SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from _______ to _______
Commission file number 1-10524
United Dominion Realty Trust, Inc.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0857512
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
10 South Sixth Street Suite 203, Richmond, Virginia 23219-3802
(Address of principal executive offices) (Zip Code)
804-780-2691
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of exchange on which registered
Common Stock $1 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed
all reports to be filed by Section 13 or 15(d) of the Securities Exchange
Actof 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO ____
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statementsincorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of voting shares held by nonaffiliates of
the registrant was approximately $700,000,000* as of March 24, 1995.
51,730,984
(Number of shares of common stock outstanding as of March 24, 1995)
Part I and Part II incorporate certain information by reference from
the registrant's 1994 Annual Report to Shareholders Part III
incorporates certain information by reference from the definitive proxy
statement to be filed with respect to the Annual Meeting of Shareholders
to be held on May 2, 1995.
* In determining this figure, the Trust has assumed that all of its
officers and Directors, and persons known to the Trust to be
beneficial owners of more than 5% of the Trust's shares, are affiliates.
Such assumption should not be deemed to be conclusive for any other
purpose. The aggregate market value has been computed with reference to
the closing sales price reported by the Stock Exchange on March 24, 1995.
Part I
Item 1. Business
United Dominion Realty Trust, Inc. (the "Trust"), a Virginia
corporation, is a self-administered equity real estate investment
trust ("REIT"), formed in 1972, whose business is devoted to one
industry segment, the ownership and operation of income-producing
real estate, primarily apartment communities in the Southeast. The
Trust is a fully integrated real estate company with acquisition,
construction and management capabilities. The Trust acquires,
upgrades and operates its properties with the goals of maximizing its
funds from operations ("FFO") (defined as income before gains [losses]
on investments and extraordinary items adjusted for certain non-cash
items, primarily real estate depreciation) and quarterly
distributions to shareholders, while building equity primarily through
real estate appreciation. Prior to 1991, the Trust's investment
policy was to emphasize the acquisition of under-leased, under-managed,
and/or under-maintained properties that could be physically or otherwise
upgraded and could be acquired at significant discounts from
replacement costs. At the beginning of 1991, changed economic
conditions and the Trust's financial strength enabled it to embark
on a major expansion of its apartment portfolio by taking advantage of
unique buying opportunities resulting from the real estate credit
crisis. This has enabled the Trust to (i) acquire more stable
apartment properties having high occupancy levels and not requiring
substantial renovation, and (ii) enter into new markets including the
Baltimore/Washington area, central and south Florida, and Nashville
and Memphis, Tennessee. During 1994, the Trust also made acquisitions
for the first time in Delaware and Alabama. The properties have been
acquired generally at significant discounts from replacement cost and
at current yields believed to be attractive. The sellers have
included financially distressed real estate limited partnerships, the
RTC, the FDIC, lenders who had foreclosed and insurance companies
seeking to reduce their real estate exposure. During the three years
prior to 1994, the Trust purchased 36 apartment communities with
9,237 units for approximately $250 million. In 1994, the Trust
purchased 47 apartment communities with 11,433 units for approximately
$404 million. This includes 26 apartment communities with 5,318 units
acquired in a portfolio purchase for $171 million, including closing
costs. One of the portfolio properties containing 65 units at a cost of
$1.6 million was subsequently resold. As of March 28, 1995, the
Trust's portfolio of income-producing real estate consisted of 138
properties including 121 apartment complexes, 13 shopping centers, and
4 other properties. (See Item 2. "Properties".)
The Trust is operated so as to qualify as a real estate
investment trust under the applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"). To qualify, the Trust must
meet certain tests which, among other things, require that its assets
consist primarily of real estate, its income be derived primarily from
real estate, and at least 95% of its taxable income be distributed to
its shareholders. Because the Trust qualifies as a REIT, it is
generally not subject to Federal income taxes.
The Trust manages its properties directly, rather than through
outside property management firms. During 1994, the cost of internal
property management of the Trust's apartment properties was
approximately 3.5% of rents collected versus the 4-5% fee typically
charged by independent fee management companies in the Trust's region.
In determining its cost, the Trust considers all direct and indirect
costs associated with the internal property management function.
Near the end of 1992, management of the Trust determined that
the Trust should devote substantially all of its resources to the
apartment business. During 1994, the Trust sold one shopping center
and as of March 28, 1995, the Trust was actively negotiating the sale
of four shopping centers (Glen Lea, Hanover Village, Laburnum Park and
Laburnum Square) in a single transaction. In addition, the Trust
entered into separate and unrelated contracts to sell an industrial
park, shopping center and vacant land at another shopping center for a
total of $3.5 million. There is no assurance that these sales
transactions will be consummated. Although no formal plans for
divestiture have been made, the Trust plans to substantially
liquidate its commercial properties as opportunities arise.
A significant aspect of the Trust's investment strategy has been
to concentrate its investments within the Southeast. The Trust
currently owns properties in the seven coastal states from Delaware
to Florida plus Tennessee and Alabama. This strategy of
geographically focusing on one region, has enabled management to
regularly inspect each property and to monitor developments in local
real estate markets. Over the past few years, the Trust has entered
several new markets within this region including, Washington, D.C.;
Greensboro, North Carolina; Greenville/Spartanburg, South Carolina;
Orlando, Tampa, Clearwater, Melbourne, Ft. Lauderdale/Miami, Florida;
Baltimore, Maryland; Nashville and Memphis, Tennessee; Alabama; and
Delaware. As of December 31, 1994, the Trust's real estate portfolio
was geographically distributed as set forth in the table on the
following page.
<TABLE>
Number of Percentage of Real
Properties Owned Estate Owned at Cost
<S> <C> <C>
Virginia (excludes Northern Virginia)
Richmond 20 11%
Hampton Roads (1) 7 4%
Other 6 1%
33 16%
North Carolina:
Charlotte 12 8%
Raleigh/Durham 9 9%
Wilmington 4 3%
Other 8 4%
33 24%
South Carolina:
Columbia 11 9%
Greenville/Spartanburg 7 3%
Other 4 3%
22 15%
Florida:
Tampa/Clearwater 7 6%
Orlando 6 6%
Miami/Fort Lauderdale 4 5%
Other 4 4%
21 21%
Tennessee:
Nashville 3 2%
Memphis 3 2%
Other 1 1%
7 5%
Georgia:
Atlanta 5 5%
Other 2 2%
7 7%
Baltimore/Washington
(includes Northern Virginia): 11 10%
Alabama: 2 1%
Delaware: 2 1%
Total 138 100%
(1) Includes Virginia Beach, Hampton, Newport News, Portsmouth
and Gloucester.
As a qualified REIT, the Trust distributes a substantial portion
of its cash flow to its shareholders in the form of dividends. Over
the past several years, the Trust has sought to reduce its payout ratio
(the ratio of distributions declared per share to FFO per share) from
above 90% to approximately 75%. For 1994, the dividend payout ratio
was 73% compared to 84% for 1993 and 94% for 1992. For 1994, the
Trust's cash flow from operating activities exceeded cash
distributions to shareholders by approximately $19.5 million. The
Trust utilizes a variety of primarily external financing sources to
fund new acquisitions, property renovations and expansions, major
capital improvements and balloon debt payments. The Trust has
frequently utilized its bank lines of credit to temporarily finance
these expenditures and has subsequently replaced the short-term bank
debt with longer term debt or equity.
