SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File Number 0-7716
CENTURY REALTY TRUST
(Exact name of Registrant as specified in its charter)
INDIANA 35-1284316
(State or other jurisdiction (I.R.S. Employer
Incorporation or organization) Identification No.)
419 Chamber of Commerce Building 46204
Indianapolis, Indiana (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (317)632-5467
Indicate by check mark whether this 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 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 latest practicable date.
Shares of Beneficial Interest, no par value 1,381,351 shares
<TABLE>
<CAPTION>
BALANCE SHEETS
Century Realty Trust
June December
30, 1995 31, 1994
___________ ___________
Unaudited
<S> <C> <C>
Assets
Real estate investments: <F1>
Land $2,068,658 $1,670,658
Buildings 32,681,196 26,153,031
Equipment 869,196 735,063
Allowances for depreciation (6,168,268) (5,662,588)
___________ ___________
29,450,782 22,896,164
Net investment in direct financing leases 501,741 519,505
___________ ___________
29,952,523 23,415,669
Cash and cash equivalents 87,586 58,491
Certificates of deposit 195,782 197,190
Accounts and accrued income receivable 258,679 164,985
Undeveloped land 99,675 99,675
Other assets 294,608 244,708
___________ ___________
$30,888,853 $24,180,718
___________ ___________
___________ ___________
Liabilities and shareholders' equity
Liabilities:
Mortgage notes payable <F1> <F2> $19,881,342 $14,606,780
Notes payable - other <F1> 1,145,762 -
Accounts payable and accrued compensation 370,094 217,163
Accrued interest 67,180 48,145
State income and property taxes 976,510 803,194
Tenants' security deposits and unearned rent 437,669 346,675
___________ ___________
22,878,557 16,021,957
Shareholders' equity:
Shares of Beneficial Interest, no par
value-authorized 5,000,000 shares, issued
1,458,765 shares, including 77,414 shares in
treasury 5,645,289 5,645,289
Undistributed income other than from
gain on the sale of real estate 1,578,633 1,727,098
Undistributed net realized gain from the
sale of real estate 1,316,078 1,316,078
Cost of treasury shares (529,704) (529,704)
___________ ___________
8,010,296 8,158,761
___________ ___________
$30,888,853 $24,180,718
___________ ___________
___________ ___________
<FN>
FEDERAL INCOME TAXES
The Trust intends to continue as a real estate investment trust
as defined in the Internal Revenue Code and to distribute its
taxable income. Assuming compliance with other requirements of
the Code, income distributed will not be taxable to the Trust.
Accordingly, no provision for federal income taxes is made in
the financial statements.
<F1> REAL ESTATE INVESTMENT TRANSACTIONS
On March 31, 1995, the Trust purchased the Fox Run Apartments,
a 256-unit garden apartment property in Indianapolis, Indiana.
The purchase price was $7.2 million including proration,
credits and assumed liabilities of approximately $640,000. The
balance of the purchase price consisted of a new 9.5%, 10-year
first mortgage loan for $5.4 million from a bank, and a one-year
8% note payable to the seller for $600,000 payable, at the
option of the Trust, in its shares of beneficial interest valued
at the then fair market value. Based on current market value
($8.875 per share) approximately 67,700 shares could be issued
in satisfaction of the note. To complete the purchase, the
Trust borrowed approximately $550,000 from a bank which it
expects to repay with proceeds from refinancing other real
estate.
At the close of business on March 31, 1994, the Trust purchased
the Eagle Creek Park apartments, a 188-unit apartment property
in Indianapolis, Indiana, as a replacement for the Greenbriar
apartments that it sold in October, 1993. A qualified
intermediary held the sale proceeds until the Trust purchased
replacement property. The purchase price for the Eagle Creek
Park apartments was $6.1 million. Besides $259,000 disbursed by
the intermediary, the Trust paid $674,300 cash and issued 90,953
shares of its Shares of Beneficial Interest worth $773,101
($8.50 per share). The cost basis of the 90,953 shares,
previously classified as treasury shares, was $622,345. Century
also assumed a mortgage loan balance of $4,178,800 and other net
liabilities of $214,700.
