<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACTION OF 1934
For the Quarter ended MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 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 - 16,972,496 shares as of March 31,
1996
1
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
INDEX TO 10-Q
PART I. FINANCIAL INFORMATION Page
----
Item 1. Financial Statements (unaudited)
Balance Sheets - March 31, 1996 and December 31, 1995 3
Statements of Income - Three months ended March 31, 1996
and 1995 4
Statements of Shareholders' Equity - Three months ended
March 31, 1996 and year ended December 31, 1995 5
Statements of Cash Flows - Three months ended March 31,
1996 and 1995 6
Notes to Financial Statements 7 - 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 13
PART II. OTHER INFORMATION 14
SIGNATURE 15
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
WESTERN INVESTMENT REAL ESTATE TRUST
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
ASSETS March 31, December 31,
1996 1995
----------------------------
(In thousands)
<S> <C> <C>
Real estate investments:
Real estate owned . . . . . . . . . . . . . . . . . . . . $397,523 $395,800
Less accumulated depreciation and amortization. . . . . . (63,890) (61,249)
-------- --------
Net real estate investments. . . . . . . . . . . . . 333,633 334,551
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . 730 657
Accounts receivable and other assets . . . . . . . . . . . . . 6,341 6,868
Deferred long-term debt issuance costs, net. . . . . . . . . . 2,438 2,495
-------- --------
$343,142 $344,571
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank line of credit. . . . . . . . . . . . . . . . . . . . . . $ 29,425 $ 29,250
Convertible debentures . . . . . . . . . . . . . . . . . . . . 63,393 63,433
Senior notes, net. . . . . . . . . . . . . . . . . . . . . . . 49,886 49,882
Real estate loan payable . . . . . . . . . . . . . . . . . . . 1,276 1,294
-------- --------
143,980 143,859
Interest payable . . . . . . . . . . . . . . . . . . . . . . . 1,930 1,641
Prepaid rents and security deposits. . . . . . . . . . . . . . 1,273 1,320
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . 1,096 952
-------- --------
Total liabilities . . . . . . . . . . . . . . . . . . . . 148,279 147,772
-------- --------
Shareholders' equity:
Shares of beneficial interest, no par value,
unlimited share authorization.
Issued and outstanding:
March 31, 1996 - 16,972,496 shares;
December 31, 1995 - 16,972,496 shares. . . . . . . . 240,034 240,034
Accumulated dividends in excess of net income . . . . . . (45,171) (43,235)
-------- --------
Commitments and contingencies (Notes E and F)
Total shareholders' equity. . . . . . . . . . . . . . . . 194,863 196,799
-------- --------
$343,142 $344,571
-------- --------
-------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1996 1995
----------------------------------
(In thousands,
except share and per share data)
<S> <C> <C>
REVENUES:
Minimum rents . . . . . . . . . . . . . . . . . . . . . . $ 9,539 $ 8,982
Percentage rents. . . . . . . . . . . . . . . . . . . . . 154 138
Recoveries from tenants . . . . . . . . . . . . . . . . . 1,283 1,183
Other income. . . . . . . . . . . . . . . . . . . . . . . 195 187
---------- ----------
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . 11,171 10,490
---------- ----------
EXPENSES:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . 2,843 2,899
Property operating costs. . . . . . . . . . . . . . . . . 1,594 1,611
Depreciation and amortization . . . . . . . . . . . . . . 2,747 2,681
Other operating expenses. . . . . . . . . . . . . . . . . 693 706
General and administrative. . . . . . . . . . . . . . . . 478 432
---------- ----------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . 8,355 8,329
---------- ----------
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 2,816 $ 2,161
---------- ----------
---------- ----------
Per share data:
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 0.166 $ 0.129
---------- ----------
Cash dividends paid . . . . . . . . . . . . . . . . . . . $ 0.28 $ 0.28
---------- ----------
Weighted average number of shares outstanding. . . . . . . . . 16,972,496 16,742,965
---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Shareholders' Equity
(Unaudited)
Three Months Ended March 31, 1996 and
Year Ended December 31, 1995
(In thousands, except share data)
<TABLE>
<CAPTION>
Accumulated
Shares of Dividends Total
Beneficial Interest in Excess Share-
------------------- of Net holders'
Number Amount Income Equity
-----------------------------------------------------
<S> <C> <C> <C> <C>
Balance, January 1, 1995 . . . . . . . . . . . . . 16,734,532 $237,341 $(34,657) $202,684
Net proceeds from issuance of shares . . . . . . . 43,575 514 -- 514
Debenture redemptions. . . . . . . . . . . . . . . 194,389 2,179 -- 2,179
Net income . . . . . . . . . . . . . . . . . . . . -- -- 10,304 10,304
Cash dividends paid. . . . . . . . . . . . . . . . -- -- (18,882) (18,882)
---------- ---------- ---------- ----------
Balance, December 31, 1995 . . . . . . . . . . . . 16,972,496 240,034 (43,235) 196,799
Net income . . . . . . . . . . . . . . . . . . . . -- -- 2,816 2,816
Cash dividends paid. . . . . . . . . . . . . . . . -- -- (4,752) (4,752)
