FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For quarterly period ended March 31, 1996
[ ] 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 0-10421
CORNERSTONE PROPERTIES INC.
(Exact name of registrant as specified in its charter)
Nevada 74-2170858
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
126 East 56th Street
New York, New York 10022
(Address of principal executive offices)
(212) 605-7100
(Registrant's telephone number, including area code)
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 [ ]
Number of shares of Common Stock outstanding as of May 13, 1996: 20,309,165
Total pages = 14
Exhibit Index located on page 11
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<CAPTION>
March 31, December 31,
1996 1995
--------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Investments, at cost:
Land .............................................................. $ 57,823 $ 57,823
Buildings and improvements ........................................ 555,118 546,357
Mortgage note receivable (Note 4) ................................. 30,783 30,731
Deferred lease costs .............................................. 72,241 72,077
--------- ---------
715,965 706,988
Less: Accumulated depreciation and amortization ................... 181,126 175,167
--------- ---------
Total investments .............................................. 534,839 531,821
Cash and cash equivalents (Note 1) ....................................... 15,906 7,740
Restricted cash .......................................................... 2,905 4,393
Other deferred costs, net of accumulated amortization of $5,466 and $5,301 3,123 2,895
Deferred tenant receivables (Note 1) ..................................... 33,266 32,695
Tenant and other receivables ............................................. 2,837 1,585
Notes receivable ......................................................... 3,955 4,153
Other assets ............................................................. 1,672 807
--------- ---------
Total Assets ............................................................. $ 598,503 $ 586,089
========= =========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Long-term debt (Note 2) .................................................. $ 382,526 $ 369,600
Accrued interest payable ................................................. 2,562 4,327
Accrued real estate taxes payable ........................................ 12,137 10,045
Accounts payable and accrued expenses .................................... 3,232 3,456
Unearned revenue and other liabilities ................................... 12,902 16,499
--------- ---------
Total Liabilities ........................................................ 413,359 403,927
--------- ---------
Minority Interest ........................................................ (16,405) (7,194)
--------- ---------
Commitments and Contingencies
Shareholders' Investment
Preferred Stock, $16.50 stated value, 15,000,000 shares authorized;
3,030,303 shares issued and outstanding ............................. 50,000 50,000
Common stock, 100,000,000 authorized shares ;
shares issued and outstanding (1996-20,309,165; 1995-19,959,515)
Paid-in capital .......................................................... 186,478 181,477
Accumulated deficit ...................................................... (32,904) (39,885)
Deferred compensation .................................................... (2,025) (2,236)
--------- ---------
Total Shareholders' Investment ........................................... 201,549 189,356
--------- ---------
Total Liabilities and Shareholders' Investment ........................... $ 598,503 $ 586,089
========= =========
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</FN>
</TABLE>
<PAGE>
<TABLE>
Item 1. Financial Statements (continued)
CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(In Thousands, Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1996 1995
-------- --------
<S> <C> <C>
REVENUES
Office and parking rentals ......................... $ 25,919 $ 21,383
Interest and other income .......................... 1,505 462
-------- --------
Total Revenues ................................. 27,424 21,845
-------- --------
EXPENSES
Building operating expenses ........................ 5,667 4,674
Real estate taxes .................................. 3,891 2,806
Interest expense ................................... 7,815 7,664
Depreciation and amortization ...................... 5,991 5,661
Advisory fee ....................................... -- 525
Professional fees .................................. 194 181
General and administrative ......................... 1,181 442
Directors' fees .................................... 34 24
-------- --------
Total Expenses ................................. 24,773 21,977
-------- --------
2,651 (132)
-------- --------
OTHER INCOME (EXPENSES)
Unrealized gain on interest rate swap (Note 3) ..... 7,919 --
Loss on swap termination (Note 2) .................. (3,125) --
-------- --------
4,794 --
-------- --------
Minority Interest .................................. 464 885
-------- --------
NET INCOME (LOSS) ......................................... $ 6,981 $ (1,017)
======== ========
NET INCOME (LOSS) PER SHARE ............................... $ 0.30 $ (0.08)
======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial statements
</FN>
</TABLE>
<PAGE>
<TABLE>
Item 1. Financial Statements (continued)
CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(In Thousands)
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ........................................................ $ 6,981 $ (1,017)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization ...................................... 5,991 5,661
Deferred compensation amortization ................................. 212 --
Loss on swap termination ........................................... 3,125 --
