<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
May 29, 1998
------------------------------------------------
Date of Report (Date of Earliest Event Reported)
TRANSCONTINENTAL REALTY INVESTORS, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 0-13291 94-6565852
- --------------------------------------------------------------------------------
(State of Incorporation) (Commission (IRS Employer
File No.) Identification No.)
10670 North Central Expressway, Suite 300, Dallas, TX 75231
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (214) 692-4700
----------------
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
1
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
This Form 8-K/A amends the Form 8-K Current Report dated May 29, 1998 and filed
July 2, 1998 by Transcontinental Realty Investors, Inc. (the "Company") and
provides required financial statements that were not available at the date of
the original filing.
(a) Pro forma financial information:
Pro forma statements of operations are presented for the year ended December 31,
1997 and the three months ended March 31, 1998. A pro forma balance sheet as of
March 31, 1998 is also presented.
A summary of the pro forma transactions follows:
In January 1998, the Company purchased the Mountain Plaza Apartments, a 188 unit
apartment complex in El Paso, Texas, for $4.0 million, approximately 1.2% of the
Company's assets at December 31, 1997. The seller of the property was State
Street Bank and Trust Company, an unrelated party. The property was constructed
in 1972 and was 91% occupied at the date of purchase. The Company paid $1.0
million in cash and obtained new mortgage financing of $3.0 million. The
mortgage bears interest at 8.2% per annum, requires monthly payments of interest
only and matures in January 2000.
Also in January 1998, the Company purchased the Hunters Glen Apartments, a 212
unit apartment complex in Midland, Texas, for $2.5 million, approximately .8% of
the Company's assets at December 31, 1997. The seller of the property was
Junction Apartments of Midland, L.C., an unrelated party. The property was
constructed in 1982 and was 85% occupied at the date of purchase. The Company
paid $600,000 in cash and obtained seller financing of the remaining $1.9
million of the purchase price. The financing bears interest at a variable rate,
currently 8.0% per annum, requires monthly payments of interest only for the
first twenty-four months and thereafter requires monthly payments of principal
and interest of $14,302 and matures in January 2003.
Further in January 1998, the Company purchased the Bent Tree Garden Apartments,
a 204 unit apartment complex in Addison, Texas, for $8.1 million, approximately
2.5% of the Company's assets at December 31, 1997. The seller of the property
was Bent Tree Gardens, L.P., an unrelated party. The property was constructed in
1979 and was 87% occupied at the date of purchase. The Company paid $1.7 million
in cash and obtained new mortgage financing of $6.4 million. The mortgage bears
interest at 7.2% per annum, requires monthly payments of principal and interest
of $46,054 and matures in February 2008.
In February 1998, the Company purchased Parkway North, a 71,041 square foot
office building in Dallas, Texas, for $5.4 million, approximately 1.7% of the
Company's assets at December 31, 1997. The seller of the property was Dallas
Parkway, L.P., an unrelated party. The property was constructed in 1980 and was
89% occupied at the date of purchase. The Company paid $1.5 million in cash and
obtained new mortgage financing of $3.9 million. The mortgage bears interest at
a variable rate, currently 8.75% per annum, requires monthly payments of
interest only and matures in March 2000.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
In March 1998, the Company purchased the Plaza on Bachman Creek, a 80,278 square
foot retail/office complex in Dallas, Texas, for $3.5 million, approximately
1.1% of the Company's assets at December 31, 1997. The seller of the property
was TCIP Bachman Creek, LLC, an unrelated party. The property was constructed in
1986 and was 57% occupied at the date of purchase. The Company paid $1.1 million
in cash and obtained new mortgage financing of $2.4 million. The mortgage bears
interest at a variable rate, currently 9% per annum, requires monthly payments
of principal and interest of $21,593 and matures in March 2018.
In April 1998, the Company purchased in a single transaction Ashton Way, a 178
unit apartment complex in Midland, Texas, and the 4400 Apartments, a 92 unit
apartment complex also in Midland, Texas, and in May 1998, the Company purchased
the Woodview Apartments, a 232 unit apartment complex in Odessa, Texas, for a
total of $6.8 million, approximately .56%, .51% and 1.1%, respectively, of the
Company's assets at December 31, 1997. The seller of the Ashton Way Apartments
and 4400 Apartments was Mutual Life Insurance Company, an unrelated party. The
seller of the Woodview Apartments was Rocky Woodview, Inc., also an unrelated
party. The properties were constructed in 1978, 1981 and 1974, respectively, and
were 86%, 92% and 89% occupied at the date of purchase. The Company paid a total
of $1.5 million in cash and obtained new mortgage financing secured by all three
properties totaling $5.3 million. A first mortgage of $4.5 million bears
interest at 7.2% per annum and a second mortgage of $845,000 bears interest at a
variable rate, currently 8.2% per annum. The mortgages require monthly payments
of principal and interest totaling $38,003 and mature in October 1999 and May
2008, respectively.
Also in May 1998, the Company purchased the Emerald Terrace Apartments, a 172
unit apartment complex in Midland, Texas, for $1.5 million, approximately .46%
of the Company's assets at December 31, 1997. The seller of the property was
Emerald Terrace, Inc., an unrelated party. The property was constructed in 1977
and was 66% occupied at the date of purchase. The Company paid $425,000 in cash,
assumed the existing mortgage of $584,000 and obtained seller financing of the
remaining $491,000 of the purchase price. The mortgages bear interest at
variable rates, currently 7.5% and 9.5% per annum, respectively, require monthly
payments of principal and interest totaling $10,643 and mature in November 1999
and June 2008.
Further in May 1998, the Company purchased in a single transaction, Daley Plaza,
a 62,425 square foot office building in San Diego, California and the View Ridge
building, a 25,062 square foot office building, also in San Diego, California,
for a total of $6.5 million, approximately 1.4% and 5.9% of the Company's asset
at December 31, 1997. The seller of the properties was Ratheon Development,
Inc., an unrelated party. The properties were constructed in 1981 and were 77%
and 67% occupied at the date of purchase. The Company paid $1.7 million in cash
and obtained new mortgage financing totaling $4.8 million. The mortgages bear
interest at a variable rate, currently 9.5% per annum, require monthly payments
of principal and interest totaling $42,416 and mature in May 2005.