---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1996. . . . . . . . . . . . . . 16,972,496 $240,034 $(45,171) $194,863
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1996 1995
--------------------
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,816 $ 2,161
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 2,747 2,681
Amortization of deferred debt issuance costs. . . . . . . . . . . . . . . 97 100
Decrease in accounts receivable and other assets. . . . . . . . . . . . . 603 356
Increase in deferred rent receivable. . . . . . . . . . . . . . . . . . . (155) (174)
Increase (decrease) in interest payable . . . . . . . . . . . . . . . . . 289 (1,005)
Increase in prepaid rents and security deposits
and other liabilities. . . . . . . . . . . . . . . . . . . . . . . . 97 895
--------- ---------
Net cash provided by operating activities . . . . . . . . . . . . . . . . 6,494 5,014
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Recovery of acquisition costs (acquisition of real estate investment) . . . 26 (3,005)
Improvements of real estate investments . . . . . . . . . . . . . . . . . . (1,876) (982)
Recovery of investment in direct financing leases . . . . . . . . . . . . . 64 56
--------- ---------
Net cash used in investing activities . . . . . . . . . . . . . . . . . . (1,786) 3,931)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances on bank line of credit . . . . . . . . . . . . . . . . . . . . . . 9,000 11,700
Principal payments on bank line of credit . . . . . . . . . . . . . . . . . (8,825) (8,295)
Principal payments on real estate loan payable. . . . . . . . . . . . . . . (18) (16)
Redemption of convertible debentures. . . . . . . . . . . . . . . . . . . . (40) --
Net proceeds from issuance of shares. . . . . . . . . . . . . . . . . . . . -- 166
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,752) (4,687)
--------- ---------
Net cash used in financing activities . . . . . . . . . . . . . . . . . . (4,635) (1,132)
--------- ---------
Net increase (decrease) in cash and cash equivalents. . . . . . . . . . . 73 (49)
Cash and cash equivalents, at the beginning of the period. . . . . . . . . . . $ 657 $ 648
--------- ---------
--------- ---------
Cash and cash equivalents, at the end of the period. . . . . . . . . . . . . . $ 730 $ 599
--------- ---------
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest. . . . . . . . . . . . . . . . . . $ 2,490 $ 3,804
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Notes to Financial Statements
March 31, 1996
(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.
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: REAL ESTATE INVESTMENTS
The Trust adopted Financial Accounting Standards Board Statement (FAS) 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," effective January 1, 1996. Accordingly, in the normal course
of the Trust's business, when it determines that a property should be disposed
of, the Trust will discontinue the periodic depreciation of that property.
Additionally, whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, the recoverability of the
carrying value of that property will be evaluated. If the sum of the
undiscounted, expected future cash flows, exclusive of interest, is less than
the carrying value of that asset, a determination of fair market value of that
asset will be made. If the fair market value is less than the carrying value of
that asset, an impairment charge will be recognized. Adoption of FAS 121 is not
expected to have a material impact on 1996 operating results.
7
<PAGE>
At March 31, 1996, the Trust owned 62 income producing properties, totaling 4.8
million leasable square feet. Included in this total are five properties, which
are being held for sale, totaling 55 thousand leasable square feet with a
combined net book value of $1.5 million.
During March 1996 the Trust entered into an agreement to sell its Santa Rosa,
California, property for $725,000. The Trust anticipates closing this
transaction during the third quarter of 1996.
During April 1996 the Trust sold the Redwood City, California property
(leased to Denny's Restaurant) for $733,000. The Trust recognized a gain on
sale of approximately $560,000. The sales proceeds were used to partially
pay down the bank line of credit.
Occupancy percentages for the Trust's portfolio as of March 31, 1996, December
31, 1995 and March 31, 1995 are as follows:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995 March 31, 1995
-------------- ----------------- --------------
<S> <C> <C> <C>
Retail 93.9% 93.8% 92.6%
Commercial 100.0% 93.1% 93.1%
Industrial 100.0% 100.0% 100.0%
Overall Occupancy 94.2% 93.9% 92.7%
</TABLE>
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 March 31, 1996, the
Trust capitalized $1,876,000 of such expenditures (of which $1,813,000 relates
to improvements, and $63,000 to leasing commissions). This amount is comprised
of $1,494,000 of "Build to Suit" capital improvements; $44,000 of capitalized
costs incurred in connection with the leasing of previously unleased space;
$336,000 of capitalized costs incurred in connection with previously leased
space; and $2,000 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.