<F2> MORTGAGE NOTES PAYABLE
Eight of the Trust's properties are encumbered by mortgage
loans payable in monthly installments totaling approximately $171,500,
including interest at rates ranging from 8.125% to 9.75% per annum, and
which mature from June 4, 1996 to March 31, 2005. The aggregate
amount of scheduled mortgage loan repayments for the third and
fourth quarters of 1995 are $72,175 and $73,451, respectively.
A mortgage loan with a balance of $2 million will
mature on June 4, 1996. That loan provides for the payment of
interest only at the lender's prime rate (currently 8.75%). The
Trust intends to obtain a longer term loan on the mortgaged
property on or before the maturity date in an amount sufficient
to retire the present balance.
</FN>
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Century Realty Trust
Unaudited
Three Months Six Months
Ended June 30 Ended June 30
1995 1994 1995 1994
__________ __________ __________ __________
<S> <C> <C> <C> <C>
Income
Real estate operations:
Rental Income $1,956,820 $1,535,109 $3,535,817 $2,758,364
Income from direct financing 16,427 17,495 32,854 34,990
__________ __________ __________ __________
1,973,247 1,552,604 3,568,671 2,793,354
Less:
Real estate operating expenses 736,479 590,901 1,308,297 1,042,162
Provision for depreciation 276,480 226,605 507,240 414,660
Real estate taxes 195,813 187,767 396,273 346,077
__________ __________ __________ __________
1,208,772 1,005,273 2,211,810 1,802,899
__________ __________ __________ __________
764,475 547,331 1,356,861 990,455
Interest 8,577 6,116 15,447 12,613
Sundry 39,100 19,562 64,727 34,000
__________ __________ __________ __________
812,152 573,009 1,437,035 1,037,068
Expenses
Interest 482,871 315,664 808,456 533,096
State income taxes 36,200 36,175 65,995 59,011
General and administrative 91,908 90,625 186,136 181,884
__________ __________ __________ __________
610,979 442,464 1,060,587 773,991
__________ __________ __________ __________
Net income $201,173 $130,545 $376,448 $263,077
__________ __________ __________ __________
__________ __________ __________ __________
Net income per share of
Beneficial Interest $0.15 $0.10 $0.27 $0.20
__________ __________ __________ __________
__________ __________ __________ __________
Weighted average number
of shares outstanding 1,381,351 1,328,949 1,381,351 1,309,283
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOW
Century Realty Trust
Unaudited
Six Months
Ended June 30
1995 1994
__________ _________
<S> <C> <C>
Operating Activities
Net income $376,448 $263,077
adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 520,087 425,339
Changes in operating assets and liabilities:
Increase in accounts and income
receivable (93,694) (165,237)
Increase in prepaid expenses and other assets (82,307) (5,564)
Increase in accounts payable and accrued expenses 6,187 44,456
Increase (decrease) in tenants' security deposits
and unearned rents 90,994 34,361
__________ _________
Net cash provided by operations 817,715 596,432
Investing Activities
Investment in certificates of deposit (988,789) (994,071)
Proceeds from matured certificates of deposit 990,197 1,292,934
Acquisition of real estate, net of debt assumed<F1> (5,936,913) (708,910)
Purchase of property improvements and replacements (130,927) (153,494)
Principal payments received under leases 17,764 15,628
__________ _________
Net cash used in investing activities (6,048,668) (547,913)
Financing Activities
Proceeds from sale of treasury shares 0 8,750
Short-term bank borrowing <F1> 545,762 500,000
Proceeds from long-term mortgage loans <F1> <F2> 5,368,000 -
Principal payments on mortgage notes payable (125,438) (78,545)
Dividends paid to shareholders (528,276) (464,004)
__________ _________
Net cash provided by (used in) financing activities 5,260,048 (33,799)
__________ _________
Net increase (decrease) in cash and cash equivalents 29,095 14,720
Balance at beginning of period 58,491 159,101
__________ _________
Balance at end of period $87,586 $173,821
__________ _________
__________ _________
<FN>
<F1> REAL ESTATE INVESTMENT TRANSACTIONS
On March 31, 1995, the Trust purchased the Fox Run Apartments,
a 256-unit garden apartment property in Indianapolis, Indiana.