3
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Continued)
In addition to the purchases of the Mountain Plaza, Hunters Glen, Bent Tree
Garden, Ashton Way, 4400 and Emerald Terrace Apartments and the Parkway North,
Daley Plaza and View Ridge Office Buildings and the Plaza on Bachman Creek
retail/office complex, discussed above, the Company has also purchased three
parcels of land, two in Dallas, Texas and one in Farmers Branch, Texas, one of
which was purchased in January 1998, one in February 1998 and one in May 1998.
This land was purchased for a total of $7.8 million in cash.
In assessing each property purchase described above, the following were among
the factors considered by the Company's management, geographic location of the
property, performance of the property, new or renovated properties in the
vicinity of the property and the maintenance and appearance of the property.
Additional factors considered with respect to commercial properties were the
ease of access to the property, the adequacy of related facilities, such as
parking, and the property's sensitivity to market conditions in establishing
rental rates. With respect to apartment complexes the design and mix of units
and the ability to provide a community atmosphere for the tenants was also
considered.
In March 1998, the Company sold Shaws Plaza, a 103,482 square foot shopping
center in Sharon, Massachusetts, for $3.8 million, receiving net cash of $1.2
million after the payoff of $2.6 million in existing mortgage debt and the
payment of various closing costs associated with the sale.
These Pro Forma Statements of Operations present the Company's operations as if
the transactions described above, had occurred at the beginning of each of the
periods presented. The Company's management is not aware of any material factors
relating to the purchased properties that would cause the reported financial
information not be necessarily indicative of future operating results.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
4
<PAGE> 5
TRANSCONTINENTAL REALTY INVESTORS, INC.
PRO FORMA
CONSOLIDATED BALANCE SHEET
March 31, 1998
<TABLE>
<CAPTION>
Emerald
4400 Ashton Way Woodview Terrace
Actual(1) Apartments(2) Apartments(2) Apartments(2) Apartments(2)
------------ ------------ ------------ ------------ ------------
Assets (dollars in thousands)
<S> <C> <C> <C> <C> <C>
Notes and interest
receivable
Performing ........ $ 4,357 $ -- $ -- $ -- $ --
Nonperforming ..... 453 -- -- -- --
------------ ------------ ------------ ------------ ------------
4,810 -- -- -- --
Less - allowance
for estimated
losses ............... (891) -- -- -- --
------------ ------------ ------------ ------------ ------------
3,919 -- -- -- --
Foreclosed real
estate held for
sale ................. 1,356 -- -- -- --
Real estate held
for sale, net
of accumulated
depreciation ......... 5,624 -- -- -- --
Real estate held
for investment,
net of
accumulated
depreciation ......... 293,414 1,745 1,920 3,580 1,554
Investments in
partnerships ......... 4,284 -- -- -- --
Cash and cash
equivalents .......... 11,829 (259) (225) (1,131) (470)
Other assets ............ 12,348 (114) (63) 217 18
------------ ------------ ------------ ------------ ------------
$ 332,774 $ 1,372 $ 1,632 $ 2,666 $ 1,102
============ ============ ============ ============ ============
<CAPTION>
Daley Viewridge
Plaza(2) Building(2) Pro Forma
------------ ------------ ------------
Assets (dollars in thousands)
<S> <C> <C> <C>
Notes and interest
receivable
Performing ........ $ -- $ -- $ 4,357
Nonperforming ..... -- -- 453
------------ ------------ ------------
-- -- 4,810
Less - allowance
for estimated
losses ............... -- -- (891)
------------ ------------ ------------
-- -- 3,919
Foreclosed real
estate held for
sale ................. -- -- 1,356
Real estate held
for sale, net
of accumulated
depreciation ......... -- -- 5,624
Real estate held
for investment,
net of
accumulated
depreciation ......... 4,974 1,967 309,154
Investments in
partnerships ......... -- -- 4,284
Cash and cash
equivalents .......... (1,338) (639) 7,767
Other assets ............ (136) 2 12,272
------------ ------------ ------------
$ 3,500 $ 1,330 $ 344,376
============ ============ ============
</TABLE>
- ----------------------
(1) Includes the Mountain Plaza, Hunters Glen and Bent Tree Garden Apartments
which were purchased in January 1998, the Parkway North Office Building
which was purchased in February 1998, the Plaza on Bachman Creek
retail/office complex which was purchased in March 1998 and excludes the
Shaws Plaza Shopping Center which was sold in March 1998.
(2) Assumes acquisition by the Company on January 1, 1998.
5
<PAGE> 6
TRANSCONTINENTAL REALTY INVESTORS, INC.
PRO FORMA
CONSOLIDATED BALANCE SHEET
March 31, 1998
<TABLE>
<CAPTION>
Emerald
4400 Ashton Way Woodview Terrace
Actual(1) Apartments(2) Apartments(2) Apartments(2) Apartments(2)
------------ ------------ ------------ ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Liabilities and Shareholders' Equity
Liabilities
Notes and interest
payable ........................ $ 242,030 $ 1,350 $ 1,350 $ 2,625 $ 1,075
Other liabilities ................. 6,151 22 282 41 27
------------ ------------ ------------ ------------ ------------
248,181 1,372 1,632 2,666 1,102
Commitments and contingencies
Shareholders' equity
Common Stock,
$.01 par value;
shares; issued
and outstanding,
3,899,487 shares ............... 39 -- -- -- --
Paid-in capital ................... 217,527 -- -- -- --
Accumulated
distributions
in excess of
accumulated
earnings ....................... (132,973) -- -- -- --
------------ ------------ ------------ ------------ ------------
84,593 -- -- -- --
------------ ------------ ------------ ------------ ------------
$ 332,774 $ 1,372 $ 1,632 $ 2,666 $ 1,102
============ ============ ============ ============ ============
<CAPTION>
Daley Viewridge
Plaza(2) Building(2) Pro Forma
------------ ------------ ------------
(dollars in thousands)
<S> <C> <C> <C>
Liabilities and Shareholders' Equity
Liabilities
Notes and interest
payable ........................ $ 3,473 $ 1,330 $ 253,233
Other liabilities ................. 27 -- 6,550
------------ ------------ ------------
3,500 1,330 259,783
Commitments and contingencies
Shareholders' equity
Common Stock,
$.01 par value;
10,000,000
shares; issued
and outstanding,
3,899,487 shares ............... -- -- 39
Paid-in capital ................... -- -- 217,527
Accumulated
distributions
in excess of
accumulated
earnings ....................... -- -- (132,973)
------------ ------------ ------------
-- -- 84,593
------------ ------------ ------------
$ 3,500 $ 1,330 $ 344,376
============ ============ ============
</TABLE>
- -------------------------
(1) Includes the Mountain Plaza, Hunters Glen and Bent Tree Garden Apartments
which were purchased in January 1998, the Parkway North Office Building
which was purchased in February 1998, the Plaza on Bachman Creek
retail/office complex which was purchased in March 1998 and excludes the
Shaws Plaza Shopping Center which was sold in March 1998.