8
<PAGE>
During the three months ended March 31, 1996, the Trust incurred no Leasing
Commissions or Tenant Improvements costs in connection with lease renewals.
Leasing Commissions and Tenant Improvements for new leases executed during the
three months ended March 31, 1996, consist of the following:
<TABLE>
<CAPTION>
PROPERTY TYPE CAPITALIZED EXPENDITURES ASSOCIATED WITH NEW LEASES
- -------------------------------------------------------------------------------------------------------------------------------
AGGREGATE PER SQUARE AGGREGATE PER SQUARE
AMOUNT FOOT AMOUNT FOOT
------ ---- ------ ----
<S> <C> <C> <C> <C> <C> <C>
SHOPPING Build-to-Suit Leasing
CENTERS & Developments $ 495,000 $ 66.00 Commissions $ 78,912 $ 4.64
RETAIL
PROPERTIES
Tenant
Improvements 72,675 4.53 0 0
----------- --------- ---------- --------
TOTAL Tenant
SHOPPING Improvements &
CENTERS & Build-to-Suit Leasing
RETAIL Developments 567,675 24.10 Commissions $ 78,912 $ 4.64
PROPERTIES ----------- --------- ---------- --------
----------- --------- ---------- --------
COMMERCIAL Tenant Leasing
Improvements $ 99,080 $ 8.00 Commissions $ 27,179 $ 2.19
----------- --------- ----------- ---------
----------- --------- ----------- ---------
TOTAL Build-to-Suit Leasing
ALL Developments $ 495,000 $ 66.00 Commissions $ 106,091 $ 3.61
PROPERTIES ----------- --------- ------------ ---------
----------- --------- ------------ ---------
Tenant
Improvements $ 171,755 $ 6.04
----------- ---------
----------- ---------
</TABLE>
Note D: DEFERRED RENTAL RECEIVABLE
The Trust recognizes income from deferred rental receivable in accordance with
FAS 13. Deferred rental receivable recognized as income was $155,000 and
$174,000 for the quarter ended March 31, 1996 and 1995, respectively.
9
<PAGE>
Note E: BANK LINE OF CREDIT
At March 31, 1996, the Trust had an outstanding balance of $29,425,000 under its
$60 million bank line of credit.
On April 26, 1996, the Trust entered into a two-year unsecured $45 million bank
line of credit. The $45 million bank line of credit replaces its $60 million
facility, which was scheduled to mature May 31, 1996. The interest rate on the
$45 million bank line of credit is based on the London Interbank Offered Rate
(LIBOR) plus 1.6%, or the participating banks' reference rate, at the Trust's
election. In addition, the Trust pays an annual fee of $112,500. The $45
million bank line of credit matures May 31, 1998, at which time the Trust
intends to renew or replace it.
The Trust elected to lower the commitment amount on the bank line of credit from
$60 million to $45 million in order to avoid paying a commitment fee on the
portion of the line of credit the Trust does not intend to use.
Note F: CONVERTIBLE DEBENTURES
During the quarter ended March 31, 1996, $40,000 of the Trust's convertible
debentures were presented for mandatory redemption on behalf of deceased
debenture holders, in accordance with the provisions of the convertible
debentures. The Trust elected to redeem the debentures for cash.
During the quarter ended March 31, 1995, $132,000 of the Trust's convertible
debentures were presented for mandatory redemption on behalf of deceased
debenture holders, in accordance with the provisions of the convertible
debentures. The Trust elected to exchange 10,494 shares of beneficial
interest for these debentures. Net of the convertible debentures deferred
issuance costs of $5,000, shareholders' equity increased by $127,000 as a
result of the redemption.
Note G: DIVIDEND REINVESTMENT PLAN
During the quarter ended March 31, 1996, in accordance with the Trust's
Dividend Reinvestment Plan, $185,000 in dividend reinvestment and
shareholders' additional cash payments were used to purchase shares in
the open market for the participating shareholders.
During the quarter ended March 31, 1995, the Trust received $166,000 and issued
13,577 shares of beneficial interest.
10
<PAGE>
Note H: FUNDS FROM OPERATIONS
The Trust considers Funds From Operations to be an alternate measure of the
performance of an equity REIT since such measure does not recognize
depreciation and amortization of real estate assets as operating expenses.
The Trust believes that reductions for these charges are not meaningful in
evaluating income-producing real estate, which historically has not
depreciated. The National Association of Real Estate Investment Trusts'
(NAREIT) defines Funds From Operations as net income plus depreciation and
amortization of real estate assets, less gains and losses on sales of
property and securities. Funds From Operations does not represent cash flows
from operations as defined by generally accepted accounting principles and
should not be considered a substitute for net income as an indicator of the
Trust's operating performance or for cash flows as a measure of liquidity.
