<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _______________
Commission File Number: 1-8073
CV REIT, INC.
(Exact name of registrant as specified in its charter)
Delaware 59-0950354
(State of Incorporation) (I.R.S. Employer Identification No.)
100 Century Boulevard, West Palm Beach, Florida 33417
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 407-640-3155
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
Common stock, par value New York Stock Exchange
$.01 per share
Securities registered pursuant to Section 12(g) of the Act: None
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
<PAGE> 2
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Mar.31, Dec.31,
Assets 1998 1997
------ -------- --------
Real estate - income producing,
net of accumulated depreciation $ 98,191 $ 71,017
Real estate mortgage notes
receivable 75,388 77,652
Investments in unconsolidated affiliates 3,289 3,284
Cash and cash equivalents (includes
$918 and $915 restricted) 6,480 12,869
Other real estate (net of allowance
for losses of $2,401) 5,451 5,451
Other 3,084 1,654
-------- --------
$191,883 $171,927
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Borrowings $ 85,646 $ 66,281
Accounts payable and other
liabilities 5,565 4,443
Deferred income taxes 7,041 7,041
-------- --------
Total liabilities 98,252 77,765
-------- --------
Minority interests in Operating
Partnership 21,116 21,214
-------- --------
Stockholders' equity:
Common stock, $.01 par-shares authorized
20,000,000; outstanding 7,966,621 80 80
Additional paid-in capital 18,490 18,490
Retained earnings 53,945 54,378
-------- --------
Total stockholders' equity 72,515 72,948
-------- --------
$191,883 $171,927
======== ========
See accompanying notes to consolidated financial statements.
<PAGE> 3
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
Three Months Ended
March 31,
--------------------
1998 1997
--------- ---------
Revenues:
Rent $ 2,794 $ 552
Interest, principally from
mortgage notes 2,454 2,685
--------- ---------
5,248 3,237
--------- ---------
Expenses:
Interest 1,435 774
Operating 854 181
General and administrative 349 148
Depreciation and amortization 444 106
--------- ---------
3,082 1,209
--------- ---------
2,166 2,028
Equity in income of unconsolidated
affiliates 131 110
Minority interests in income of
Operating Partnership (420) -
--------- ---------
Net income $ 1,877 $ 2,138
========= =========
Per common share:
Net income, basic and diluted $ .24 $ .27
========= =========
Dividend declared $ .29 $ .29
========= =========
Average common shares outstanding:
Basic 7,966,621 7,966,621
========= =========
Diluted 7,973,533 7,966,621
========= =========
See accompanying notes to consolidated financial statements.
<PAGE> 4
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(in thousands)
Balance at December 31, 1997 $54,378
Net income for the three months
ended March 31 1998 1,877
Dividends declared (2,310)
-------
Balance at March 31, 1998 $53,945
=======
See accompanying notes to consolidated financial statements.
<PAGE> 5
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
-------------------
1998 1997
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,877 $ 2,138
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 444 106
Equity in depreciation and amortization of
unconsolidated affiliates 43 44
Minority interests in income of
Operating Partnership 420 -
-------- --------
2,784 2,288
Changes in operating assets and liabilities,
net of effects of acquisition:
Increase in other assets (1,241) (771)
Increase (decrease) in accounts payable
and other liabilities 431 (123)
-------- --------
Net cash provided by operating activities 1,974 1,394
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Fundings on real estate mortgage notes (4,350) (5,091)
Collections on real estate mortgage notes 6,614 5,065
Acquisitions of real estate, net of cash acquired (7,500) -
Other (116) (43)
-------- --------
Net cash used in investing activities (5,352) (69)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of borrowings (700) (533)
Cash dividends paid (2,311) (2,311)
Increase in restricted cash (3) (4)
-------- --------
Net cash used in financing activities (3,014) (2,848)
-------- --------
Net decrease in unrestricted cash
and cash equivalents (6,392) (1,523)
Unrestricted cash and cash equivalents at
beginning of the period 11,954 6,666
-------- --------
Unrestricted cash and cash equivalents at
end of the period $ 5,562 $ 5,143
======== ========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,261 $ 768
======== ========
Non-cash transactions:
Fair value of assets acquired ($27,739) $ -
Liabilities assumed 20,239 -
------- --------
Cash paid for acquisitions, net of cash
acquired (Note 2(b)) ($ 7,500) -
======= ========
See accompanying notes to consolidated financial statements.