(2) Assumes acquisition by the Company on January 1, 1998.
6
<PAGE> 7
TRANSCONTINENTAL REALTY INVESTORS, INC.
PRO FORMA COMBINED
STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
Mountain Plaza on
Plaza Parkway Bachman 4400 Ashton Way
Actual Apartments North Creek Apartments Apartments
------------ ------------ ------------ ------------ ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Income
Rents ................ $ 16,054 $ 46 $ 163 $ 195 $ 97 $ 137
Interest ............. 218 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
16,272 46 163 195 97 137
Expenses
Property operations .. 8,409 28 57 53 93 120
Interest ............. 5,335 -- -- -- -- --
Depreciation ......... 2,523 -- -- -- -- --
Advisory fee to
affiliate ........... 614 -- -- -- -- --
General and
administrative ...... 579 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
17,460 28 57 53 93 120
Net income (loss)
from operations ...... (1,188) 18 106 142 4 17
Equity in income of
investees ............ (18) -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net income (loss) ........ $ (1,206) $ 18 $ 106 $ 142 $ 4 $ 17
============ ============ ============ ============ ============ ============
Earnings per share
Net (loss) ............ $ (.31)
============
Weighted average
shares of Common
Stock used in
computing
earnings per share .... 3,886,866
============
<CAPTION>
Other
Property Shaws Pro Forma Pro Forma
Purchases Plaza Adjustments Combined
------------ ------------ ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Income
Rents ................ $ 622 $ (157) $ -- $ 17,157
Interest ............. -- -- -- 218
------------ ------------ ------------ ------------
622 (157) -- 17,375
Expenses
Property operations .. 419 (100) -- 9,079
Interest ............. -- (41) 185 5,479
Depreciation ......... -- (56) 203 2,670
Advisory fee to
affiliate ........... -- -- -- 614
General and
administrative ...... -- -- -- 579
------------ ------------ ------------ ------------
419 (197) 388 18,421
Net income (loss)
from operations ...... 203 40 (388) (1,046)
Equity in income of
investees ............ -- -- -- (18)
------------ ------------ ------------ ------------
Net income (loss) ........ $ 203 $ 40 $ (388) $ (1,064)
============ ============ ============ ============
Earnings per share
Net (loss) ............ $ (.27)
============
Weighted average
shares of Common
Stock used in
computing
earnings per share .... 3,886,866
============
</TABLE>
The accompanying footnotes are an integral part of this Pro Forma Combined
Statement of Operations.
7
<PAGE> 8
TRANSCONTINENTAL REALTY INVESTORS, INC.
NOTES TO PRO FORMA COMBINED
STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
1. The Pro Forma Combined Statement of Operations assumes that each property
was purchased or sold by the Company on January 1, 1998. Pro forma
operating results for purchased properties are from January 1 through the
respective dates of purchase only. Results subsequent to the dates of
purchase are included in the "Actual" column.
2. Other property purchases includes Bent Tree Garden, Hunters Glen, Woodview
and Emerald Terrace Apartments, as well as Daley Plaza and View Ridge
Office Buildings. The sellers of these properties were not able to provide
either audited statements of operations or access to the respective
property's financial records to enable the Company to have an audit
performed. These properties in total represent approximately 6.8% of the
Company's assets at December 31, 1997.
3. Statement of operations for the one month ended October 31, 1997 and
November 30, 1997 were obtained for Mountain Plaza Apartments and Parkway
North retail/office complex, respectively. Such statements were used as the
basis for estimating their respective operating results for the three
months ended March 31, 1998. The previous years' actual amounts were used
to estimate the interim period January 1 to the respective dates of
purchase for the remaining properties.
4. Results of operations of purchased properties where the Company was unable
to obtain audited statements of operations were as follows:
<TABLE>
<S> <C>
Revenues:
Bent Tree Garden Apartments $ 111
Hunters Glen Apartments 27
Woodview Apartments 266
Emerald Terrace Apartments 182
Daley Plaza Office Building 29
Viewridge Office Building 7
---------------
Total $ 622
===============
Property Operations Expenses:
Bent Tree Garden Apartments $ 68
Hunters Glen Apartments 17
Woodview Apartments 182
Emerald Terrace Apartments 128
Daley Plaza Office Building 22
Viewridge Office Building 2
---------------
Total $ 419
===============
</TABLE>
8
<PAGE> 9
TRANSCONTINENTAL REALTY INVESTORS, INC.
NOTES TO PRO FORMA COMBINED
STATEMENT OF OPERATIONS - Continued
THREE MONTHS ENDED MARCH 31, 1998
5. The pro forma interest adjustment is based on the mortgages obtained or
assumed and seller financing obtained, if any, for each property at its
respective date of purchase. The pro forma depreciation adjustment is based
on the purchase price of each property depreciated under the Company's
established depreciation policies.