Funds From Operations, calculated in accordance with NAREIT 1995 guidelines,
for the three months ended March 31, 1996 and 1995, respectively, is as
follows:
<TABLE>
<CAPTION>
Three months Three months
ended ended
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Net Income $ 2,816 $ 2,161
Plus: Real property depreciation 2,469 2,428
Amortization of tenant improvement costs 172 142
Amortization of leasing commissions costs 79 69
-------- ---------
Funds From Operations $ 5,536 $ 4,800
-------- --------
-------- --------
</TABLE>
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Certain statements in Management's Discussion and Analysis of Financial
Condition and Results of Operations, constitute "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such "forward-looking" statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of the Trust to be materially different from any
future results, performance, or achievements expressed or implied by such
"forward-looking" statements.
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 qualification requirements. Cash on hand, borrowings under the existing
bank line of credit, as well as other debt and equity alternatives, will 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 two
properties where the co-owner is obligated under a note that is secured by the
property.
The Trust's indenture executed in connection with the senior notes and the
Trust's bank line of credit contain certain covenants (including minimum
shareholders' equity, maximum ratio of debt to net worth and income coverage
requirements) which impose certain limitations on the incurrence of debt and
other restrictions.
On April 26, 1996, the Trust obtained a two-year unsecured $45 million bank
line of credit which replaces the previous $60 million facility. The Trust
elected to lower the commitment amount on the bank line of credit from
$60 million to $45 million in order to avoid paying a commitment fee on the
portion of the line of credit the Trust does not intend to use. The
$45 million facility can be used to fund acquisitions and other cash
requirements. The interest rate under the facility is either LIBOR plus 1.6%
or the participating banks' reference rate, at the Trust's election. The bank
line of credit expires May 31, 1998, at which time the Trust intends to
replace or renew it.
As of March 31, 1996, the Trust has entered into several new leases which call
for approximately $3.8 million in future real estate improvements and leasing
commissions. These expenditures will be paid from operating cash flows or
borrowings under the line of credit.
FUNDS FROM OPERATIONS
Funds From Operations (using the 1995 NAREIT definition) increased $736,000,
or 15%, to $5,536,000 for the three months ended March 31, 1996, from
$4,800,000 for the comparable period in 1995. The major components of this
increase are increased minimum rents and increased recoveries from tenants,
which result from increased revenue under existing leases and increased
occupancy. 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.
12
<PAGE>
RESULTS OF OPERATIONS
COMPARISON OF QUARTER ENDED MARCH 31, 1996 AND 1995
Net income increased $655,000, or 30% to $2,816,000 or $0.17 per share, from
$2,161,000 or $0.13 per share for the comparable period in 1995. The major
components of this increase are increased minimum rents and increased recoveries
from tenants, both of which result from increased revenue under existing leases
and increased occupancy. The overall occupancy rate for the Trust's portfolio
was 94.2% as of March 31, 1996 and 92.7% as of March 31, 1995.
Minimum rents increased $557,000, or 6%, to $9,539,000 for the three months
ended March 31, 1996, from $8,982,000 for the comparable period in 1995.
Recoveries from tenants increased $100,000 to $1,283,000 from $1,183,000, an 8%
increase.
13
<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. 33-27016 and
incorporated herein by reference).
(10.2)* Trust's Trustee Emeritus Plan (filed as an Exhibit to Proxy
dated Statement dated March 25, 1986 and incorporated herein
by reference).
(b) Reports on Form 8-K.
None.
- ----------
* Management contract or compensatory plan or arrangement.
14
<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: May 8, 1996
-----------------------
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND BALANCE SHEET AT MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 730
<SECURITIES> 0
<RECEIVABLES> 0<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 397,523
<DEPRECIATION> 63,890
<TOTAL-ASSETS> 343,142
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 143,980
0
0
<COMMON> 240,034
<OTHER-SE> (45,171)<F3>
<TOTAL-LIABILITY-AND-EQUITY> 343,142
<SALES> 0
<TOTAL-REVENUES> 11,171
<CGS> 0
<TOTAL-COSTS> 2,287<F4>
<OTHER-EXPENSES> 3,225<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,843
<INCOME-PRETAX> 2,816
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,816
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,816
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17<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 COST ($1,594) AND OTHER OPERATING
EXPENSES ($693)
<F5>AMOUNT COMPRISED OF DEPRECIATION EXPENSE ($2,747) AND GENERAL AND
ADMINISTRATIVE EXPENSE ($478)
<F6>EXERCISE OF THE OUTSTANDING STOCK OPTIONS WOULD NOT HAVE MATERIAL EFFECT ON
EARNINGS PER SHARE
</FN>
</TABLE>