The purchase price was $7.2 million including proration,
credits and assumed liabilities of approximately $640,000. The
balance of the purchase price consisted of a new 9.5%, 10-year
first mortgage loan for $5.4 million from a bank, and a one-year
8% note payable to the seller for $600,000 payable, at the
option of the Trust, in its shares of beneficial interest valued
at the then fair market value. Based on current market value
($8.875 per share) approximately 67,700 shares could be issued
in satisfaction of the note. To complete the purchase, the
Trust borrowed approximately $550,000 from a bank which it
expects to repay with proceeds from refinancing other real
estate.
At the close of business on March 31, 1994, the Trust purchased
the Eagle Creek Park apartments, a 188-unit apartment property
in Indianapolis, Indiana, as a replacement for the Greenbriar
apartments that it sold in October, 1993. A qualified
intermediary held the sale proceeds until the Trust purchased
replacement property. The purchase price for the Eagle Creek
Park apartments was $6.1 million. Besides $259,000 disbursed by
the intermediary, the Trust paid $674,300 cash and issued 90,953
shares of its Shares of Beneficial Interest worth $773,101
($8.50 per share). The cost basis of the 90,953 shares,
previously classified as treasury shares, was $622,345. Century
also assumed a mortgage loan balance of $4,178,800 and other net
liabilities of $214,700.
<F2> MORTGAGE NOTES PAYABLE
Eight of the Trust's properties are encumbered by mortgage
loans payable in monthly installments totaling approximately $171,500,
including interest at rates ranging from 8.125% to 9.75% per annum, and
which mature from June 4, 1996 to March 31, 2005. The aggregate
amount of scheduled mortgage loan repayments for the third and
fourth quarters of 1995 are $72,175 and $73,451, respectively.
A mortgage loan with a balance of $2 million will
mature on June 4, 1996. That loan provides for the payment of
interest only at the lender's prime rate (currently 8.75%). The
Trust intends to obtain a longer term loan on the mortgaged
property on or before the maturity date in an amount sufficient
to retire the present balance.
</FN>
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INVESTMENT ACTIVITIES
The changes in the financial condition of the Trust, and the
results of its operations for the quarter and six months ended
June 30, 1995 and 1994, resulted primarily from investment
property transactions during 1994 and 1995. Within a twelve
month period through March, 1995 the Trust purchased two
apartment properties which resulted in a 49% increase in the
number of apartments owned.
On March 31, 1995, the Trust purchased the Fox Run apartments,
a 256-unit property in Indianapolis, Indiana for $7.2 million
($28,125 / unit). With the addition of Fox Run, the Trust
further increased the number of apartments it owns by 23% to
1,358 units. The addition of Fox Run raised the number of
apartment properties the Trust owns to nine, all of which are
located in Indiana.
On March 31, 1994, the Trust acquired the Eagle Creek Park
apartments, a 188-unit property in Indianapolis, Indiana for
$6.1 million ($32,400 / unit). With that acquisition, the Trust
increased its number of apartment units by 20% to 1,102 units.
Eagle Creek Park apartments was the second of two apartment
properties acquired as like-kind replacement property for an
apartment property that the Trust sold in the fourth quarter of
1993.