<TABLE>
<S> <C>
Interest:
Bent Tree Garden Apartments $ 38
Hunters Glen Apartments 13
Mountain Plaza Apartments 20
Parkway North Apartments 15
Plaza on Bachman Creek Retail/
Office Complex 18
4400 Apartments 9
Ashton Way Apartments 9
Woodview Apartments 18
Emerald Terrace Apartments 7
Daley Plaza Office Building 27
Viewridge Office Building 11
---------------
Total $ 185
===============
Depreciation:
Bent Tree Garden Apartments $ 43
Hunters Glen Apartments 13
Mountain Plaza Apartments 21
Parkway North Apartments 29
Plaza on Bachman Creek Retail/
Office Complex 18
4400 Apartments 9
Ashton Way Apartments 10
Woodview Apartments 18
Emerald Terrace Apartments 8
Daley Plaza Office Building 24
Viewridge Office Building 10
---------------
Total $ 203
===============
</TABLE>
6. Interim operating results for Shaws Plaza which was sold in March 1998, is
its actual operating results from January 1 to the date of sale.
9
<PAGE> 10
TRANSCONTINENTAL REALTY INVESTORS, INC.
PRO FORMA COMBINED
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Mountain Plaza on
Plaza Parkway Bachman 4400 Ashton Way
Actual Apartments North Creek Apartments Apartments
------------ ------------ ------------ ------------ ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Income
Rents ............. $ 54,462 $ 1,085 $ 938 $ 379 $ 389 $ 548
Interest .......... 1,499 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
55,961 1,085 938 379 389 548
Expenses
Property operations 32,424 592 393 252 372 480
Interest .......... 16,765 -- -- -- -- --
Depreciation ...... 9,578 -- -- -- -- --
Advisory fee to
affiliate ........ 1,807 -- -- -- -- --
Net income fee to
affiliates ....... 1,022 -- -- -- -- --
General and
administrative ... 2,645 -- -- -- -- --
Provision for
losses ........... 1,337 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
65,578 592 393 252 372 480
Income (loss) from
operations ........ (9,617) 493 545 127 17 68
Equity in income of
investees ......... 812 -- -- -- -- --
Gains on sale of
real estate ....... 21,404 -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net income ................ $ 12,599 $ 493 $ 545 $ 127 $ 17 $ 68
============ ============ ============ ============ ============ ============
Earnings per share
Net (loss) ............. $ 3.22
============
Weighted average
shares of Common
Stock used in
computing
earnings per share ..... 3,907,221
============
<CAPTION>
Other
Property Shaws Pro Forma Pro Forma
Purchases Plaza Adjustments Combined
------------ ------------ ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Income
Rents ............. $ 3,300 $ (656) $ -- $ 60,445
Interest .......... -- -- -- 1,499
------------ ------------ ------------ ------------
3,300 (656) -- 61,944
Expenses
Property operations 2,128 (332) -- 36,309
Interest .......... -- (276) 2,225 18,714
Depreciation ...... -- (265) 807 10,120
Advisory fee to
affiliate ........ -- -- -- 1,807
Net income fee to
affiliates ....... -- -- -- 1,022
General and
administrative ... -- -- -- 2,645
Provision for
losses ........... -- (1,337) -- --
------------ ------------ ------------ ------------
2,128 (2,210) 3,032 70,617
Income (loss) from
operations ........ 1,172 1,554 (3,032) (8,673)
Equity in income of
investees ......... -- -- -- 812
Gains on sale of
real estate ....... -- -- -- 21,404
------------ ------------ ------------ ------------
Net income ................ $ 1,172 $ 1,554 $ (3,032) $ 13,543
============ ============ ============ ============
Earnings per share
Net (loss) ............. $ 3.47
============
Weighted average
shares of Common
Stock used in
computing
earnings per share ..... 3,907,221
============
</TABLE>
The accompanying footnotes are an integral part of this Pro Forma Combined
Statement of Operations.
10
<PAGE> 11
TRANSCONTINENTAL REALTY INVESTORS, INC.
NOTES TO PRO FORMA COMBINED
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
1. The Pro Forma Combined Statement of Operations assumes the property was
purchased or sold by the Company on January 1, 1997.
2. Other property purchases includes Bent Tree Garden, Hunters Glen, Woodview
and Emerald Terrace Apartments, as well as Daley Plaza and View Ridge
Office Buildings. The sellers of these properties were not able to provide
either audited statements of operations or access to the respective
property's financial records to enable the Company to have an audit
performed. These properties in total represent approximately 6.8% of the
Company's assets at December 31, 1997.
3. The amounts for Mountain Plaza Apartments, Parkway North Office Building,
Plaza on Bachman Creek retail/office complex, 4400 Apartments and Ashton
Way Apartments are from their respective audited statement of operations.
4. The amounts for Bent Tree Gardens Apartments, Hunters Glen Apartments,
Woodview Apartments, Emerald Terrace Apartments, Viewridge Office Building
and Daley Plaza Office Building are based on available financial
information or estimates made in conjunction with the respective purchase.
<TABLE>
<S> <C>
Revenues:
Bent Tree Garden Apartments $ 1,338
Hunters Glen Apartments 643
Woodview Apartments 797
Emerald Terrace Apartments 436
Viewridge Office Building 69
Daley Plaza Office Building 17
----------------
Total $ 3,300
================
Property Operations:
Bent Tree Garden Apartments $ 809
Hunters Glen Apartments 406
Woodview Apartments 546
Emerald Terrace Apartments 307
Viewridge Office Building 54
Daley Plaza Office Building 6
----------------
Total $ 2,128
================
</TABLE>
11
<PAGE> 12
TRANSCONTINENTAL REALTY INVESTORS, INC.
NOTES TO PRO FORMA COMBINED
STATEMENT OF OPERATIONS - Continued
YEAR ENDED DECEMBER 31, 1997
5. The pro forma interest adjustment is based on the mortgages obtained or
assumed and seller financing obtained, if any, for each property at its
respective date of purchase. The pro forma depreciation adjustment is based
on the purchase price of each property depreciated under the Company's
established depreciation policies.