Unbilled rental revenue ............................................ (557) (504)
Unrealized gain on interest rate swap .............................. (7,919) --
Decrease in accrued interest payable ............................... (1,765) (867)
Minority interest share of income .................................. 464 885
Increase in tenant and other receivables and other assets .......... (2,114) (178)
Increase in accounts payable, accrued expenses and other liabilities 3,212 470
-------- --------
Total adjustments .................................................. 649 5,467
-------- --------
Net cash provided by operating activities .......................... 7,630 4,450
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to investment property ......................................... (384) (115)
Deferred costs incurred on investments ................................... (204) --
Repayment of notes receivable from a related party ....................... 198 178
Loan to a related party .................................................. -- (126)
-------- --------
Net cash used in investing activities .............................. (390) (63)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under lines of credit ......................................... -- (2,223)
Debt issuance costs ...................................................... (188) --
Decrease in restricted cash .............................................. 1,488 2,699
Distribution to minority partners ........................................ (374) (767)
Distributions to shareholders ............................................ -- (3,840)
-------- --------
Net cash provided by (used) in financing activities ................ 926 (4,131)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS ............................................ 8,166 256
CASH AND CASH EQUIVALENTS, beginning of period ................................... 7,740 12,506
-------- --------
CASH AND CASH EQUIVALENTS, end of period ......................................... $ 15,906 $ 12,762
======== ========
<FN>
Non-cash investing activity: Purchase of minority partnership interest through
issuance of $12,926,000 promissory note and 349,650 shares of common stock.
The accompanying notes are an integral part of these consolidated financial statements
</FN>
</TABLE>
<PAGE>
Item 1. Financial Statements (continued)
CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(1) NATURE OF THE COMPANY'S BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of the Company's Business: Cornerstone Properties Inc. (formerly known
as ARICO America Realestate Investment Company, prior to September 18, 1995), a
Nevada corporation (Cornerstone or the Company), was formed on May 5, 1981, to
invest in major commercial real estate projects in North America. The following
schedule summarizes the Company's interest, through its wholly-owned
subsidiaries, in investments at March 31, 1996.
Net Ownership
Property Location Rentable Interest Notes
square feet
- --------------------------------------------------------------------------------
One Norwest Center Denver, Colorado 1,188,000 100% A
Norwest Center Minneapolis, Minnesota 1,118,000 50%
Washington Mutual Tower Seattle, Washington 1,066,000 50%
125 Summer Street Boston, Massachusetts 464,000 100%
Mortgage Note Receivable
collateralized by
Tower 56 New York, NY
(A)On January 1, 1996, the Company purchased the remaining 10 percent
interest in 1700 Lincoln Limited, which operates One Norwest Center, from
Hines Colorado Limited (HCL) for a $12,925,976 convertible promissory note
and 349,650 newly-issued shares of common stock of the Company.
General: 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 consolidated financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. In
the opinion of management of the Company, all adjustments, consisting only of
normal recurring accruals, necessary to summarize fairly the unaudited results
of operations for the three month periods presented have been included. Results
for the three months ended March 31, 1996 are not necessarily indicative of
results which may be expected for any other interim period or for the year as a
whole. It is suggested that these financial statements be read in conjunction
with the audited financial statements and notes thereto included in the
Company's latest annual report.
Principles of Consolidation: The accompanying financial statements include
the accounts of Cornerstone and its wholly-owned qualified REIT subsidiaries and
controlled partnerships. All significant intercompany balances and transactions
have been eliminated in consolidation.
Interest Rate Swap Agreement: Cornerstone is a party to an interest rate swap
agreement used to hedge its interest rate exposure. The differential to be paid
is recognized in the period incurred and included in interest expense.
Income (Loss) per Share: Income (Loss) per share is computed based on the
weighted average number of common shares outstanding of 20,309,165 for 1996 and
13,240,500 for 1995. The dividends in arrears applicable to the preferred stock
of $875,000 have been deducted from the net income for the three months ended
March 31, 1996 in computing earnings per share.
<PAGE>
Item 1. Financial Statements (continued)
(2)LONG-TERM DEBT
Property Description 3/31/96
-----------
One Norwest Center .................. Interest Bearing Notes $ 98,000,000
HCL Promissory Note 12,926,000
Norwest Center ...................... Mortgage Loan 110,000,000
Washington Mutual Tower ............. Mortgage Loan 79,100,000
125 Summer Street ................... Mortgage Loan 50,000,000
Corporate ........................... Term Loan 32,500,000
===========
Total ............... $382,526,000
===========
Interest Bearing Notes: The interest-bearing notes mature on February 17,
1997, and bear interest at 8.893 percent, payable semi-annually.