At the beginning of 1994, the Trust had approximately $5.8 million
of cash and cash equivalents and $32.4 million of available and unused
bank lines of credit. Since the beginning of the year, the Trust has
added one bank to its bank lending group and expanded its bank lines
of credit to $103.5 million, an increase of $42.5 million. On April 7,
1994, the Trust completed a $75 million public offering of 7 1/4%
senior unsecured notes due April 1, 1999. The notes were priced at
99.833% to yield 7.29% to maturity. Net proceeds of the debt offering
of $74.3 million were utilized to repay, in full, outstanding bank debt
and to fund subsequent apartment acquisitions. Near the end of June,
1994, the Trust completed a public offering of 8,479,400 shares of its
common stock at $14.25 per share. Net proceeds of the offering,
after deducting underwriting commissions and direct offering costs,
aggregated approximately $114.2 million, of which approximately $17.9
million was used to curtail then existing bank debt. The remaining
net proceeds were temporarily invested in short-term money market
investments and were subsequently used to purchase a portfolio of
apartment communities on July 1, 1994. On September 27, 1994, the
Trust completed a $150 million public offering of 8 1/2% Debentures due
September 15, 2024. The Debentures include an investor put feature which
grants the debentureholder a one time option to redeem debentures at
the end of 10 years. The Debentures were priced at 99.689% to yield
8.55% to maturity. During the third quarter, the Trust executed two
interest rate hedge transactions involving futures contracts which
had the effect of reducing the interest rate on the debentures to
8.22% for ten years. These contracts were terminated at the time
debentures were issued. Net proceeds from the sale of the Debentures
aggregated approximately $148.4 million and were used to repay, in
full, then existing bank debt of $115.3 million, and to purchase
an apartment community on September 30, 1994. The remaining net
proceeds were temporarily invested in short-term money market
instruments.
During 1994, the Trust completed nine new tax-exempt
multi-family housing bond financings or assumed such bond financings in
connection with certain acquisitions in the aggregate amount of
approximately $71 million ($12 million of which was defeased pending
refunding). These bonds have maturities ranging from 2007 to 2024, a
weighted average interest rate of 7.03% and a weighted average life of
23 years. In addition, bonds totaling $3 million were refunded with
new bonds totaling $3 million, with a final maturity in 2023, a
weighted average interest rate of 6.48% and a weighted average life of
29 years. Because a portion of the funds raised through these
financing transactions was used to retire or replace debt, the Trust
utilized 27% equity and 73% debt during the year to fund its
apartment acquisition and improvement program. These funds had an
estimated first year cost to the Trust of 8.0%.
In the past, the Trust leveraged a portion of its real
estate portfolio with fixed rate mortgage debt. As the Trust's
capital base has broadened over the past several years primarily
through its sale of Common Stock in seven of the last nine years, its
financial strength and credit standing have improved. The Trust's
senior debt is currently rated BBB+ by Standard & Poor's and Baal by
Moody's. As a result of its investment grade debt ratings, alternate
forms of debt having a lower cost than traditional mortgage financing
have become available. Management anticipates that the Trust will
continue to retire its higher rate mortgage debt when it can be
replaced with lower cost debt or equity. As of March, 1995, 105
properties and phases of several other properties are unencumbered by
mortgage debt. The unencumbered properties have a total cost of
approximately $750 million.
At December 31, 1994, the Trust had $70 million of revolving
credit facilities with four commercial banks. These credit agreements
currently expire in June, 1995 and 1996, but are renewable
annually by mutual agreement between the Trust and each bank.
Borrowings bear interest from LIBOR + 5/8% to the respective bank's
prime rate, depending on the Trust's debt levels as defined in the
respective agreements. At December 31, 1994, the Trust also had $33.5
million of additional available lines of credit with three commercial
banks at rates at or below the respective bank's prime rate. The
Trust will seek to further expand these credit arrangements
during 1995. At December 31, 1994, the Trust had $14.15 million of
borrowings outstanding under the revolving credit facilities and no
borrowings outstanding under its lines of credit.
At the end of 1994, the apartment portion of the Trust's
portfolio included 120 complexes having a total of 29,282 units and
constituting 92% of the Trust's real estate owned, at cost. During
1994, the Trust acquired 46 apartment complexes (net of one resold),
having a total of 11,368 units, a 63.5% increase in the number of units
owned. During 1994, 1993, and 1992, apartments provided approximately
93%, 89% and 85% respectively, of the Trust's rental income. The
Trust's apartments consist primarily of upper middle to moderate income
complexes which make up the broadest segment of the apartment market.
Management believes that well located apartments offer the Trust a
good combination of current income and longer term equity growth.
Although there is no known move toward rent control in any of the
markets in which the Trust now owns apartments, should rent
control legislation be enacted, the Trust's ability to raise
rents to cover increases in operating expenses might be impaired.
While the Trust has been largely unaffected by announced military
cutbacks and base closures, the effect of future defense cuts on the
Trust's region is unknown. As the Trust has expanded beyond Virginia
and North Carolina, it has attempted to avoid markets where the exposure
to reduced defense spending in believed to be high. The Trust has one
property, Indian Hills in Anniston, Alabama, which caters to Fort
McClellan which was included in the list of military base closings
announced by the Defense Department in February, 1995.
Management expects the Trust's apartment business to continue to
be strong during the next two to three years. While vigorous
single-family home buying due to low mortgage rates, lower required
down payments and increased consumer confidence had a moderating
effect on the Trust's occupancy levels during 1993, apartment markets
in the Trust region in 1994 generally benefitted from the combination
of three years of job growth which resulted in strong growth in the
number of renter households and only modest apartment construction.
Management believes that demand for apartments within the
Southeast will remain strong because the Trust's apartment occupancy
approached 95% at the beginning of 1995, it is anticipated that
the Trust will benefit more from higher rent growth in 1995 and 1996
than from occupancy gains.
The volume of new apartment construction (as measured by permits)
has been historically low during the past three years both nationally
and in the Southeast. Apartment construction is projected to remain at
moderate levels in 1995, partly because there will be fewer tax credit
units started and partly because of the higher cost of financing.
Factors such as high impact fees and increasing material prices,
including lumber, make new apartment development and construction
expensive. With few new apartments coming into the market in 1995 and a
steady job growth in the Southeast region, management expects steady
rent growth for the properties currently owned by the Trust in 1995.
The Trust has increased the number of apartments owned by 112%
over the past two years not only because the outlook for apartment
markets has been strong due to job growth and minimal apartment
construction in the Southeast, but also because of several factors
that have created an environment conducive to making attractive
apartment acquisitions:
- Distressed properties requiring rehabilitation and/or
repositioning in the market have continued to be offered for
sale due to financially weak owners and too much debt.
Prior to the 1986 Tax Reform Act, many apartments were
over-financed by syndication groups and limited partnerships
in order to maximize tax write-offs. With too much debt
and not enough growth in occupancy and rents, these
apartments needed an infusion of capital in order to be
properly operated and maintained. However, there was no
incentive for their owners to invest additional capital
because their original inducement, tax benefits, was no
longer available. Consequently, many of these properties were
placed in bankruptcy, were taken back by the lender to be
resold, or have been sold by the owning syndicate and/or
limited partnership.
- There has been a transfer of apartment ownership from
individual investors to institutional owners, primarily
apartment REIT's and pension funds which has created an
adequate supply of both single property and apartment
portfolios for sale. To avoid having to sell their
property, some owners have considered taking their
apartment portfolios public as new REIT's. However, an
uncertain market for initial public offerings makes it
difficult to pursue this alternative to selling. This
uncertainty with initial public offering will continue to
supply the market with acquisition opportunities.
These factors have led to a larger supply of apartments on the
market for sale over the past few years at a time when the Trust's
cost of funds has been at or near historical lows. The competition
for apartment acquisitions has driven prices higher over the past
few years. However, the Trust has been able to locate suitable
apartment properties at acceptable prices within its region.
Apartment acquisitions will continue to play an important role in
the Trust's 1995 operation assuming the continued supply of
apartment product and the availability of investment capital at
acceptable costs. Management believes that apartments will outperform
other areas of investment real estate over the long term.
It is widely believed by those who closely follow the industry
that the next few years will be a period of consolidation for REITs.
Until a few years ago, United Dominion was the only major publicly held
REIT focusing almost exclusively on apartment investments. Since then a
number of new multifamily REITs have been formed. According to the
National Assocation of Real Estate Investment Trusts (NAREIT), there
were 34 apartment REITs as of February 28, 1995. Many of these came to
market at initial stock prices higher than their current stock price
and/or with debt involving material refinancing risks. As a result, some
of these REITs are in need of capital but are either unable to access
the capital markets or the cost of accessing additional capital is too
high. Under pressure from their institutional shareholders, these REITs
may be forced to seek to be acquired by larger, better capitalized REITs
with access to the capital markets, such as the Trust. If consolidation
occurs (and management believes that it will) then the Trust expects to
participate in the process as an acquirer of other apartment REITs when
such transactions are accretive to FFO earnings and can enhance dividend
growth and shareholder value.