<TABLE>
<S> <C>
Interest:
Bent Tree Garden Apartments $ 461
Hunters Glen Apartments 152
Mountain Plaza Apartments 242
Parkway North Office Building 175
Plaza on Bachman Creek Retail/
Office Complex 216
4400 Apartments 112
Ashton Way Apartments 112
Woodview Apartments 218
Emerald Terrace Apartments 81
Daley Plaza Office Building 330
Viewridge Office Building 126
----------------
Total $ 2,225
================
Depreciation:
Bent Tree Garden Apartments $ 170
Hunters Glen Apartments 52
Mountain Plaza Apartments 83
Parkway North Office Building 117
Plaza on Bachman Creek Retail/
Office Complex 73
4400 Apartments 35
Ashton Way Apartments 38
Woodview Apartments 72
Emerald Terrace Apartments 31
Daley Plaza Office Building 97
Viewridge Office Building 39
----------------
Total $ 807
================
</TABLE>
6. Operating results for Shaws Plaza are its actual operating results for the
year 1997.
12
<PAGE> 13
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Financial statements of property acquired:
Exhibit
Number Description
- -------- ---------------------------------------------------------------
99.0 Audited Statement of Revenue and Direct Operating Expenses of
Mountain View Apartments for the year ended December 31, 1997,
filed herewith.
99.1 Audited Statement of Revenue and Direct Operating Expenses of
Parkway North for the year ended December 31, 1997, filed
herewith.
99.2 Audited Statement of Revenue and Direct Operating Expenses of
Plaza on Bachman Creek for the year ended December 31, 1997,
filed herewith.
99.3 Audited Statement of Revenue and Direct Operating Expenses of
4400 Apartments for the year ended December 31, 1997, filed
herewith.
99.4 Audited Statement of Revenue and Direct Operating Expenses of
Ashton Way Apartments for the year ended December 31, 1997,
filed herewith.
99.5 Mountain Plaza Statement of Operations for the ten months ended
October 31, 1997, filed herewith.
99.6 Parkway North Statement of Operations for the eleven months
ended November 30, 1997, filed herewith.
13
<PAGE> 14
SIGNATURE PAGE
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 hereto duly authorized.
TRANSCONTINENTAL REALTY INVESTORS,
INC.
Date: September 23, 1998 By: /s/ Thomas A. Holland
------------------------- ---------------------------------
Thomas A. Holland
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
14
<PAGE> 15
TRANSCONTINENTAL REALTY INVESTORS, INC.
EXHIBITS TO
CURRENT REPORT ON FORM 8-K/A
Dated May 29, 1998
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------------------------------------------------- --------
<S> <C> <C>
99.0 Audited Statement of Revenue and Direct Operating 16
Expenses of Mountain View Apartments for the year
ended December 31, 1997.
99.1 Audited Statement of Revenue and Direct Operating 20
Expenses of Parkway North for the year ended
December 31, 1997.
99.2 Audited Statement of Revenue and Direct Operating 24
Expenses of Plaza on Bachman Creek for the year
ended December 31, 1997.
99.3 Audited Statement of Revenue and Direct Operating 28
Expenses of 4400 Apartments for the year ended
December 31, 1997.
99.4 Audited Statement of Revenue of Ashton Way 32
Apartments for the year ended December 31, 1997.
99.5 Mountain Plaza Statement of Operations for the 36
ten months ended October 31, 1997.
99.6 Parkway North Statement of Operations for the 37
eleven months ended November 30, 1997.
</TABLE>
<PAGE> 1
EXHIBIT 99.0
MOUNTAIN PLAZA APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1997
<PAGE> 2
Independent Auditors' Report
To the Board of Trustees
Transcontinental Realty Investors, Inc.
We have audited the accompanying statement of revenues and direct operating
expenses of Mountain Plaza Apartments for the year ended December 31, 1997. This
statement of revenues and direct operating expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
statement of revenues and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Transcontinental Realty Investors, Inc.) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of Mountain Plaza Apartments for the year ended December 31,
1997, in conformity with generally accepted accounting principles.
FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
July 23, 1998
<PAGE> 3
MOUNTAIN PLAZA APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1997
<TABLE>
<S> <C>
REVENUES
Net rental revenues $1,047,047
Other revenues 38,009
----------
Total revenues 1,085,056
DIRECT OPERATING EXPENSES
Salaries and benefits 188,641
Repairs and maintenance 161,808
Utilities 136,233
Property taxes 82,874
Insurance 22,583
----------
Total direct operating expenses 592,139
----------
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 492,917
==========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 4
MOUNTAIN PLAZA APARTMENTS
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1997
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Mountain Plaza Apartments is a 188-unit apartment complex located in
El Paso, Texas. During 1997, the property was owned by State Street
Bank and Trust, TRU.
The accompanying financial statement does not include a provision for
depreciation and amortization, bad debt expense, interest expense, or
income taxes. Accordingly, this statement is not intended to be a
complete presentation of the results of operations.
NOTE 2: ACCOUNTING ESTIMATES
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 revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 3: OTHER REVENUES
Other revenues consist of the following:
<TABLE>
<S> <C>
Late fees $11,371
Laundry income 7,753
Miscellaneous income 7,119
Forfeited deposits 6,748
Vending machine income 5,018
-------
$38,009
=======
</TABLE>
NOTE 4: SUBSEQUENT EVENT
The property was sold to Transcontinental Realty Investors, Inc., a
Nevada corporation, on January 14, 1998.
<PAGE> 1
EXHIBIT 99.1
PARKWAY NORTH
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1997
<PAGE> 2
Independent Auditors' Report
To the Board of Trustees
Transcontinental Realty Investors, Inc.
We have audited the accompanying statement of revenues and direct operating
expenses of Parkway North for the year ended December 31, 1997. This statement
of revenues and direct operating expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
statement of revenues and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Transcontinental Realty Investors, Inc.) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of Parkway North for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
May 21, 1998
<PAGE> 3
PARKWAY NORTH
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1997
<TABLE>
<S> <C>
REVENUES
Net rental revenues $846,076
Other revenues 91,637
--------
Total revenues 937,713
DIRECT OPERATING EXPENSES
Utilities 135,646
Repairs and maintenance 125,567
Property taxes 91,591
Salaries and benefits 25,581
Insurance 14,756
--------
Total direct operating expenses 393,141
--------
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $544,572
========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 4
PARKWAY NORTH
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1997
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Dallas Parkway North is a 71,000 square-foot office building located
in Dallas, Texas. During 1997, the property was owned by Sandler
Southwest Corp.