The notes are collateralized by a non-recourse mortgage on One Norwest Center
and an assignment of all leases and rents, and certain other property, rights
and interests related to One Norwest Center. In addition, as of March 31, 1996,
Cornerstone had $2,905,000, recorded as restricted cash, on deposit with the
trustee to meet interest payments on the notes.
Additionally, Cornerstone will pay to DBNY, for an interest rate swap agreement
used to fix the interest rates on the notes, an amount equal to 0.752 percent on
a notional amount of $107,000,000 throughout the term of the notes. This amount
has been treated as a yield adjustment on the long-term debt and has been
included in interest expense. Payments on the swap are due January 30 and July
30 each year until the termination date of July 30, 1998.
As protection against market interest rates rising prior to the maturity of the
above stated notes, on September 29, 1993, Cornerstone entered into an interest
rate swap agreement with Deutsche Bank AG with an effective starting date of
February 18, 1997. The interest rate swap agreement is for a fixed rate of 7.14
percent on a notional amount of $98,000,000 for a period of ten years. Effective
March 29, 1996, the first five years of this swap agreement were terminated
resulting in a loss of $3,125,000. The notional amount on the remaining five
years was changed to $92,800,000.
Promissory Note: The convertible promissory note payable to HCL (Note 1) is
due on January 1, 2001 and pays interest only at LIBOR plus 50 basis points. The
note is convertible at the option of HCL into shares of common stock at $14.30 a
share after January 1, 1997.
Mortgage Loans: The Norwest Center loan matures December 31, 2005 and bears
interest at the rate of 8.74 percent with the full principal due at maturity.
The loan is collateralized by a first mortgage on Norwest Center and assignment
of all leases and rents.
The Washington Mutual Tower loan matures September 30, 2005 and bears interest
at the rate of 7.53 percent with the full principal due at maturity. The loan is
collateralized by a first mortgage on Washington Mutual Tower and assignment of
all leases and rents.
The 125 Summer Street loan bears interest at the rate of 7.20 percent and
matures on January 1, 2003. Payment terms on the loan call for interest only
payments for the first 5 years and a 25 year principal amortization thereafter.
The loan is collateralized by a first mortgage on 125 Summer Street and
assignment of all leases and rents.
Term Loan: The term loan matures on December 31, 2003, and bears interest at
the rate of 5.00 percent. The loan must be prepaid at par upon the sale of
either Norwest Center or Washington Mutual Tower. The balance of the term loan
at March 31, 1996 was $32,500,000.
(3) UNREALIZED GAIN ON INTEREST RATE SWAP
The Company does not trade in derivative instruments but rather uses interest
rate swap agreements to hedge the interest rate risk on its financings with the
intention of obtaining the lowest effective interest cost on its indebtedness.
An unrealized gain of $7,672,000 was recorded as part of the $98,000,000
notional amount forward interest rate swap termination (Note 2). Additionally,
an unrealized gain of $247,000 was recorded representing the amount the Company
would receive if the $92,800,000 notional amount forward interest rate swap
agreement were terminated (Note 2). The Company has not terminated this swap
agreement and intends to structure its future financings in accordance with the
policy stated above. The future unrealized mark to market adjustment on this
swap agreement will fluctuate with market interest rates.
(4) NEW PRONOUNCEMENTS
During 1996, Cornerstone adopted SFAS #123, "Accounting for Stock-Based
Compensation." The Company has elected to adopt the disclosure provisions of the
new standard which require proforma net income and earnings per share
disclosures. Cornerstone has yet to determine the impact on its proforma net
income and earnings per share.
(5) SUBSEQUENT EVENTS
On April 24, 1996, Cornerstone completed its "pre-packaged" bankruptcy plan on
Tower 56. The mortgage note receivable was settled and title to Tower 56 was
transferred to CStone-New York Inc., a wholly owned subsidiary of the Company.
Additionally, CStone-New York obtained $18,000,000 in mortgage financing from
Northwestern Mutual Life Insurance Company at a rate of 7.674 percent for a term
of seven years with a 30 year principal amortization.
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996
RESULTS OF OPERATIONS
Consolidation: Cornerstone's principal source of income is rental revenues
received through its investment in three real estate partnerships and one fee
simple investment. The Company's investments in the partnerships are accounted
for using the consolidation method of accounting.