At December 31, 1994, commercial properties, primarily
shopping centers, constituted the remaining 8% of the Trust's real
estate owned at cost. During 1994, 1993, and 1992, commercial
properties provided 7%, 11%, and 15%, respectively, of the Trust's
rental income. The commercial portfolio has become and will continue
to become a less material portion of the total portfolio.
Currently, shopping centers are overbuilt in the Southeast.
Additionally, major tenant changes over the last few years from
leveraged buy-outs, recapitalization, and bankruptcies have made the
shopping center business more volatile. The occupancy of the Trust's
eighteen commercial properties was 83% in 1994, however, net operating
income increased 3% as vacancies at larger spaces were offset
during the year by the steady absorption of smaller tenant space at
higher rents.
In most of the Trust's markets, the competition for tenants
among properties is very intense. Some competing properties are larger
and/or newer than the Trust's properties and offer features for
prospective tenants not offered by properties owned by the Trust. The
competitive situation of each property varies and intensifies as
additional properties are constructed.
The Trust expects to continue to aggressively acquire
additional apartment properties within the Southeast during 1995. When
it is in the market for new acquisitions, the Trust competes with
numerous other investors, including REITs, individuals,
partnerships, corporations, pension funds, syndicators, insurance
companies, foreign investors, and other real estate entities.
Management believes that the Trust, in general, is well positioned
in terms of economic and other resources to compete effectively. Even
though the Trust has certain advantages over some of its competitors
because of its substantial presence in the region and its access to
capital, some competing investors are larger than the Trust in terms
of assets and other investment resources and may have a competitive
advantage.
To date, compliance with Federal, State, and local
environmental protection regulations has not had a material effect
upon the capital expenditures, earnings, or competitive position of
the Trust. However, over the past few years, there have been
increasing concerns raised regarding the presence of asbestos and
other hazardous materials in existing real estate properties. In
response to this, on March 1, 1991, the Trust adopted a property
management plan for hazardous materials. As part of the plan, Phase I
environmental site investigation and reports have been completed for
each property owned by the Trust and not previously inspected. In
addition, all proposed acquisitions are inspected prior to
acquisition. In general, within the Trust's region, owners of property
for sale have been required by purchasers to remove or control
asbestos and other environmental hazards prior to the transfer
of the property. Consequently, when the Trust sells properties in
the future, management anticipates that the Trust will similarly be
required to remove or control such hazards, if any. In some cases, the
Trust has abandoned otherwise economically attractive acquisitions
because the costs of removal or control have been prohibitive and/or
the Trust has been unwilling to accept the potential risks involved.
Management believes that thorough professional environmental
inspections and testing for asbestos and other hazardous materials,
coupled with a conservative posture toward accepting known risk, the
Trust can minimize its exposure to potential liability associated
with environmental hazards. The Trust is not aware of any
environmental hazards on or in its properties which individually or in
the aggregate may have a material adverse impact on its operations or
financial position. To the best of its knowledge, the Trust is in
compliance with all applicable environmental rules and regulations.
Item 2. Properties
The table below sets forth a summary of the Trust's portfolio of rental
properties owned at December 31, 1994. See also Notes 1 and 2 to Financial
Statements and Schedule III - Summary of Real Estate Owned.
</TABLE>
<TABLE>
NO. OF UNITS LAND HISTORICAL
YEAR OR SQUARE AREA IN COST ENCUMBRANCES
ACQUIRED FOOTAGE ACRES OCCUPANCY ($000's) ($000's)
<S> <C> <C> <C> <C> <C> <C>
APARTMENTS
2131 Apartments/Nashville, TN 1992 401 24.0 97% $11,415 $ --
Alafaya Woods/Orlando, FL 1994 296 20.0 90% 10,712 --
Alexander Glen/Charlotte, NC 1994 148 15.3 93% 7,195 5,532
Azalea/Richmond, VA 1984 156 11.7 93% 3,918 --
Bay Cove/Clearwater, FL 1992 336 22.0 93% 10,586 --
Bayberry Commons/Portsmouth, VA 1988 192 13.6 94% 4,978 --
Beechwood/Greensboro, NC 1993 208 21.0 97% 7,645 --
Braeland Commons/Columbia, MD 1992 172 8.7 99% 8,856 5,030
Bramblewood/Goldsboro, NC 1984 188 17.7 98% 4,427 705
Brantley Pines/Fort Myers, FL 1994 200 20.0 98% 6,807 --
Briar Club/Memphis, TN 1994 272 12.0 98% 8,282 --
Brynn Marr/Jacksonville, NC 1984 196 20.0 92% 5,204 --
Canterbury Woods/Charlotte, NC 1985 207 19.5 91% 7,071 --
Cedar Point/Raleigh, NC 1985 168 16.8 98% 7,361 --
Cinnamon Ridge/Raleigh, NC 1989 365 19.9 97% 8,244 7,000
Clear Run/Wilmington, NC 1994 228 13.2 97% 9,506 --
Cleary Court/Fort Lauderdale, FL 1994 192 10.3 87% 10,317 --
Colonial Villa/Columbia, SC 1992 296 23.0 94% 7,131 --
Colony of Stone Mountain/Atlanta, GA 1990 404 49.6 78% 11,445 --
Colony Village/New Bern, NC 1984 171 12.4 97% 4,304 --
Copperfield/Fort Lauderdale, FL 1994 352 23.4 90% 24,876 --
Country Walk/Columbia, SC 1991 208 17.4 89% 4,640 --
Courthouse Green/Richmond, VA 1984 266 21.2 96% 6,627 --
Courtney Square/Raleigh, NC 1993 200 23.0 99% 6,745 --
The Cove at Lake Lynn/Raleigh, NC 1992 225 27.5 98% 7,526 --
Covington Crossing/Memphis, TN 1994 231 15.4 89% 5,102 --
Craig Manor/Salem,VA 1987 108 5.5 95% 3,268 --
The Creek/Wilmington, NC 1992 198 10.0 98% 3,660 1,450
Crescent Square/Atlanta, GA 1989 360 29.6 93% 12,055 --
Crossroads/Columbia, SC 1994 622 36.0 88% 15,921 --
Dover Country Club/Dover, DE 1994 224 15.0 97% 8,433 --
Dover Village/Orlando, FL 1993 296 30.0 94% 10,803 --
Eastwind/Virginia Beach, VA 1988 200 10.8 97% 6,703 --
Eden Commons/Columbia, MD 1992 232 12.0 95% 12,144 8,575