<PAGE> 6
CV REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Organization, Business and Basis of Presentation
Organization and Business
CV Reit, Inc. ("CV Reit") is a real estate investment trust
("REIT") which until December 31, 1997, was principally engaged in
investing in real estate mortgage notes. Effective December 31,
1997, CV Reit and its subsidiaries converted to an Umbrella
Partnership REIT (UPREIT) structure as part of a series of
transactions which closed on that date and which included the
following: (1) a newly created Operating Partnership, Montgomery
CV Realty L.P. (together with its wholly-owned subsidiaries
hereinafter collectively referred to as the "OP"), acquired 100% of
the ownership interests in ten commercial properties, and an
approximately 95% economic interest in Drexel Realty, Inc.
("Drexel"), a real estate management and leasing company and (2) CV
Reit and its subsidiaries transferred substantially all of their
net assets (or the economic benefit thereof) to the OP. As a
result, CV Reit, through a wholly-owned subsidiary, indirectly owns
81.7% of the OP, is the OP's sole general partner and has become a
self-administered, self-managed equity REIT. As of March 31, 1998,
the OP owned 11 shopping centers and two office buildings, located
in Pennsylvania, New Jersey and Florida.
Basis of Presentation
The accompanying consolidated financial statements include the
accounts of CV Reit and all subsidiaries ("the Company"), including
the OP. The Company owns 99% of the non-voting common stock and a
95% economic interest in Drexel, and owns 45%-50% interests in
certain real estate partnerships, which are accounted for on the
equity method. Significant intercompany accounts and transactions
have been eliminated in consolidation.
The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been consolidated or omitted pursuant to
such rules and regulations; however, the Company believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these consolidated financial
statements be read in conjunction with the financial statements and
the notes thereto included in the Company's annual report on Form
10-K for the fiscal year ended December 31, 1997.
<PAGE> 7
The consolidated financial statements for the interim periods
included herein, which are unaudited, include, in the opinion of
management, all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the financial position and
results of operations of the Company for the periods presented.
The results of operations for interim periods should not be
considered indicative of results to be expected for the full year.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(2) Real Estate - Income Producing ("Real Estate")
(a) Real Estate is located in Pennsylvania, New Jersey and Florida
and consists of (in thousands):
Mar. 31, Dec.31,
1998 1997
-------- -------
Shopping centers (Note 3(b)) $ 91,965 $64,356
Office buildings 5,334 5,334
Motel (Note 3(d)) 4,058 4,058
Other 81 81
-------- ------
Totals 101,438 73,829
Less accumulated depreciation (3,247) (2,812)
-------- -------
Net Real Estate (Note 3(c)) $ 98,191 $71,017
======== =======
(b) On March 31, 1998, the OP purchased an approximately 177,000
square foot shopping center, located in Pennsylvania (the "Newtown
Acquisition"), for a purchase price of $27.7 million, including
transaction costs, which consisted of $7.5 million of cash and the
assumption of $20.2 million of liabilities, principally mortgage
debt. The acquisition was accounted for as a purchase;
accordingly, the net assets acquired are included in the
Consolidated Balance Sheet as of March 31, 1998. The Consolidated
Statements of Income will include the operating results of the net
assets acquired beginning on April 1, 1998.
<PAGE> 8
(c) Real Estate with a net book value of $83.8 million, at March
31, 1998, is pledged as collateral for borrowings (Note 4).
(d) On March 9, 1998, the Company entered into a contract to sell
the Motel. The contract is subject to various conditions and if
consummated, the Company would receive net cash proceeds of
approximately $4.2 million and recognize a gain of approximately
$2.3 million.
(e) The Company has several pending acquisitions of shopping
centers for an aggregate purchase price of $53 million. See
Management's Discussion and Analysis of Results of Operations and
Financial Condition - Liquidity and Capital Resources - Future
Acquisitions for a discussion of these potential acquisitions.