Net Earnings and Losses: On a consolidated basis, for the three month period
ended March 31, 1996 compared to the same period in 1995, Cornerstone's share in
net earnings and losses of its real estate investments increased to $5,981,000
from $2,999,000. The increase is primarily attributable to earnings from 125
Summer Street which was acquired November 1, 1995, an increased share of
earnings from One Norwest Center due to the 10 percent partnership interest
purchase on January 1, 1996 and debt refinancing at Washington Mutual Tower.
Interest and Other Income: Interest and other income primarily consists of
earnings from the Tower 56 mortgage note receivable, advisory and management
fees and interest earned from short-term investments. The increase in interest
and other income in 1996 is primarily due to earnings on the mortgage note
receivable (purchased December 19, 1995) and fees from advisory and management
services. Also included in interest and other income is interest earned on notes
receivable from Hines Colorado Limited (HCL) in the amount of $107,000 and
$136,000 for the three months ended March 31, 1996 and 1995, respectively.
Interest Expense: Interest expense incurred by Cornerstone relating to its
financing activities increased in 1996 primarily due to the additional financing
incurred related to the purchase of 125 Summer Street and the 10 percent
partnership interest in 1700 Lincoln Limited.
Administrative Expenses: Aggregate administrative expenses for the three
months ended March 31, 1996 and 1995 were $1,452,000 and $1,172,000,
respectively. The increase is due to the change to self-administration on July
1, 1995; however, this increase in administrative expenses should be considered
along with the 1996 advisory income from third party contracts of $190,000.
Unrealized gain on interest rate swap: The Company does not trade in
derivative instruments but rather uses interest rate swap agreements to hedge
the interest rate risk on its financings with the intention of obtaining the
lowest effective interest cost on its indebtedness. For 1996, an unrealized gain
of $7,672,000 was recorded as part of the $98,000,000 notional amount forward
interest rate swap termination. Additionally, for 1996, an unrealized gain of
$247,000 was recorded representing the amount the Company would receive if the
$92,800,000 notional amount forward interest rate swap agreement were
terminated. The Company has not terminated this swap agreement and intends to
structure its future financings in accordance with the policy stated above. The
future unrealized mark to market adjustment on this swap agreement will
fluctuate with market interest rates.
LIQUIDITY AND CAPITAL RESOURCES
Capital Stock Transactions: On January 1, 1996, the Company purchased the
remaining 10 percent partnership interest in 1700 Lincoln Limited which operates
One Norwest Center from Hines Colorado Limited (HCL). In exchange for its
interests, HCL received a $12,925,976 convertible promissory note and 349,650
newly-issued shares of common stock of the Company.
Funds From Operations: The Company calculates Funds from Operations (FFO)
based upon guidance from the National Association of Real Estate Investment
Trusts. FFO is defined as net income, excluding gains or losses from debt
restructuring and sales of property, plus real estate investment depreciation
and amortization, and after adjustments for unconsolidated joint ventures. Due
to the unique nature of Cornerstone's leases, a further adjustment to the
standard definition of FFO is made to reduce FFO by the amount of free and
deferred rental revenue which has been recognized in the financial statements.
In the opinion of management, these amounts relate to benefits which will not be
realized, in the form of increased cash flow, until future periods and would
distort the FFO calculation.
Industry analysts generally consider FFO to be an appropriate measure of
performance of an equity Real Estate Investment Trust such as Cornerstone. FFO
does not represent cash generated from operating activities in accordance with
generally accepted accounting principles and, therefore, should not be
considered a substitute for net income as a measure of performance or for cash
flow from operations as a measure of liquidity calculated in accordance with
generally accepted accounting principles.
The table below illustrates the adjustments which were made to the net income
(loss) of Cornerstone in the calculation of FFO for the three months ended March
31, 1996 and 1995, respectively (in thousands):
Funds From Operations
Three Months Three Months
Ended Ended
March 31, March 31,
1996 1995
---- ----
Net income (loss) $6,981 ($1,017)
Plus:
Depreciation and amortization*5,829 5,346
Amortization on rent notes 198 178
Loss on swap termination 3,125 -
Norwest Center tax adjustment 62 -
Less:
Unrealized gain (7,919) -
Free rent and deferred rents (557) (558)
Minority adjustments (117) (98)
----------- ----------
Funds From Operations $7,602 $3,851
====== ======
*Depreciation and amortization has been adjusted for the amortization
of deferred financing costs and depreciation of corporate fixed
assets.
The increase in FFO is due to the purchase of 125 Summer Street, earnings
from the Tower 56 mortgage note receivable and higher rental income resulting
from contractual increases in tenant rentals.