The accompanying financial statement does not include a provision for
depreciation and amortization, bad debt expense, interest expense, or
income taxes. Accordingly, this statement is not intended to be a
complete presentation of the results of operations.
NOTE 2: ACCOUNTING ESTIMATES
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 revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 3: OTHER REVENUES
Other revenues consist of the following:
<TABLE>
<S> <C>
Operating Expense Recapture $ 91,196
Miscellaneous Income 441
---------
$ 91,637
=========
</TABLE>
NOTE 4: SUBSEQUENT EVENT
The property was sold to Transcontinental Realty Investors, Inc., a
Nevada corporation, on February 18, 1998.
<PAGE> 1
EXHIBIT 99.2
PLAZA ON BACHMAN CREEK
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1997
<PAGE> 2
Independent Auditors' Report
To the Board of Trustees
Transcontinental Realty Investors, Inc.
We have audited the accompanying statement of revenues and direct operating
expenses of Plaza on Bachman Creek for the year ended December 31, 1997. This
statement of revenues and direct operating expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
statement of revenues and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Transcontinental Realty Investors, Inc.) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of Plaza on Bachman Creek for the year ended December 31,
1997, in conformity with generally accepted accounting principles.
FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
July 24, 1998
<PAGE> 3
PLAZA ON BACHMAN CREEK
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1997
<TABLE>
<S> <C>
REVENUES
Net rental revenues $ 378,771
Tenant expense reimbursements 127,729
----------
Total revenues 506,500
DIRECT OPERATING EXPENSES
Property taxes 95,118
Repairs and maintenance 78,926
Utilities 54,000
Insurance 24,067
----------
Total direct operating expenses 252,111
----------
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 254,389
==========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 4
PLAZA ON BACHMAN CREEK
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1997
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Plaza on Bachman Creek is a 80,278 square foot shopping complex
located in Dallas, Texas. During 1997, the property was owned by TCIP
Bachman Creek, LLC.
The accompanying financial statement does not include a provision for
depreciation and amortization, bad debt expense, interest expense, or
income taxes. Accordingly, this statement is not intended to be a
complete presentation of the results of operations.
NOTE 2: ACCOUNTING ESTIMATES
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 revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 3: SUBSEQUENT EVENT
The property was sold to Transcontinental Realty Investors, Inc., a
Nevada corporation, on March 31, 1998.
<PAGE> 1
EXHIBIT 99.3
THE 4400 APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1997
<PAGE> 2
Independent Auditors' Report
To the Board of Trustees
Transcontinental Realty Investors, Inc.
We have audited the accompanying statement of revenues and direct operating
expenses of The 4400 Apartments for the year ended December 31, 1997. This
statement of revenues and direct operating expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
statement of revenues and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Transcontinental Realty Investors, Inc.) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of The 4400 Apartments for the year ended December 31, 1997,
in conformity with generally accepted accounting principles.
FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
June 26, 1998
<PAGE> 3
THE 4400 APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1997
<TABLE>
<S> <C>
REVENUES
Net rental revenues $ 376,706
Other revenues 12,091
----------
Total revenues 388,797
DIRECT OPERATING EXPENSES
Repairs and maintenance 199,102
Salaries and benefits 75,881
Utilities 59,966
Property taxes 30,167
Insurance 7,348
----------
Total direct operating expenses 372,464
----------
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 16,333
==========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 4
THE 4400 APARTMENTS
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1997
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
The 4400 Apartments is a 92-unit apartment complex located in Midland,
Texas. During 1997, the property was owned by Mutual Life Insurance
Company of New York.
The accompanying financial statement does not include a provision for
depreciation and amortization, bad debt expense, interest expense, or
income taxes. Accordingly, this statement is not intended to be a
complete presentation of the results of operations.
NOTE 2: ACCOUNTING ESTIMATES
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 revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 3: OTHER REVENUES
Other revenues consist of the following:
<TABLE>
<S> <C>
Miscellaneous Income $ 6,010
Forfeited deposits 3,020
Application fees 1,705
Late fees 1,356
---------
$ 12,091
=========
</TABLE>
NOTE 4: SUBSEQUENT EVENT
The property was sold to Transcontinental Realty Investors, Inc., a
Nevada corporation, on April 30, 1998.
<PAGE> 1
EXHIBIT 99.4
ASHTON WAY APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1997
<PAGE> 2
Independent Auditors' Report
To the Board of Trustees
Transcontinental Realty Investors, Inc.
We have audited the accompanying statement of revenues and direct operating
expenses of Ashton Way Apartments for the year ended December 31, 1997. This
statement of revenues and direct operating expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
statement of revenues and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Transcontinental Realty Investors, Inc.) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of Ashton Way Apartments for the year ended December 31,
1997, in conformity with generally accepted accounting principles.
FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
June 26, 1998
<PAGE> 3
ASHTON WAY APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1997
<TABLE>
<S> <C>
REVENUES
Net rental revenues $ 503,309
Other revenues 44,945
----------
Total revenues 548,254
DIRECT OPERATING EXPENSES
Repairs and maintenance 172,418
Salaries and benefits 161,148
Utilities 118,910
Property taxes 16,085
Insurance 10,972
----------
Total direct operating expenses 479,533
----------
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 68,721
==========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 4
ASHTON WAY APARTMENTS
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1997
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Ashton Way Apartments is a 178-unit apartment complex located in
Midland, Texas. During 1997, the property was owned by Mutual Life
Insurance Company of New York.
The accompanying financial statement does not include a provision for
depreciation and amortization, bad debt expense, interest expense, or
income taxes. Accordingly, this statement is not intended to be a
complete presentation of the results of operations.