(3) Real Estate Mortgage Notes Receivable
(a) Real estate mortgage notes receivable are collateralized by
real estate located in southeast Florida and consist of (in
thousands):
Mar.31, Dec.31,
1998 1997
Long Term Recreation Notes (the ------- -------
"Recreation Notes") (Notes
3(b) and 4) $66,045 $66,236
Other, principally due from
Hilcoast Development Corp.
("Hilcoast"), maturing primarily
through July 31, 1998 9,343 11,416
------- -------
Totals $75,388 $77,652
======= =======
(b) At March 31, 1998, the Recreation Notes consisted of $25
million due from Hilcoast (the "Hilcoast Recreation Note"),
collateralized by first mortgages on certain real estate within the
Century Village at Pembroke Pines, Florida adult condominium
project (the "Pembroke Century Village"), including the recreation
facilities at that project (the "Pembroke Recreation Facilities")
and $41 million, collateralized by first mortgages on the
recreation facilities at the three previously completed Century
Village communities. The Hilcoast Recreation Note bears interest
at 11% and through July 31, 1998, requires monthly interest
payments only. On July 31, 1998, the Hilcoast Recreation Note is
scheduled to be converted to an 11%, fixed rate, 25 year, $25
million, self-amortizing loan providing for equal monthly payments
of principal and interest. This note may not be prepaid by
Hilcoast without a prepayment penalty and is collateralized by a
first mortgage on the Pembroke Recreation Facilities. The
remaining $41 million of Recreation Notes principally provide for
self-amortizing equal monthly principal and interest payments due
through 2012, with interest rates averaging 13%, and contain
certain prepayment prohibitions. These notes are pledged as
collateral for borrowings (Note 4).
<PAGE> 9
(4) Borrowings
(a) Borrowings consist of (in thousands):
Mar. 31, Dec. 31,
1998 1997
Mortgage notes payable through -------- --------
September 2008, interest
ranging from 7.5% to 10.35%,
collateralized by Real Estate
(Note 2) $ 53,365 $ 33,418
Collateralized Mortgage Obligations,
net of unamortized discount of
$646,000 and $676,000 based
on an effective interest rate of
8.84%, collateralized by certain
of the Recreation Notes (Note 3
(b)), quarterly self-amortizing
principal and interest payments
required through March 2007 32,281 32,863
-------- --------
Totals $ 85,646 $ 66,281
======== ========
(b) Effective March 31, 1998, the Company entered into a $100
million three year credit facility with a financial institution
(the "Line of Credit") - see Management's Discussion and Analysis
of Results of Operations and Financial Condition - Liquidity and
Capital Resources - Borrowings for a description of the terms.
(5) Commitments and Contingencies
(a) TGI Development, Inc. ("TGI")
On October 9, 1989, TGI filed a complaint in the Circuit Court of
Palm Beach County against CV Reit, H. Irwin Levy, the Company's
Chairman of the Board, and certain unrelated parties alleging
misrepresentations by the defendants in connection with TGI's
purchase and development of land from a previous borrower of the
Company. The complaint, as subsequently amended, consisted of
claims of common law fraud and breach of contract and sought
compensatory damages of approximately $2 million in addition to
punitive damages. On October 3, 1990, the Company filed a
counterclaim against TGI in connection with an $800,000 promissory
note from TGI to the Company. In accordance with an agreement
between the parties, on August 23, 1994 the Court dismissed the
breach of contract claim with prejudice and entered a judgment in
the amount of $1.1 million in favor of the Company on the
aforementioned counterclaim. TGI's claim of common law fraud has
been scheduled for trial in September 1998 in the Circuit Court.
Although the Company believes it has substantial defenses, the
ultimate outcome of this litigation cannot presently be determined.
Accordingly, no provision for any liability that may result upon
final adjudication has been made in the accompanying financial
statements. In management's opinion, the final outcome of this
litigation will not have a material adverse effect on the Company's
financial condition.
<PAGE> 10
(b) Other
The Company is subject to various claims and complaints relative to
its business activities. In the opinion of management, the
ultimate disposition of these matters will not have a material
adverse effect on the Company's financial position.
Management's Discussion and Analysis of Results
of Operations and Financial Condition
Results of Operations
Net Income
For the quarter ended March 31, 1998, net income was $1,877,000 or
$.24 per share compared to $2,138,000 or $.27 per share for the
same period of 1997.
