
<RECEIVABLES> 0<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 394454
<DEPRECIATION> 58605
<TOTAL-ASSETS> 344919
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 142858
<COMMON> 239995
0
0
<OTHER-SE> (41423)<F3>
<TOTAL-LIABILITY-AND-EQUITY> 344919
<SALES> 0
<TOTAL-REVENUES> 33068
<CGS> 0
<TOTAL-COSTS> 7662<F4>
<OTHER-EXPENSES> 9400<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8690
<INCOME-PRETAX> 7316
<INCOME-TAX> 0
<INCOME-CONTINUING> 7316
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7363
<EPS-PRIMARY> 0.438
<EPS-DILUTED> 0.438<F6>
<FN>
<F1>AMOUNT INSIGNIFICANT
<F2>BALANCE SHEET IS NOT CLASSIFIED
<F3>AMOUNT REPRESENTS ACCUMULATED DIVIDENDS IN EXCESS OF NET INCOME.
<F4>AMOUNT COMPRISED OF PROPERTY OPERATING COSTS ($5,522) AND OTHER OPERATING
EXPENSES ($2,140)
<F5>AMOUNT COMPRISED OF DEPRECIATION EXPENSE ($8,143) AND GENERAL AND
ADMINISTRATIVE EXPENSE ($1,257).
<F6>EXERCISE OF THE OUTSTANDING STOCK OPTIONS WOULD NOT HAVE MATERIAL DILUTIVE
EFFECT ON EARNINGS PER SHARE.
</FN>
</TABLE>