NOTE 2: ACCOUNTING ESTIMATES
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 revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 3: OTHER REVENUES
Other revenues consist of the following:
<TABLE>
<S> <C>
Forfeited deposits $ 19,106
Miscellaneous income 8,224
Late fees 8,045
Laundry income 4,905
Application fees 3,620
Vending income 1,045
---------
$ 44,945
=========
</TABLE>
NOTE 4: SUBSEQUENT EVENT
The property was sold to Transcontinental Realty Investors, Inc., a
Nevada corporation, on April 30, 1998.
<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 99.5
0190 BROWNING YELVINGTON-TEXAS CASH MT. PLAZA APTS & TOWNHOMES/REO, EL PASO 10/97 FINAL 11/03/97 21:59:42
0120 JIM KENT MANAGEMENT REPORT - SUMMARY FOR B ROBERTS PAGE 4 CNG845R
0509 BANKERS TRUST OCTOBER 31, 1997 CURRENT CALENDAR YEAR
10 MONTHS ENDING 10/31/97
849-849 MOUNTAIN PLAZA APTS & TOWNHOME STATUS=00-02-12
188 UNITS ---- C U R R E N T M O N T H ----- ------ Y E A R T O D A T E -------
5000 TAMMIE EDDINS
ACTUAL PER UNIT
ACCOUNT NAME ACTUAL BUDGET VARIANCE ACTUAL BUDGET VARIANCE MONTHLY Y-T-D
- ------------ ---------- ---------- --------- ----------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BASE SCHEDULED RENT 99,044.92 97,955.00 1,089.92 998,253.44 979,550.00 18,703.44 526.83 530.99
PHYSICAL OCCUPANCY RATE 90.18% 93.62% 84.69% 83.62%
DOLLAR OCCUPANCY RATE 89.34% 93.63% 77.54% 83.28%
========= ========= ========= ========= ========== ========= ======= ======
INCOME
Rental Income 88,482.16 91,715.00 3,232.84- 774,034.02 815,739.00 41,704.98- 470.65 411.72
Furnishings .00 .00 .00 .00 .00 .00 .00 .00
Carport/Garage .00 .00 .00 .00 .00 .00 .00 .00
Laundry .00 1,020.00 1,020.00- 7,752.53 9,072.00 1,319.47- .00 4.12
Forfeited Deposits 30.00 702.00 672.00- 4,618.49 6,669.00 2,050.51- .16 2.46
Other Income 2,866.09 1,006.00 1,860.09 18,464.20 9,561.00 8,903.20 15.25 9.82
--------- ---------- -------- ---------- ---------- --------- ------ ------
Total Income 91,378.25 94,443.00 3,064.75- 804,869.24 841,041.00 36,171.76- 486.05 428.12
EXPENSES
Salary-Res Manager 3,396.00- 3,450.00- 54.00 25,652.61- 25,300.00- 352.61- 18.06- 13.64-
Salary-Maintenance 9,178.52- 4,977.00- 4,201.52- 50,680.50- 36,498.00- 14,182.50- 48.82- 26.96-
Salary-Leasing 4,747.96- 3,630.00- 1,117.96- 27,609.71- 26,620.00- 989.71- 25.26- 14.69-
Payroll Burden 3,075.09- 3,954.00- 878.91 25,041.10- 32,236.00- 7,194.90 16.36- 13.32-
Management Fee 3,392.74- 3,542.00- 149.26 25,327.23- 31,540.00- 6,212.77 18.05- 13.47-
Landscaping 1,308.49- 3,500.00- 2,191.51 18,541.07- 26,940.00- 8,398.93 6.96- 9.86-
Repair & Maint 11,559.76- 7,911.00- 3,648.76- 137,438.32- 64,057.00- 73,381.32- 61.49- 73.11-
Utilities 11,602.77- 13,024.00- 1,421.23 118,663.00- 134,630.00- 15,967.00 61.72- 63.12-
Safety/Security 62.85- 32.00- 30.85- 946.59- 395.00- 551.59- .33- .50-
Adv/Prom/Rec 1,790.27- 2,269.00- 478.73 19,799.49- 25,368.00- 5,568.51 9.52- 10.53-
Other Expenses 3,416.02- 844.00- 2,572.02- 17,987.89- 11,757.00- 6,230.89- 18.17- 9.57-
--------- ---------- -------- ---------- ---------- ---------- ------ ------
Total Oper Exp 53,530.47- 47,133.00- 6,397.47- 467,687.51- 415,341.00- 52,346.51- 284.74- 248.77-
OTHER INC/EXP
Property Insurance .00 1,600.00- 1,600.00 11,457.52- 16,000.00- 4,542.48 .00 6.09-
Property Taxes .00 .00 .00 87,123.58- 82,874.00- 4,249.58- .00 46.34-
Other Inc/Exp 3,327.28- 472.00- 2,855.28- 8,699.56- 4,720.00- 3,979.56- 17.70- 4.63-
--------- ---------- --------- ----------- ---------- ---------- ------ ------
Other Inc/Exp 3,327.28- 2,072.00- 1,255.28- 107,280.66- 103,594.00- 3,686.66- 17.70- 57.06-
--------- ---------- --------- ----------- ---------- ---------- ------ ------
Net Operating Income 34,520.50 45,238.00 10,717.50- 229,901.07 322,106.00 92,204.93- 183.62 122.29
Principal .00 .00 .00 .00 .00 .00 .00 .00
Interest .00 .00 .00 .00 .00 .00 .00 .00
Land Lease .00 .00 .00 .00 .00 .00 .00 .00
--------- ---------- --------- ----------- ---------- --------- ------ ------
Tot Debt Service .00 .00 .00 .00 .00 .00 .00 .00
--------- ---------- --------- ---------- ---------- --------- ------ ------
Cash Flow Fr Opts 34,520.50 45,238.00 10,717.50- 229,901.07 322,106.00 92,204.93- 183.62 122.29
Capital Exp 8,990.62- 12,251.00- 3,350.38 146,775.01- 151,970.00- 5,194.99 47.34- 78.07-
Impounds .00 .00 .00 .00 .00 .00 .00 .00
Distribution .00 .00 .00 77,641.72 .00 77,641.72 .00 41.30
--------- ---------- --------- ----------- ---------- --------- ------ ------
Total Non-Op 8,900.62- 12,251.00- 3,350.38- 69,133.29- 151,970.00- 82,836.71 47.34- 36.77-