During the quarter ended March 31, 1998, rent income, operating
expenses and depreciation and amortization increased by $2,242,000,
$673,000 and $338,000, respectively, primarily due to the
acquisition of ten commercial properties on December 31, 1997 (the
"1997 Acquisition"). The Company expects continued increases in
rent income, operating costs and depreciation during the remainder
of 1998 primarily as a result of the Newtown Acquisition on March
31, 1998 and certain additional planned acquisitions (the "Planned
Acquisitions" - see Liquidity and Capital Resources - Future
Acquisitions), if consummated.
<PAGE> 11
Interest income decreased by $231,000 during the first quarter of
1998, primarily attributable to an approximately $6 million
reduction in the average balance of the Hilcoast mortgage notes
receivable. The average interest rate on the mortgage notes repaid
approximated 11% and the repayments have been generally utilized in
connection with the 1997 Acquisitions, the Newtown Acquisition, or
reinvested in lower yielding short-term investments (averaging
approximately 5.40% during the first quarter of 1998). Interest
income is anticipated to continue to decrease in 1998 due to
scheduled repayments of the mortgage notes receivable.
Interest expense increased by $661,000 in the first quarter of 1998
primarily due to the assumption of approximately $33.4 million of
mortgage indebtedness in connection with the 1997 Acquisition.
Interest expense is expected to increase significantly during the
remainder of 1998 due to the assumption of $20 million of mortgage
indebtedness in connection with the Newtown Acquisition and the
Planned Acquisitions, if consummated.
General and administrative expenses increased by $201,000 during
the first quarter of 1998, reflecting increases in personnel costs
and professional fees principally due to the 1997 Acquisition.
These expenses are not expected to fluctuate significantly during
the remainder of 1998.
Funds From Operations
Funds From Operations ("FFO") as defined by the National
Association of Real Estate Investment Trusts (NAREIT), consists of
net income (computed in accordance with generally accepted
accounting principles) before depreciation and amortization of real
property, certain non-recurring items, extraordinary items, gains
and losses on sales of real estate and income taxes. The Company
believes that FFO is an appropriate measure of operating
performance because real estate depreciation and amortization
charges are not meaningful in evaluating the operating results of
the Company's properties and certain non-recurring items, such as
the reversal of previously recorded losses, are not relevant to
ongoing operations. However, FFO does not represent cash generated
from operating activities in accordance with generally accepted
accounting principles and should not be considered as an
alternative to either net income as a measure of the Company's
operating performance or to cash flows from operating activities as
an indicator of liquidity or cash available to fund all cash flow
needs. In addition, since other REITs may not calculate FFO in the
same manner, FFO presented herein may not be comparable to that
reported by other REITs.
<PAGE> 12
The following schedule reconciles FFO to net income for the
quarters presented:
March 31,
----------------------
1998 1997
---------- ----------
Net income $1,877,000 $2,138,000
Depreciation and amortization
of real property 444,000 106,000
Equity in depreciation and
amortization of real property
of unconsolidated affiliates 43,000 44,000
Minority interests in income of OP 420,000 -
---------- ----------
FFO $2,784,000 $2,288,000
========== ==========
FFO - Company's share (81.7% in 1998
and 100% in 1997) $2,274,000 $2,288,000
========== ==========
Liquidity and Capital Resources
Consolidated Statements of Cash Flows
Net cash provided by operating activities (prior to net changes in
operating assets and liabilities), as reported in the Consolidated
Statements of Cash Flows, increased to $2.8 million in the first
quarter of 1998 from $2.3 million for the same period in 1997.
These amounts equal net income plus adjustments for non-cash items
consisting of depreciation and amortization, and, during the 1998
quarter, minority interests in the income of the OP.
Net cash used by investing activities increased to $5.4 million in
the first quarter of 1998 from $69,000 in the first quarter of
1997. The 1998 first quarter amounts principally consist of $7.5
million of cash required in connection with the Newtown
Acquisition, partially offset by $2.3 million of net collections on
real estate mortgage notes receivable.
<PAGE> 13
Net cash used in financing activities increased to $3 million in
the first quarter of 1998 from $2.8 million during the same period
of 1997. These amounts primarily consist of distributions paid to
stockholders and to a lesser extent, net repayments of borrowings.