Emerald Bay/Charlotte, NC 1990 250 23.9 95% 7,283 --
English Hills/Richmond, VA 1991 576 39.7 92% 16,069 --
Excalibur/Charlotte, NC 1994 240 17.8 95% 9,785 --
Forest Hills/Wilmington, NC 1992 279 24.0 99% 6,979 3,200
Forestbrook/Columbia, SC 1993 180 12.0 94% 4,342 5,000
Foxcroft/Tampa, FL 1993 192 8.7 90% 5,243 --
Gable Hill/Columbia, SC 1989 180 11.1 96% 6,820 --
Gatewater Landing/Glen Burnie, MD 1992 264 13.0 90% 8,615 --
Grand Oaks/Charlotte, NC 1984 243 14.9 93% 7,100 --
Great Oaks/Baltimore, MD 1994 300 21.3 96% 12,064 --
Greentree Place/Jacksonville, FL 1994 352 20.9 94% 13,044 --
Griffin Crossing/Atlanta, GA 1994 272 20.1 93% 9,175 --
Hampton Court/Alexandria, VA 1993 308 13.1 96% 12,501 --
Hampton Forest/Greenville, SC 1994 130 9.4 94% 3,071 --
Hampton Greene/Columbia, SC 1994 304 21.7 98% 11,548 8,072
Harbour Town/Nashville, TN 1993 185 16.5 96% 4,358 --
Harris Pond/Charlotte, NC 1994 170 14.0 96% 7,627 5,188
Heather Lake/Hampton, VA 1980 252 19.7 98% 6,004 --
Heatherwood/Greenville, SC 1993 152 13.0 94% 4,120 --
Heritage Trace/Newport News, VA 1989 200 10.2 97% 4,734 3,900
The Highlands/Charlotte, NC 1984 176 17.2 96% 4,717 --
Holly Tree Park/Waldorf, MD 1994 144 11.0 93% 6,715 --
Hunters Trace/Memphis, TN 1994 192 11.7 98% 7,702 5,970
Hunting Ridge/Greenville, SC 1994 152 9.0 92% 1,463 --
Huntingwood/Lynchburg, VA 1994 114 22.0 93% 3,278 --
Indian Hills/Anniston, AL 1994 140 10.4 96% 3,939 --
Key Pines/Spartanburg, SC 1992 241 20.0 96% 5,274 --
Knolls at Newgate/Fairfax, VA 1994 144 8.4 92% 5,368 --
The Lakes/Nashville, TN 1993 256 44.0 93% 7,833 --
Lake Washington Downs/Melbourne, FL 1993 312 39.3 94% 6,875 --
Lakeside North/Orlando, FL 1994 360 18.0 91% 12,921 12,440
Lakewood Place/Tampa, FL 1994 346 36.2 96% 12,436 --
The Landing/Greenville, SC 1994 224 24.0 92% 6,367 --
Laurel Ridge/Roanoke, VA 1988 216 14.7 98% 4,034 3,000
Laurel Village/Richmond, VA 1991 159 16.3 94% 4,300 --
The Ledges/Winston-Salem, NC 1986 239 15.0 84% 6,636 --
Liberty Crossing/Jacksonville, NC 1990 286 21.0 96% 6,099 1,630
Mallard Green/Charlotte, NC 1994 76 9.5 93% 3,108 --
Marina Park/Miami, FL 1994 88 1.5 90% 3,200 --
Meadow Run/Richmond, VA 1984 204 23.2 96% 5,193 --
Meadowdale Lakes/Richmond, VA 1984 516 55.9 96% 11,046 1,156
Mediterranean Village/Miami, FL 1994 252 8.6 85% 14,049 --
The Melrose/Dumfries, VA 1985 370 24.7 96% 8,202 5,312
Mill Creek/Atlanta, GA 1988 224 16.7 93% 7,846 --
Mill Creek/Wilmington, NC 1991 184 17.8 99% 5,878 --
Northview/Salem, VA 1978 132 6.2 98% 1,937 --
Olde West Village/Richmond, VA 1984/91 502 42.2 91% 15,657 3,929
Orange Orlando, Orlando, FL 1993 165 13.7 94% 4,335 --
Overlook/Greenville, SC 1994 237 12.0 88% 6,021 --
</TABLE>
<PAGE>
Item 2. Properties (continued)
December 31, 1994
<TABLE>
NO. OF UNITS LAND HISTORICAL
YEAR OR SQUARE AREA IN COST ENCUMBRANCE
ACQUIRED FOOTAGE ACRES OCCUPANCY ($000's) ($000's)
<S> <C> <C> <C> <C> <C> <C>
APARTMENTS (CONTINUED):
Palm Grove/Tampa, FL 1994 244 13.5 90% 6,116 --
The Park/Columbia, SC 1994 292 13.6 91% 6,613 --
Park Green/Raleigh, NC 1991 200 11.1 100% 5,615 --
Parkwood Court/Alexandria, VA 1993 189 5.5 93% 7,117 6,200
Patriot Place/Florence, SC 1985 168 9.1 99% 6,297 2,200
Peppertree/Charlotte, NC 1993 292 15.0 95% 9,366 --
Pinebrook/Clearwater, FL 1993 209 17.3 93% 5,618 --
Plum Chase/Columbia, SC 1991 300 22.2 92% 8,300 7,000
Regatta Shores/Orlando, FL 1994 256 12.8 81% 7,443 --
River Place/Macon, GA 1994 240 20.0 88% 8,926 --
River Road/Ettrick, VA 1981 128 17.0 99% 2,673 --
Riverwind/Spartanburg, SC 1993 194 20.8 95% 7,398 --
Rollingwood/Richmond, VA 1984 278 22.2 92% 7,662 2,567
Royal Oaks/Savannah, GA 1994 228 15.0 88% 11,354 6,472
Santa Barbara Landing/Naples, FL 1994 248 41.6 87% 9,205 5,080
The Shire/Raleigh, NC 1994 302 36.6 97% 14,017 --
Somerset/Charleston, SC 1994 240 17.2 77% 4,155 --
St. Andrews/Columbia, SC 1994 232 16.9 94% 7,875 --
St. Andrews Commons/Columbia, SC 1993 336 25.0 97% 11,163 --
Spring Forest/Raleigh, NC 1991 404 42.4 97% 11,455 --
Stanford Village/Atlanta, GA 1989 135 13.6 98% 4,180 --
Summit-On-Park/Charlotte, NC 1984 80 2.8 90% 2,119 --
Summit West/Tampa, FL 1992 264 25.0 98% 7,963 --
Three Fountains/Montgomery, AL 1994 242 16.0 89% 8,910 --
Timbercreek/Richmond, VA 1983 160 14.7 92% 3,496 --
Towne Square/Hopewell, VA 1985 76 3.4 98% 1,783 1,246
Twin Coves/Baltimore, MD 1994 132 9.0 94% 3,850 3,790
Twin Rivers/Hopewell, VA 1982 149 10.0 96% 2,155 --
Village at Old Tampa Bay/Oldsmar, FL 1993 408 55.0 83% 13,026 --
Vinyards/Orlando, FL 1994 400 34.1 70% 13,425 11,250
Walnut Creek/Raleigh, NC 1994 576 82.6 99% 25,141 --
Waterford/Columbia, SC 1994 268 16.8 95% 7,927 --
West Knoll/Newark, DE 1994 100 3.9 95% 3,995 --
Windsor Harbor/Charlotte, NC 1989 200 25.7 90% 6,265 --
Woodland Hollow/Charlotte, NC 1986 252 17.7 88% 7,519 3,300
Woodscape/Newport News, VA 1987 296 21.2 96% 9,730 --
Woodside/Baltimore, MD 1994 366 28.0 93% 12,088 13,790
SHOPPING CENTERS
Circle/Richmond, VA 1973 203,000 17.2 82% 4,210 --
Cumberland Square/Dunn, NC 1986 115,000 17.9 39%(1) 2,263 --
Deerfield Plaza/Myrtle Beach, SC 1984 84,000 9.5 97% 3,668 --
Glen Lea/Richmond, VA 1983 79,000 9.3 100% 3,797 2,438
Gloucester Exchange/Gloucester, VA 1987 104,000 14.2 49%(2) 3,371 --
Hanover Village/Richmond, VA 1986 97,000 27.7 100% 7,393 --
Kroger Sav-On/Waynesboro, VA 1980 49,000 3.9 96% 1,748 --
Laburnum Park/Richmond, VA 1990 71,000 9.3 89% 6,857 --
Laburnum Square/Richmond, VA 1981 99,000 12.3 97% 4,957 1,599
Meadowdale/Richmond, VA 1984 172,000 19.6 97% 6,073 886
Rose Manor/Smithfield, NC 1986 110,000 15.1 67%(3) 1,390 --
The Village/Durham, NC 1986 212,000 21.6 85% 8,250 --
Village Square/Myrtle Beach, SC 1988 182,000 16.8 86% 11,209 --
Willow Oaks/Hampton, VA 1984 188,000 25.3 78% 9,051 3,540
OFFICE AND INDUSTRIAL BUILDINGS
Franklin St./Richmond, VA 1986 7,000 0.1 100% 426 --
Meadowdale Offices/Richmond, VA 1984 11,000 4.8 64%(4) 990 --
Statesman Park/Roanoke, VA 1975 60,000 5.2 67%(5) 749 --
Tri-County Buildings/Bristol, TN 1981 143,000 12.7 100% 2,439 --
</TABLE>
(1) Two anchor tenants occupying more than 60,000 square feet at this
center filed for bankruptcy in 1993. Subsequently, 56,000 square
feet has been leased.