Promissory Note: The convertible promissory note issued to HCL on January 1,
1996 is due on January 1, 2001 and pays interest only at LIBOR plus 50 basis
points. The note is convertible at the option of HCL into shares of common stock
at $14.30 a share after January 1, 1997.
Other Matters: The Company is not aware of any environmental issues at any of
its properties. The Company does not believe inflation will have a significant
effect on its results. The Company believes it has sufficient insurance coverage
at each of its properties.
Shareholders' Distributions: Cornerstone intends to distribute at least 95
percent of its taxable income to maintain its qualification as a Real Estate
Investment Trust. Currently, Cornerstone has no taxable income and anticipates
that FFO will exceed taxable income for the foreseeable future. Cornerstone's
distribution policy is to pay distributions based upon FFO, less prudent
reserves.
Liquidity: At March 31, 1996, the Company had $15,906,000 in cash and cash
equivalents and $2,905,000 in restricted cash. Restricted cash is being held by
the trustee for the One Norwest Center notes payable. In addition, Cornerstone
anticipates it will receive distributions from its real estate partnerships and
rental income from its fee owned properties on a monthly basis which will be
used to cover normal operating expenses and pay distributions to its
shareholders. Based upon its cash reserves and other sources of funds,
Cornerstone has sufficient liquidity to meet its cash requirements for the
foreseeable future.
<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
1) Exhibit 11.1: Statement of Computation of Earnings Per Share
2) For EDGAR filing purposes only, this report contains Exhibit 27,
Financial Data Schedule.
(b) Reports on Form 8-K:
None
<PAGE>
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.
CORNERSTONE PROPERTIES INC.
(Registrant)
By: /s/ John S.Moody
John S. Moody, President and CEO
Date: May 14, 1996
By: /s/ Thomas P.Loftus
Thomas P. Loftus, Vice President and Controller
(Principal Financial Officer)
Date: May 14, 1996
<TABLE>
Exhibit 11.1
Statement of Computation of Earnings Per Share
for the three months ended March 31, 1996
<CAPTION>
Earnings Per Share
Primary Fully Diluted
------------- -------------
<S> <C> <C>
1. Proceeds upon exercise of options ......................... $ 12,333,750 $ 12,333,750
2. Proceeds upon conversion
of preferred stock ....................................... -- $ 50,000,000
3. Proceeds upon conversion
of promissory note ....................................... -- $ 12,925,976
3. Market price of shares
Closing: 3/31/96 ..................................... $ -- $ 13.95
Average: 1/1/96-3/31/96 .............................. $ 14.42 $ 14.42
4. Treasury shares that could be repurchased (Options) ....... 855,322 855,322
5. Option shares outstanding ................................. 862,500 862,500
6. Common stock equivalent shares (Excess .................... 7,178 7,178
shares under option over Treasury
shares that could be repurchased)
7. Treasury shares that could be repurchased (Preferred) ..... -- 3,467,406
8. Convertible preferred shares outstanding .................. -- 3,030,303
9. Common stock equivalent shares (Excess
shares under convertible preferred over Treasury
shares that could be repurchased) ........................ -- antidilutive
7. Treasury shares that could be repurchased (Promissory note) -- 896,392
8. Convertible promissory note shares outstanding ............ 903,914
9. Common stock equivalent shares (Excess
shares under convertible preferred over Treasury
shares that could be repurchased) ........................ -- 7,522
10.Weighted average number of shares outstanding ............. 20,316,343 20,323,865
11.Net income for the period ................................. $ 6,981,000 $ 6,981,000
12.Less: Dividends in arrears applicable to
the preferred stock ...................................... $ (875,000) $ (875,000)
Plus: Interest expense on convertible note ............... $ -- $ 194,652
13.Net income applicable to common shares .................... $ 6,106,000 $ 6,300,652
14.Income per share .......................................... $ 0.30 antidilutive
15.Reported income per share ................................. $ 0.30 $ 0.30
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<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> 15,906
<SECURITIES> 0
<RECEIVABLES> 6,792
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,743
<PP&E> 612,941
<DEPRECIATION> 5,991
<TOTAL-ASSETS> 598,503
<CURRENT-LIABILITIES> 17,931
<BONDS> 382,526
<COMMON> 186,478
0
50,000
<OTHER-SE> (34,929)
<TOTAL-LIABILITY-AND-EQUITY> 598,503
<SALES> 0
<TOTAL-REVENUES> 35,343
<CGS> 0
<TOTAL-COSTS> 27,898
<OTHER-EXPENSES> 464
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,815
<INCOME-PRETAX> 6,981
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,981
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,981
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