During each of the quarters ended March 31, 1998 and 1997, cash
dividends declared amounted to $.29 per share.
Capital Resources
The Company's operating funds are expected to be principally
generated from rental income from income producing properties and
interest income on mortgage notes receivable. The Company believes
that its operating funds will be sufficient in the foreseeable
future to fund operating and administrative expenses, interest
expense, recurring capital expenditures and distributions to
stockholders in accordance with REIT requirements. Sources of
capital for non-recurring capital expenditures and scheduled
principal payments, including balloon payments, on outstanding
borrowings are expected to be obtained from anticipated property
refinancings, scheduled principal repayments on certain Hilcoast
mortgage notes receivable, sales of non-strategic other real
estate, existing cash balances, the Line of Credit (see Liquidity
and Capital Resources - Borrowings) and/or potential debt or equity
financing in the public or private markets.
Future Acquisitions
As of March 31, 1998, unrestricted cash and cash equivalents
amounted to approximately $5.6 million, with an average yield of
5.10%. The Company expects to continue its strategy of investing
available funds in high quality short-term corporate and government
securities while it evaluates potential acquisitions of income
producing properties. In the event such properties are acquired,
the OP may issue additional OP Units, pay cash, or a combination
thereof. If cash payments are required in excess of funds
available under the Company's Line of Credit (see Liquidity and
Capital Resources - Borrowings), the Company may be required to
seek outside financing which may or may not be available.
On March 31, 1998, the OP completed the Newton Acquisition for a
purchase price of $27.7 million, including transaction costs, which
consisted of $7.5 million of cash and the assumption of $20.2
million of liabilities, principally mortgage debt. In addition,
the OP has entered into agreements to acquire eight shopping
centers in Pennsylvania and New Jersey for an aggregate purchase
price of approximately $53 million, including projected transaction
costs. The Planned Acquisitions are scheduled to close during the
second quarter of 1998 and if consummated, the Company intends to
finance the purchase prices through assumption of existing
mortgages on the properties to be acquired, the Line of Credit (see
Liquidity and Capital Resources - Borrowings) and available cash
balances. The Planned Acquisitions are subject to due diligence
and certain other conditions and there can be no assurance that
they will be consummated.
<PAGE> 14
The Company's policy is to acquire additional properties only if
they are income producing and any proposed acquisition requires a
resolution by a majority of CV Reit's Board of Directors that the
acquisition will not adversely affect CV Reit's ability to pay a
quarterly dividend of at least 29 cents per share. Under the OP
agreement, all of the activities of the OP must generally be
conducted with a view toward enabling the OP to make quarterly
distributions to all partners of at least 29 cents per OP unit and
such additional amount, if required, to enable CV Reit to pay a
regular quarterly dividend of at least 29 cents per share to its
stockholders.
Borrowings
At March 31, 1998, the Company's borrowings increased to $85.6
million from $66.3 million at December 31, 1997 as a result of the
Newtown Acquisition. Scheduled principal payments over the next
five years are $52.7 million with $32.9 million due thereafter.
Borrowings include $53.4 million, collateralized by a substantial
portion of the Company's Real Estate. The Company expects to
refinance certain of these borrowings, at or prior to maturity,
through new mortgage loans on Real Estate including refinancing
under the Line of Credit (see below). The ability to do so,
however, is dependent upon various factors, including the income
level of the properties, interest rates and credit conditions
within the commercial real estate market. Accordingly, there can
be no assurance that such refinancing can be achieved.
The remaining $32.2 million of borrowings consists of the CMO's
which are collateralized by $41 million of the Recreation Notes and
require self-amortizing principal and interest payments through
March 2007. During the term of the CMO's, the scheduled annual
debt service requirement approximates $5.2 million compared to
annual principal and interest payments scheduled to be received
under the related Recreation Notes of $6.5 million.
Effective March 31, 1998, the Company entered into a Line of Credit
with a financial institution wherein the financial institution has
agreed to provide a $100 million three year non-revolving line of
credit. Advances under the Line of Credit: (1) must be secured by
assets based on specified aggregate loan to value and debt service
coverage ratios, (2) bear interest at an annual rate of one month
LIBOR plus 1.75% and (3) may be drawn only during the first two
years of the credit facility and must be repaid by certain dates
during the third year. Additional provisions include a 1%
commitment fee, a minimum net worth covenant and cross-default and
cross-collateralization requirements. Advances under the Line of
Credit will be used to fund acquisitions, expansions, renovations,
financing and refinancing of real estate, including reimbursement
of equity advances, and will require certain performance covenants.