(2) An achor tenant occupying more than 53,000 square feet at this center
filed for bankruptcy in 1993.
(3) An anchor tenant occupying more than 34,800 square feet vacated in May
1992. This property was sold in February 1995.
(4) The Trust has experienced vacancies at this property over the past
several years and has not leased the vacant space.
(5) Building was vacated by anchor tenant on 1993.
<PAGE>
Item 3. Legal proceedings
None
Item 4. Submission of matters to a vote of security holders
No matters were submitted to a vote of the Trust's shareholders
during the last quarter of its fiscal year ended December 31, 1994.
Executive Officers of the Registrant
The executive officers of the Trust, listed below, serve in
their respective capacities for approximate one year terms and are
subject to re-election annually by the Board of Directors, normally
in May of each year.
<TABLE>
Name Age Office Since
<S> <C> <C> <C>
John P. McCann 50 President and Chief 1974
Executive Officer
James Dolphin 45 Senior Vice President 1979
and Chief Financial Officer
Barry M. Kornblau 45 Senior Vice President and 1991
Director of Apartment
Operations
Richard B. Chess 41 Vice President and Director 1987
of Acquisitions
Richard A. Giannotti 39 Vice President and Director 1985
of Construction
Katheryn E. Surface 36 Vice President, Corporate Secretary 1992
and General Counsel
Jerry A. Davis 32 Vice President and Corporate Controller 1989
</TABLE>
Mr. McCann, a Director, has been the Trust's managing officer
since 1974, serving as its President since 1979, its Secretary from 1974
to 1980, and its Treasurer from 1982 to 1985.
Mr. Dolphin, a Director, was first employed by the Trust in May,
1979 as Controller and served as Corporate Secretary from 1980 to
January, 1994. He was elected Vice President of Finance in 1985 and
Senior Vice President in 1987. Prior to joining the Trust, Mr.
Dolphin was employed by Arthur Young and Company, Certified Public
Accountants.
Mr. Kornblau, a Director, joined the Trust in 1991 as Senior
Vice President and Director of Apartment Operations. From 1985 through
1990, he was President and Chief Executive Officer of Summit Realty
Group, Inc. which managed the Trust's apartment properties during that
period. He is a licensed real estate broker and a C.P.M.
Mr. Chess joined the Trust in October, 1987 as Director
of Acquisitions. He was elected Assistant Vice President in 1988
and Vice President in 1989. From 1984 to 1987 he was employed by
Manufacturers Life Insurance Company as Senior Analyst - Real
Estate Syndications. He previously served in the Pennsylvania
General Assembly and is admitted to the practice of law in Virginia and
Pennsylvania.
Mr. Giannotti joined the Trust as Director of Development
and Construction in September, 1985. He was elected Assistant Vice
President in 1988 and Vice President in 1989. Prior to joining the
Trust he was employed as Project Manager by Vaughan Associates,
Architects and by Beckstoffer and Associates, Architects, both of
Richmond, Virginia. He is a registered architect.
Ms. Surface joined the Trust in 1992 as Assistant Vice President
and Legal Counsel and in 1994 was elected General Counsel, Corporate
Secretary and Vice President. From 1986 to 1992, she was an attorney
with the law firm of Hunton and Williams, the Trust's outside counsel.
Mr. Davis joined the Trust in March, 1989 as Controller and
was subsequently elected Assistant Secretary. In 1991 he was
elected Vice President. From 1986 to 1989, he was employed by Crestar
Bank, Richmond, Virginia, as an officer and financial analyst. He was
previously employed by Arthur Young & Company, Certified Public
Accountants, Richmond, Virginia. He is a certified public accountant.
Part II
Item 5. Market for registrant's common equity and related stockholder
matters
Incorporated herein by reference from the captions "Common
Stock Price" and "Shareholders" appearing on the inside back cover of
the Trust's 1994 Annual Report to Shareholders. Information
regarding the Trust's dividend policy is included in Item 7.
Item 6. Selected financial data
Incorporated herein by reference from the caption "Selected
Financial Information" appearing on page 21 of the Trust's 1994
Annual Report to Shareholders.
Item 7. Management's discussion and analysis of financial condition and
results of operations.
Incorporated herein by reference from the caption
"Management's Discussion of Financial Condition and Operations"
appearing on pages 22 through 24 of the Trust's 1994 Annual Report to
Shareholders, exclusive of graphs and related captions appearing
therein.
Item 8. Financial statements and supplementary data
The Trust's consolidated financial statements at December 31, 1994
and 1993 and for each of the three years in the period ended December
31, 1994, and the independent auditor's report thereon and the
Trust's unaudited quarterly financial data for the two-year period
ended December 31, 1994 are incorporated herein by reference from
pages 25 through 36 of the Trust's 1994 Annual Report to
Shareholders.
Item 9. Changes in and disagreements with accountants on accounting and
financial disclosure
None
Part III
Item 10. Directors and executive officers of the registrant
Incorporated herein by reference from the Trust's definitive
proxy statement to be filed with respect to its Annual Meeting of
Shareholders to be held on May 2, 1995.
Information required by this item regarding the executive officers
of the Trust is included in Part I of this Form 10-K in the section
entitled "Executive Officers of the Registrant".
Item 11. Executive compensation
Incorporated herein by reference from the Trust's definitive
proxy statement to be filed with respect to its Annual Meeting of
Shareholders to be held on May 2, 1995.
Item 12. Security ownership of certain beneficial owners and management
Incorporated herein by reference from the Trust's definitive
proxy statement to be filed with respect to its Annual Meeting of
Shareholders to be held on May 2, 1995.
Item 13. Certain relationships and related transactions
Incorporated herein by reference from the Trust's definitive
proxy statement to be filed with respect to its Annual Meeting of
Shareholders to be held on May 2, 1995.
Part IV
Item 14. Exhibits, financial statement schedules, and reports on Form 8-K
(a) The following documents are filed as a part of this report and are
hereby incorporated by reference:
<TABLE>
Page Numbers
Annual Report to Form
Shareholders 10-K
<S> <C> <C>
1. Financial Statements:
Report of Ernst & Young LLP, Independent Auditors 25
Consolidated Balance Sheets at December 31, 1994
and 1993 26
Consolidated Statements of Operations for each of
the three years in the period ended December 31, 1994 27
Consolidated Statements of Shareholders' Equity for
each of the three years in the period ended
December 31, 1994 29
Consolidated Statements of Cash Flows for each of
the three years in the period ended December 31, 1994 28
Notes to financial statements 30 through 36
Supplementary information - Quarterly
financial data (unaudited) 36
</TABLE>
2. Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts 22
Schedule III - Summary of Real Estate Owned 23 - 25
All other schedules are omitted since the required
information is not present or is not present in amounts
sufficient to require submission of the schedule, or
because the information required is included in the
financial statements and notes thereto.
3. Exhibits
The exhibits listed on the accompanying exhibit index
are filed as part of this annual report. See pages 18 - 20.
(b) Reports on Form 8-K
(i) A Form 8-K dated October 14, 1994 was filed with the
Securities and Exchange Commission on October 31, 1994
and amended by a Form 8-K/A dated December 29, 1994.
The filing reported the acquisition of certain
properties which in the aggregate were deemed to be
significant. The financial statements filed as a part
of this report are statements of rental operations of
Copperfield Apartments, Mediterranean Village
Apartments, Briar Club Apartments, Covington Crossing
Apartments and Hunters Trace Apartments.
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
EXHIBIT INDEX
Item 14 (a)
References to pages under the caption "Location" are to
sequentially numbered pages of the manually signed original of this
Form 10-K, and references to exhibits, forms, or other filings
indicate that the form or other filing has been filed, that the
indexed exhibit and the exhibit referred to are the same and that the
exhibit referred to is incorporated by reference.