--------- ---------- --------- ----------- ---------- --------- ------ ------
25,619.88 32,987.00 7,367.12- 160,767.78 170,136.00 9,368.22- 136.28 85.51
Net Cash Flow ========= ========== ========= =========== ========== ========= ====== ======
</TABLE>
<PAGE> 1
16800 DALLAS PARKWAY L.P. EXHIBIT 99.6
Budget Comparison Report
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
ACTUAL BUDGET VARIANCE YTD ACTUAL YTD BUDGET VARIANCE
<S> <C> <C> <C> <C> <C> <C>
INCOME
Rental Income $ 108,186 $ 78,000 $ (30,186) $ 783,744 $ 778,000 $ (5,744)
Operating Exp. Recapture 258 0 (258) 49,104 46,000 (3,104)
Interest Income 0 0 0 560 0 (960)
Miscellaneous Income 52 50 (2) 399 550 151
---------- ---------- ---------- ---------- ---------- ----------
TOTAL INCOME 108,496 78,050 (30,446) 834,207 824,550 (9,557)
NON-RECOVERABLE EXPENSES
ADMINISTRATIVE
Advertising/Promotional 0 0 0 0 2,000 (2,000)
Legal/Accounting 2,625 0 2,625 6,898 0 6,898
Miscellaneous Admin. 0 0 0 92 0 92
Printing 0 0 0 189 0 189
Professional Fees 0 0 0 2,381 2,000 381
---------- ---------- ---------- ---------- ---------- ----------
TOTAL ADMINISTRATIVE 2,625 0 2,625 9,560 4,000 5,560
UTILITIES
---------- ---------- ---------- ---------- ---------- ----------
REPAIRS & MAINTENANCE
---------- ---------- ---------- ---------- ---------- ----------
TAXES & INSURANCE
Other Insurance 0 0 0 1,208 0 1,208
---------- ---------- ---------- ---------- ---------- ----------
TOTAL TAXES & INSURANCE 0 0 0 1,208 0 1,208
---------- ---------- ---------- ---------- ---------- ----------
TOTAL NON-RECOVERABLE EXP 2,625 0 2,625 10,768 4,000 6,768
RECOVERABLE EXPENSES
ADMINISTRATIVE
Advertising/Promotional 0 100 (100) 615 300 315
Credit Bureau 0 0 0 150 0 150
Miscellaneous Admin. 8 0 8 111 300 (189)
Management Fees 5,422 3,900 1,522 45,361 38,900 6,461
Postage/Delivery 15 15 0 262 250 12
Printing 15 0 15 90 0 90
Professional Fees 0 500 (500) 0 9,000 (9,000)
Salaries - Administrative 1,200 1,200 0 13,200 13,200 0
Salaries - Other 933 950 (17) 10,223 10,150 73
Payroll Taxes 84 70 14 965 770 195
Signage 0 0 0 2,756 500 2,256
Supplies 108 50 58 627 200 427
</TABLE>
<PAGE> 2
16800 DALLAS PARKWAY L.P.
Budget Comparison Report
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
ACTUAL BUDGET VARIANCE YTD ACTUAL YTD BUDGET VARIANCE
<S> <C> <C> <C> <C> <C> <C>
Telephone/Pager $ 0 $ 48 $ (48) $ 642 $ 528 $ 114
Travel/Entertainment 35 0 35 35 0 35
------------- -------------- -------------- -------------- -------------- --------------
TOTAL ADMINISTRATIVE 7,820 6,833 987 75,037 74,098 939
UTILITIES
Electricity 9,147 11,000 (1,853) 116,063 125,000 (8,937)
Trash Service 304 300 4 3,686 3,300 386
Water/Sewer 580 600 (20) 6,176 6,650 (474)
------------- -------------- -------------- -------------- -------------- --------------
TOTAL UTILITIES 10,031 11,900 (1,869) 125,925 134,950 (9,025)
REPAIRS & MAINTENANCE
Electrical R&M 530 0 530 2,886 1,100 1,786
Elevators 271 330 (59) 3,478 3,630 (152)
Garage/Parking Lot 0 0 0 0 5,000 (5,000)
HVAC 2,249 1,000 1,249 31,171 16,250 14,921
Janitorial 3,355 3,500 (145) 38,416 38,000 416
Landscape - Exterior 2,243 936 1,307 15,142 12,660 2,482
Landscape - Interior 0 0 0 0 600 (600)
Maintenance - General 0 500 (500) 6,334 5,500 834
Miscellaneous R&M 80 100 (20) 5,839 1,425 4,414
Pest/Exterminating 0 0 0 590 350 240
Plumbing 781 0 781 4,444 600 3,844
Roof Repairs 447 1,000 (553) 2,247 5,100 (2,853)
Security/Locks 326 625 (299) 8,241 6,875 1,366
Supplies 0 35 (35) 73 385 (312)
Window Washing 0 0 0 1,402 2,500 (1,098)
------------- -------------- -------------- -------------- -------------- --------------
TOTAL REPAIRS/MAINTENANCE 10,282 8,026 2,256 120,263 99,975 20,288
TAXES & INSURANCE
Real Estate Taxes 7,131 6,365 766 78,444 70,013 8,431
Property Insurance 235 1,250 (1,015) 7,685 13,750 (6,065)
------------- -------------- -------------- -------------- -------------- --------------
TOTAL TAXES & INSURANCE 7,366 7,615 (249) 86,129 83,763 2,366
------------- -------------- -------------- -------------- -------------- --------------
TOTAL RECOVERABLE EXPENSE 35,499 34,374 1,125 407,354 392,786 14,568
------------- -------------- -------------- -------------- -------------- --------------
TOTAL EXPENSES 38,124 34,374 3,750 418,122 396,786 21,366
------------- -------------- -------------- -------------- -------------- --------------
* NOI BEFORE CAPITAL/DEBT 70,372 43,676 (26,696) 416,085 427,764 11,679
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</TABLE>