As of March 31, 1998, the Company had not borrowed any funds under
the Line of Credit.
<PAGE> 15
Inflation
During recent years, the rate of inflation has remained at a low
level and had minimal impact on the Company's operating results.
Substantially all of the tenant leases contain provisions designed
to lessen the impact of inflation. These provisions include
escalation clauses which generally increase rental rates annually
based on cost of living indexes and percentage rentals based on
tenants, gross sales, which generally increase as prices rise.
Many of the leases are for terms of less than ten years which
increases the ability of the OP to replace those leases which are
below market rates with new leases at higher base and/or percentage
rentals. In addition, most of the leases require the tenants to
pay their proportionate share of increases in operating expenses,
including common area maintenance, real estate taxes and insurance.
However, in the event of significant inflation, the Company's
operating results could be adversely affected if general and
administrative expenses and interest expense increase at a rate
higher than rent income or if the increase in inflation exceeds
rent increases for certain tenant leases which provide for stated
rent increases (rather than based on cost of living indexes).
Other
Year 2000 issues pertain to the inability of certain computerized
information systems to properly recognize date-sensitive
information as the year 2000 approaches. Systems that do not
recognize such information could generate erroneous data or cause
systems to fail. The Company is presently reviewing the potential
impact of Year 2000 compliance issues on its information systems
and business operations, and has preliminarily determined that any
costs, problems or uncertainties associated with the potential
consequences of Year 2000 issues are not expected to have a
material impact on its future operations or financial condition.
<PAGE> 16
Forward Looking Information: Certain Cautionary Statements
Certain statements contained in "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and
elsewhere in this Form 10-Q, that are not related to historical
results, are forward looking statements, such as collectibility of
the Company's real estate mortgage notes receivable, its
anticipated liquidity and capital resources and the results of
legal proceedings. The matters referred to in forward looking
statements are based on assumptions of future events which may not
prove to be accurate and which could be affected by the risks and
uncertainties involved in the Company's business; accordingly,
actual results may differ materially from those projected and
implied in the forward looking statements. These risks and
uncertainties include, but are not limited to, the effect of
conditions in the commercial real estate market and the economy in
general, the level and volatility of interest rates, Court
decisions regarding the Company's litigation, the impact of current
or pending legislation and regulation, as well as certain other
risks described in the Form 10-Q. Subsequent written and oral
forward looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
cautionary statements in this paragraph and elsewhere described in
this Form 10-Q and in other reports filed by the Company with the
Securities and Exchange Commission.
Item 6 - Exhibits and Reports on Form 8-K:
Exhibits:
27 Financial Data Schedule
Reports on Form 8-K:
On April 15, 1998, the Registrant filed Form 8-K to
report that an agreement to acquire a shopping center
had been consummated.
On April 15, 1998, the Registrant filed Form 8-K to
report that the Registrant entered into a $100,000,000
credit facility.
<PAGE> 17
SIGNATURES
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.
CV REIT, INC.
________________________________
(Registrant)
/s/ Louis P. Meshon
May 13, 1998 ________________________________
Louis P. Meshon, President
/s/ Elaine Hauff
May 13, 1998 ________________________________
Elaine Hauff, Vice President,
Treasurer and Principal
Financial and Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,480<F1>
<SECURITIES> 0
<RECEIVABLES> 75,388
<ALLOWANCES> 2,401
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 109,290
<DEPRECIATION> 3,247
<TOTAL-ASSETS> 191,883
<CURRENT-LIABILITIES> 0
<BONDS> 85,646
0
0
<COMMON> 80
<OTHER-SE> 72,435
<TOTAL-LIABILITY-AND-EQUITY> 191,883
<SALES> 0
<TOTAL-REVENUES> 5,248
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 854
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,435
<INCOME-PRETAX> 1,877
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,877
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
<FN>
<F1>Includes $918 of restricted cash.
</FN>
</TABLE>