Exhibit Description Location
<TABLE>
<S> <C> <C>
3(a)(i) Restated Articles of Incorporation Exhibit 3 to the Trust's
Quarterly Report on Form 10-Q
for the quarter ended June 30,
1992
3(a)(ii) Amendment of Restated Articles Exhibit 6(a)(l) to the Trust's Form 8-A
of Incorporation Registration Statement
3(b) By-Laws Exhibit 4(c) to the Trust's
Form S-3 Registration Statement (Registration
No. 33-44743) filed with the Commission on
December 31, 1991
4(i) Specimen Common Stock Exhibit 4(i) to the Trust's Annual Report
Certificate on Form 10-K for the year ended December
31, 1993
4(ii)(a) Loan Agreement dated as of Exhibit 6(c)(l) to the Trust's Form 8-A
November 7, 1991, between the Registration Statement
Trust and Aid Association for
Lutherans
4(ii)(b) Loan Agreement dated as of Exhibit 6(c)(2) to the Trust's Form 8-A
November 14, 1991, between the Registration Statement
Trust and Signet Bank/Virginia
4(ii)(c) Note Purchase Agreement dated Exhibit 6(c)(3) to the Trust's Form 8-A
as February 19, 1992, between Registration Statement
the Trust and Principal Mutual
Life Insurance Company
4(ii)(e) Note Purchase Agreement dated Exhibit 6(c)(5) to the Trust's Form 8-A
as of January 15, 1993, between Registration Statement
the Trust and CIGNA Property
and Casualty Insurance Company,
Connecticut General Life Insurance
Company, Connecticut General Life
Insurance Company, on behalf of
one or more separate accounts,
Insurance Company of North
America, Principal Mutual Life
Insurance Company and Aid
Association for Lutherans
4(ii)(f)(1) Indenture dated as of April 1, 1994, Exhibit 4(ii)(f)(1) to the Trust's
between the Trust and NationsBank Quarterly Report on Form 10-Q for
of Virginia, N.A., as Trustee the quarter ended March 31, 1994
4(ii)(f)(2) Resolution of the Board of Directors Exhibit 4(ii)(f)(2) to the Trust's
of the Trust establishing terms of Quarterly Report on Form 10-Q for
7 1/4% Notes due April 1, 1999 the quarter ended March 31, 1994
4(ii)(f)(3) Form of 7 1/4% Notes due Exhibit 4(ii)(f)(3) to the Trust's
April 1, 1999 Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994
4(ii)(f)(4) Resolution of the Board of Exhibit 4 (ii)(f)(4) to the Trust's
the Trust establishing terms of Quarterly Report on Form 10-Q for
the 8 1/2% Debentures due September the quarter ended September 30, 1994
15, 2024
4(ii)(f)(5) Form of 8 1/2% Debentures Exhibit 4 (ii)(f)(5) to the Trust's
due September 15, 2024 Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994
4(ii)(g) Credit Agreement dated as of Exhibit 6 (c)(6) to the Trust's
December 15, 1994 between the Form 8-A Registration Statement
Trust and First Union National Bank
of Virginia
</TABLE>
The Trust agrees to furnish to the Commission on request a
copy of any instrument with respect to long-term debt of the Trust or
its subsidiary the total amount of securities authorized under which
does not exceed 10% of the total assets of the Trust.
<TABLE>
<S> <C> <C>
10(i) Employment Agreement between Exhibit 10(v)(i)to Form 10-K for
the Trust and John P. McCann the year ended December 31, 1982.
dated October 29, 1982
10(ii) Employment Agreement between Exhibit 10(v)(ii) to Form 10-K for
the Trust and James Dolphin, the year ended December 31, 1982.
dated October 29, 1982.
10(iii) Employment Agreement between Exhibit 10(iii) to Form 10-K for the year
The Trust and Barry M. Kornblau, December 31, 1990.
dated January 1, 1991.
10(iv) 1985 Stock Option Plan, Exhibit B to the Trust's definitive proxy
as amended statement dated April 13, 1992.
10(v) 1991 Stock Purchase and Loan Exhibit 10(v) to Form 10-K for the year
Plan ended December 31, 1991.
13 Proofs of those pages of the 1994 Exhibit 13 to this Form 10-K
Annual Report to Shareholders included herein
that includes information
incorporated by reference into
this Form 10-K
</TABLE>
<TABLE>
<S> <C>
21 The Trust has the following subsidiaries, all of which are wholly owned:
The Commons of Columbia, a Maryland corporation
UDRT of North Carolina, L.L.C., a North Carolina limited liability company
UDRT of Alabama, Inc., an Alabama corporation
</TABLE>
23 Consent of Independent Page 44
Auditors
<PAGE>
ITEM 14(a)(1) and (2), (c) and (d)
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1994
UNITED DOMINION REALTY TRUST, INC.
RICHMOND, VIRGINIA
Schedule II
UNITED DOMINION REALTY TRUST, INC.
VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 1994 and 1993
<TABLE>
Charged to
Balance at Charged to Other
Beginning Costs and Accounts Deductions Balance at End
Description of Period Expenses Describe Describe of Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1994:
Allowance for possible investment $1,564,000 - - - - - - $1,564,000 (1)
Year ended December 31, 1993:
Allowance for possible investment $1,564,000 - - - - - - $1,564,000 (1)
</TABLE>
(1) The balance is netted against the cost of real estate owned on the balance
sheet
<PAGE>
SCHEDULE III.
Summary of Real Estate Owned
<TABLE> Cost of
Improvements
Capitalized Gross Amount at Which
Initial Cost to Trust Subsequent to Carried at Close of Period
Land and Buildings Acquisition Land and Buildings
Land and (Net of Land and
Encumbrances Improvements Improvements Disposals) Improvements Improvements
<S> <C> <C> <C> <C> <C> <C>
Apartments:
2131 Apartments/Nashville, TN $ -- $ 869,860 $ 9,155,185 $ 1,390,014 $ 1,014,095 $ 10,400,964
Alafaya Woods/Orlando, FL -- 1,653,000 9,042,256 16,478 1,653,000 9,058,734
Alexander Glen/Charlotte, NC 5,531,960 698,860 6,488,061 7,625 698,860 6,495,686
Azalea/Richmond, VA -- 272,522 2,721,686 924,076 399,136 3,519,148
Bay Cove/Clearwater, FL -- 2,928,847 6,578,257 1,079,187 3,087,150 7,499,141
Bayberry Commons/Portsmouth, VA -- 516,800 3,485,645 975,281 692,456 4,285,270
Beechwood/Greensboro, NC -- 1,409,377 6,086,677 148,993 1,499,630 6,145,417
Braeland Commons/Columbia, MD 5,030,000 1,564,942 7,006,574 284,927 1,611,272 7,245,171
Bramblewood/Goldsboro, NC 705,117 401,538 3,150,912 874,940 495,695 3,931,695
Brantley Pines/Fort Myers, FL -- 841,400 5,914,766 50,670 849,500 5,957,336
Briar Club/Memphis, TN -- 1,214,400 6,928,959 138,966 1,214,400 7,067,925