FINANCING ACTIVITIES
The purchase of the Fox Run apartments in 1995 was financed by
a combination of long-term and short-term loans. Approximately
75% of the purchase price was paid with proceeds of a new 9.5%,
10-year first mortgage loan from a bank. Short-term financing
included $600,000 of 8% notes payable to the seller due March
31, 1996. The Trust may, at its option, repay all or a portion
of the principal balance of those notes by issuing Shares of
Beneficial Interest of equal market value on or before maturity.
To complete the purchase, the Trust obtained a short-term
unsecured bank loan which it expects to repay with proceeds from
refinancing one or more of its other properties.
In connection with the acquisition of the Eagle Creek Park
apartments in 1994, the Trust assumed an existing mortgage loan
balance of $4.2 million, and issued from treasury, 90,953 shares
of its Shares of Beneficial Interest worth $773,101 ($8.50 /
share).
RESULTS OF OPERATIONS
For the first half of 1995, the Trust reported significant
increases over the comparable 1994 period in both rental income
and income from real estate operations. In spite of a $92,580
increase in the provision for depreciation, reported net income
increased by $113,371. The increase in net income was due
primarily to improved results of operations from the core
properties (properties owned throughout the first half of 1995
and 1994). The two apartment properties acquired since the
beginning of 1994, and financing activities related thereto,
accounted for a decrease in net income of $21,000, after an
increase in the provision for depreciation of $92,500.
For the second quarter, net income of the Trust, as a whole,
increased by $70,600, or 54%, over the comparable quarter of
1994 in spite of a $22,300 decrease attributable to the two
recently acquired properties. Substantially all of the $50,000
increase in provision for depreciation related to the recently
acquired properties.
The seven apartment properties (914 units) that the Trust owned
throughout the first half of 1995 and 1994 reported average
six-month occupancy rates of 96.4% and 95.0% for the two
periods, respectively. Average rental rates increased 3.8% for
those properties over the prior year period. The combined
effect of higher occupancy rates and higher rental rates
resulted in a 5.4% increase in gross revenue from the core group
of apartments. Operating expenses, excluding interest and
depreciation, for the same properties amounted to 46.7% of gross
possible income for the first half of 1995, down from 48.8% for
the prior year period, and amounted to a decrease of .6% in
total operating expenses.
Occupancy rates for the same apartment properties during the
second quarter of 1995 averaged 96%, compared with 95.9% for the
same quarter a year ago. While occupancy rates remained steady,
rental rates increased by an average of 4.2%, combining to
produce a 4.3% increase in gross revenue. Operating expenses
decreased by 4.9% from the second quarter of 1994, to 45.5% of
gross possible income. Decreases in maintenance related
expenses and utilities accounted for most of the decrease.
For the two recently acquired apartment properties, occupancy
rates averaged 95.7% and 95.6% for the second quarter and six
months of 1995, respectively. Operating expenses, as a percent
of gross possible income, for the two properties amounted to
50.3% and 49.3% for the second quarter and six months of 1995,
respectively.
Rental properties other than apartments, which accounted for
less than 4.5% percent of total rental income in the first half
of 1995, produced a 10% increase in net operating income
compared with the prior year. Gross rental income was up
$14,600, or 10.8%, while operating expenses increased by $4,700,
or 13.1%. For the second quarter, rental income increased 13.0%
and operating expenses increased 25.9%, from the year earlier
period, resulting in a $4,400, or 8.6%, increase in net operating
income. Leasing fees and expenses related to tenant turnover
during the second quarter at one of the properties accounted for
most of the increase in expenses.
Due to investing and financing activities during 1994 and 1995,
interest expense was approximately $253,000 higher for the first
half of 1995 than for the prior year half. For the first half
of 1995 interest related to debt incurred and assumed by the
Trust during 1994 and 1995 totaled $349,500, while interest
related to loans outstanding since the beginning of 1994
amounted to $459,000, up $21,500 from the 1994 period. The
$21,500 increase resulted from rate increases applicable to one
variable-rate mortgage loan which provides for interest at the
prime rate.