Brynn Marr/Jacksonville, NC -- 432,974 3,821,508 949,440 524,988 4,678,934
Canterbury Woods/Charlotte, NC -- 409,675 5,011,435 1,649,712 542,788 6,528,034
Cedar Point/Raleigh, NC -- 75,400 4,514,435 2,770,827 228,439 7,132,223
Cinnamon Ridge/Raleigh, NC 7,000,000 967,230 3,337,197 3,939,471 1,262,601 6,981,297
Clear Run/Wilmington, NC -- 874,830 8,586,978 43,867 884,888 8,620,787
Cleary Court/Fort Lauderdale, FL -- 2,399,848 7,913,450 4,000 2,399,848 7,917,450
Colonial Villa/Columbia, SC -- 1,014,181 5,100,269 1,016,219 1,362,684 5,767,985
Colony of Stone Mountain/Atlanta, GA -- 3,160,000 5,641,646 2,643,059 3,865,093 7,579,612
Colony Village/New Bern, NC -- 346,330 3,036,956 920,967 456,362 3,847,891
Copperfield/Fort Lauderdale, FL -- 4,424,128 20,428,969 23,196 4,431,528 20,444,765
Country Walk/Columbia, SC -- 422,112 3,133,623 1,084,567 629,483 4,010,819
Courthouse Green/Richmond, VA -- 732,050 4,702,353 1,192,507 911,317 5,715,593
Courtney Square/Raleigh, NC -- 1,114,600 5,119,259 511,506 1,207,588 5,537,777
The Cove at Lake Lynn/Raleigh, NC -- 1,723,363 5,303,760 498,564 1,850,093 5,675,594
Covington Crossing/Memphis, TN -- 1,296,240 3,792,590 13,185 1,296,240 3,805,775
Craig Manor/Salem,VA -- 282,200 2,419,570 565,977 342,063 2,925,684
The Creek/Wilmington, NC 1,450,000 417,500 2,506,206 735,981 456,598 3,203,089
Crescent Square/Atlanta, GA -- 1,057,000 6,865,036 4,132,899 1,329,602 10,725,333
Crossroads/Columbia, SC -- 2,074,800 13,710,803 135,221 2,080,800 13,840,024
Dover Country Club/Dover, DE -- 2,007,878 6,347,331 77,633 2,007,878 6,424,964
Dover Village/Orlando, FL -- 2,894,702 6,456,100 1,452,031 3,088,821 7,714,012
Eastwind/Virginia Beach, VA -- 155,000 5,316,738 1,231,435 291,688 6,411,485
Eden Commons/Columbia, MD 8,575,000 2,361,167 9,384,170 398,201 2,420,231 9,723,308
Emerald Bay/Charlotte, NC -- 626,070 4,722,862 1,934,195 1,122,575 6,160,552
English Hills/Richmond, VA -- 1,979,174 11,524,313 2,565,125 2,423,754 13,644,858
Excalibur/Charlotte, NC -- 1,115,261 8,629,877 39,781 1,115,261 8,669,658
Forest Hills/Wilmington, NC 3,200,000 1,028,000 5,420,478 530,550 1,134,232 5,844,796
Forestbrook/Columbia, SC 5,000,000 395,516 2,902,040 1,044,460 530,969 3,811,047
Foxcroft/Tampa, FL -- 749,400 3,927,644 566,442 912,892 4,330,594
Gable Hill/Columbia, SC -- 824,847 5,307,194 687,970 1,044,829 5,775,182
Gatewater Landing/Glen Burnie, MD -- 2,078,422 6,084,526 452,082 2,096,203 6,518,827
Grand Oaks/Charlotte, NC -- 446,075 4,463,344 2,190,620 788,490 6,311,549
Great Oaks/Baltimore, MD -- 2,919,481 9,075,956 68,191 2,922,981 9,140,647
Greentree Place/Jacksonville, FL -- 1,634,330 11,226,990 182,805 1,659,506 11,384,619
Griffin Crossing/Atlanta, GA -- 1,509,633 7,544,018 121,333 1,520,505 7,654,479
Hampton Court/Alexandria, VA -- 7,388,420 4,811,937 301,052 7,501,319 5,000,090
Hampton Forest/Greenville, SC -- 454,140 2,578,103 38,522 463,455 2,607,310
Hamtpon Greene/Columbia, SC 8,071,850 1,363,046 10,118,453 66,183 1,370,413 10,177,269
Harbour Town/Nashville, TN -- 572,567 3,522,092 262,983 679,784 3,677,858
Harris Pond/Charlotte, NC 5,188,360 886,788 6,714,647 25,498 886,788 6,740,145
Heather Lake/Hampton, VA -- 616,800 3,400,672 1,986,142 781,743 5,221,871
Heatherwood/Greenville, SC -- 354,566 3,234,105 531,278 425,922 3,694,027
Heritage Trace/Newport News, VA 3,900,000 880,000 2,312,285 1,541,227 1,149,766 3,583,746
The Highlands/Charlotte, NC -- 321,400 2,830,346 1,565,087 523,268 4,193,565
Holly Tree Park/Waldorf, MD -- 1,576,366 5,095,323 43,430 1,578,731 5,136,388
Hunters Trace/Memphis, TN 5,970,000 888,440 6,676,552 136,608 888,440 6,813,160
Hunting Ridge/Greenville, SC -- 449,500 984,882 28,264 455,225 1,007,421
Huntingwood/Lynchburg, VA -- 723,650 2,527,535 26,653 723,650 2,554,188
Indian Hills/Anniston, AL -- 338,335 3,575,585 24,851 338,335 3,600,436
Depreciable
Life of
Total Accumulated Date of Date Building
(a) Depreciation Construction Acquired Component
<S> <C> <C> <C> <C> <C>
Apartments:
2131 Apartments/Nashville, TN $ 11,415,059 $ 671,297 1972 12/16/92 35 yrs.
Alafaya Woods/Orlando, FL 10,711,734 41,599 1988/90 10/21/94 35 yrs.
Alexander Glen/Charlotte, NC 7,194,546 83,051 1989 08/16/94 35 yrs.
Azalea/Richmond, VA 3,918,284 1,486,349 1967 12/31/84 35 yrs.
Bay Cove/Clearwater, FL 10,586,291 576,571 1972 12/16/92 35 yrs.
Bayberry Commons/Portsmouth, VA 4,977,726 1,398,448 1973/74 04/07/88 35 yrs.
Beechwood/Greensboro, NC 7,645,047 246,260 1985 12/22/93 35 yrs.
Braeland Commons/Columbia, MD 8,856,443 537,256 1983 12/29/92 35 yrs.
Bramblewood/Goldsboro, NC 4,427,390 1,595,052 1980/82 12/31/84 35 yrs.
Brantley Pines/Fort Myers, FL 6,806,836 84,668 1986 08/11/94 35 yrs.
Briar Club/Memphis, TN 8,282,325 53,875 1987 10/14/94 35 yrs.
Brynn Marr/Jacksonville, NC 5,203,922 1,904,231 1973/77 12/31/84 35 yrs.
Canterbury Woods/Charlotte, NC 7,070,822 2,378,140 1968/70 12/18/85 35 yrs.
Cedar Point/Raleigh, NC 7,360,662 3,119,137 1972 12/18/85 35 yrs.
Cinnamon Ridge/Raleigh, NC 8,243,898 2,214,030 1968/70 12/01/89 35 yrs.
Clear Run/Wilmington, NC 9,505,675 130,814 1987/89 07/22/94 35 yrs.
Cleary Court/Fort Lauderdale, FL 10,317,298 22,342 1984/85 11/30/94 35 yrs.
Colonial Villa/Columbia, SC 7,130,669 514,082 1974 09/16/92 35 yrs.
Colony of Stone Mountain/Atlanta, GA 11,444,705 2,047,984 1970/72 06/12/90 35 yrs.
Colony Village/New Bern, NC 4,304,253 1,650,050 1972/74 12/31/84 35 yrs.
Copperfield/Fort Lauderdale, FL 24,876,293 170,489 1991 09/21/94 35 yrs.
Country Walk/Columbia, SC 4,640,302 636,082 1974 12/19/91 35 yrs.
Courthouse Green/Richmond, VA 6,626,910 2,332,971 1974/78 12/31/84 35 yrs.
Courtney Square/Raleigh, NC 6,745,365 307,361 1979/81 07/08/93 35 yrs.
The Cove at Lake Lynn/Raleigh, NC 7,525,687 536,304 1986 12/01/92 35 yrs.
Covington Crossing/Memphis, TN 5,102,015 32,910 1974 10/14/94 35 yrs.
Craig Manor/Salem,VA 3,267,747 884,870 1975 11/06/87 35 yrs.
The Creek/Wilmington, NC 3,659,687 360,160 1973 06/30/92 35 yrs.
Crescent Square/Atlanta, GA 12,054,935 2,754,988 1970 03/22/89 35 yrs.
Crossroads/Columbia, SC 15,920,824 255,043 1977/84 07/01/94 35 yrs.
Dover Country Club/Dover, DE 8,432,842 110,649 1970 07/01/94 35 yrs.