Investing and financing activities during 1994 and 1995
accounted for $157,200 of the increase in interest expense
between the second quarters of 1994 and 1995. Interest expense
applicable to loans outstanding throughout both second quarter
periods increased $10,000, due to the impact of higher
prevailing prime interest rates during the 1995 period.
State income taxes for the quarter and six months ended June
30, 1994 included $9,300 in Indiana gross income tax applicable
to the market value of shares of beneficial interest reissued in
connection with the acquisition of the Eagle Creek Park
apartments in 1994. The balance of the increases for the
quarter and six months are proportionate to the increases in
gross income during the comparable periods.
FINANCIAL CONDITION AND LIQUIDITY
At June 30, 1995, the Trust held approximately $283,000 in cash
and certificates of deposit. It invests funds in excess of
immediate cash needs in U.S. government securities and
FDIC-insured certificates of deposit. Other than the
requirement for dividends, the Trust has no obligations, nor has
it made any commitments, which will require expenditures in
excess of funds anticipated to be provided by operations during
the remainder of 1995. No transactions or events, other than
the apartment property purchased March 31, 1995, have occurred
to indicate that funds provided by operations during the balance
of 1995 will differ disproportionately from the first half of
the year.
The notes payable, other than mortgage notes, include a
$545,000 unsecured note payable to a bank, and $600,000 of notes
payable to the seller of the Fox Run apartments, all of which
are due March 31, 1996. Management expects to repay the bank
loan with proceeds from new mortgage borrowing on other
properties owned by the Trust, and to issue shares of beneficial
interest with market value of $600,000 to the seller of Fox Run
apartments on or before the specified maturity date.
The Trust intends to continue as a real estate investment
trust, and to distribute all of its earnings. Accordingly, no
provision has been made for federal income taxes. The Trust
makes cash distributions to its shareholders in June and
December each year. In June, 1995, the Trust paid $.38 per
share, and in December, 1994, $.39 per share. In November the
Trustees will determine the amount of, and declare, a dividend
to be paid in mid-December.
INFLATION
Management believes that the direct effects of inflation on the
Trust's operations have been insignificant.
PART II
Item 6(b). No events occurred during the three months ended
June 30, 1995, which would have necessitated the filing of a report on
Form 8K. A form 8K, subsequently amended by a Form 8KA, was filed on
or before April 14, 1995, that reported the purchase of the Fox Run
apartments on March 31, 1995.
MANAGEMENT REPRESENTATIONS
The information furnished in this report, while not audited, includes
all adjustments, in the opinion of management, necessary for a fair
representation of the financial position of Century Realty Trust at June 30,
1995, and December 31, 1994, and the results of its operations and its cash
flow for the three months and six months ended June 30, 1995, and June 30,
1994, in accordance with generally accepted accounting principles
consistently applied. The interim results reported are not necessarily
indicative of expected results for the full year, and should be considered
in conjunction with the audited financial statements contained in the
Trust's 1994 annual report.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CENTURY REALTY TRUST
Date: 8/7/95 By: JOHN I. BRADSHAW, JR
Executive Vice President
and Secretary
Date: 8/7/95 By: DAVID F. WHITE
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEETS, STATEMENTS OF INCOME, AND STATEMENTS OF CASH FLOW AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 88
<SECURITIES> 196
<RECEIVABLES> 259
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 36,121
<DEPRECIATION> 6,168
<TOTAL-ASSETS> 30,889
<CURRENT-LIABILITIES> 0
<BONDS> 19,881
<COMMON> 5,645
0
0
<OTHER-SE> 2,365
<TOTAL-LIABILITY-AND-EQUITY> 30,889
<SALES> 3,536
<TOTAL-REVENUES> 3,649
<CGS> 0
<TOTAL-COSTS> 2,212
<OTHER-EXPENSES> 253
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 808
<INCOME-PRETAX> 376
<INCOME-TAX> 0
<INCOME-CONTINUING> 376
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 376
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