Dover Village/Orlando, FL 10,802,833 533,974 1981 03/31/93 35 yrs.
Eastwind/Virginia Beach, VA 6,703,173 1,933,914 1970 04/04/88 35 yrs.
Eden Commons/Columbia, MD 12,143,539 736,379 1984 12/29/92 35 yrs.
Emerald Bay/Charlotte, NC 7,283,127 1,643,744 1972 02/06/90 35 yrs.
English Hills/Richmond, VA 16,068,612 1,952,962 1969/76 12/06/91 35 yrs.
Excalibur/Charlotte, NC 9,784,919 151,877 1987 07/01/94 35 yrs.
Forest Hills/Wilmington, NC 6,979,028 563,101 1964/69 06/30/92 35 yrs.
Forestbrook/Columbia, SC 4,342,016 235,756 1974 07/01/93 35 yrs.
Foxcroft/Tampa, FL 5,243,486 337,216 1972 01/28/93 35 yrs.
Gable Hill/Columbia, SC 6,820,011 1,262,300 1985 12/04/89 35 yrs.
Gatewater Landing/Glen Burnie, MD 8,615,030 507,231 1970 12/16/92 35 yrs.
Grand Oaks/Charlotte, NC 7,100,039 2,813,353 1966/67 05/01/84 35 yrs.
Great Oaks/Baltimore, MD 12,063,628 165,850 1974 07/01/94 35 yrs.
Greentree Place/Jacksonville, FL 13,044,125 148,366 1986 07/22/94 35 yrs.
Griffin Crossing/Griffin, GA 9,174,984 173,724 1987/89 06/08/94 35 yrs.
Hampton Court/Alexandria, VA 12,501,409 396,786 1967 02/19/93 35 yrs.
Hampton Forest/Greenville, SC 3,070,765 37,815 1968 08/16/94 35 yrs.
Hamtpon Greene/Columbia, SC 11,547,682 129,506 1990 08/19/94 35 yrs.
Harbour Town/Nashville, TN 4,357,642 159,745 1974 12/10/93 35 yrs.
Harris Pond/Charlotte, NC 7,626,933 116,368 1987 07/01/94 35 yrs.
Heather Lake/Hampton, VA 6,003,614 3,043,689 1972/74 03/01/80 35 yrs.
Heatherwood/Greenville, SC 4,119,949 187,521 1978 09/30/93 35 yrs.
Heritage Trace/Newport News, VA 4,733,512 1,262,942 1973 06/30/89 35 yrs.
The Highlands/Charlotte, NC 4,716,833 2,117,018 1970 01/17/84 35 yrs.
Holly Tree Park/Waldorf, MD 6,715,119 90,344 1973 07/01/94 35 yrs.
Hunters Trace/Memphis, TN 7,701,600 49,206 1986 10/14/94 35 yrs.
Hunting Ridge/Greenville, SC 1,462,646 11,509 1972 11/01/94 35 yrs.
Huntingwood/Lynchburg, VA 3,277,838 50,925 1976 07/01/94 35 yrs.
Indian Hills/Anniston, AL 3,938,771 66,110 1975 07/01/94 35 yrs.
</TABLE>
<PAGE>
SCHEDULE III.
Summary of Real Estate Owned (continued)
<TABLE>
Cost of
Improvements
Capitalized Gross Amount at Which
Initial Cost to Subsequent to Carried at Close of Period
Land and Buildings Acquisition Land and Buildings
Land and (Net of Land and
Encumbrances Improvements Improvements Disposals) Improvements Improvements
<S> <C> <C> <C> <C> <C> <C>
Apartments (continued):
Key Pines/Spartanburg, SC $ -- $ 601,693 $ 3,773,304 $ 898,673 $ 693,916 $ 4,579,754
Knolls at Newgate/Fairfax, VA -- 1,725,725 3,518,741 123,595 1,732,925 3,635,136
The Lakes/Nashville, TN -- 1,285,657 5,980,197 566,860 1,405,520 6,427,194
Lake Washington Downs/Melbourne, FL -- 1,434,450 4,940,166 500,784 1,566,481 5,308,919
Lakeside North/Orlando, FL 12,440,000 1,532,700 11,076,062 311,983 1,572,018 11,348,727
Lakewood Place/Tampa, FL -- 1,395,051 10,647,377 394,003 1,492,758 10,943,673
The Landing/Greenville, SC -- 685,000 5,622,454 59,471 694,150 5,672,775
Laurel Ridge/Roanoke, VA 3,000,000 445,400 2,531,357 1,057,196 648,390 3,385,563
Laurel Village/Richmond, VA -- 694,281 3,119,716 485,597 775,036 3,524,558
The Ledges/Winston-Salem, NC -- 492,283 1,561,947 4,582,132 1,108,507 5,527,855
Liberty Crossing/Jacksonville, NC 1,629,756 840,000 3,873,139 1,385,454 1,096,050 5,002,543
Mallard Green/Charlotte, NC -- 329,300 2,766,436 11,802 329,300 2,778,238
Marina Park/Miami, FL -- 536,850 2,652,851 10,363 536,850 2,663,214
Meadow Run/Richmond, VA -- 636,059 3,423,884 1,132,774 834,395 4,358,322
Meadowdale Lakes/Richmond, VA 1,156,344 1,581,671 6,717,237 2,746,836 2,149,959 8,895,785
Mediterranean Village/Miami, FL -- 2,064,788 11,939,113 44,929 2,064,788 11,984,042
The Melrose/Dumfries, VA 5,312,182 662,000 3,705,404 3,837,259 1,329,494 6,875,169
Mill Creek/Atlanta, GA -- 529,800 3,996,252 3,320,029 859,815 6,986,266
Mill Creek/Wilmington, NC -- 597,248 4,618,561 662,414 786,992 5,091,230
Northview/Salem, VA -- 171,600 1,238,501 527,153 216,569 1,720,685
Olde West Village/Richmond, VA 3,929,235 1,965,097 12,203,965 1,487,873 2,207,941 13,448,994
Orange Orlando/Orlando, FL -- 1,233,151 2,177,417 924,631 1,378,548 2,956,651
Overlook/Greenville, SC -- 824,600 5,079,443 116,596 824,600 5,196,039
Palm Grove/Tampa, FL -- 616,121 5,268,814 231,261 632,368 5,483,828
The Park/Columbia, SC -- 1,004,072 5,535,334 73,987 1,006,222 5,607,171
Park Green/Raleigh, NC -- 500,000 4,321,872 792,992 549,179 5,065,685
Parkwood Court/Alexandria, VA 6,200,000 2,482,633 3,813,116 821,275 2,549,023 4,568,001
Patriot Place/Florence, SC 2,200,000 212,500 1,600,757 4,483,623 1,346,426 4,950,454
Peppertree/Charlotte, NC -- 1,546,267 7,699,221 120,859 1,554,703 7,811,644
Pinebrook/Clearwater,FL -- 1,780,375 2,458,172 1,379,741 1,827,406 3,790,882
Plum Chase/Columbia, SC 7,000,000 802,750 3,149,607 4,347,490 1,073,973 7,225,874
Regatta Shores/Orlando, FL -- 757,008 6,607,367 78,960 781,131 6,662,204
River Place/Macon, GA -- 1,097,280 7,492,385 336,592 1,296,457 7,629,800
River Road/Ettrick, VA -- 229,699 1,648,394 795,375 314,957 2,358,511
Riverwind/Spartanburg, SC -- 802,484 6,386,212 209,119 860,836 6,536,979
Rollingwood/Richmond, VA 2,567,049 777,971 5,058,707 1,825,382 1,048,247 6,613,813
Royal Oaks/Savannah, GA 6,471,555 533,100 10,777,978 43,392 533,100 10,821,370
Santa Barbara Landing/Naples, FL 5,080,343 1,134,120 8,019,814 50,677 1,134,120 8,070,491
The Shire/Raleigh, NC -- 1,791,215 11,968,852 257,117 1,824,386 12,192,798
Somerset/Charleston, SC -- 485,160 3,573,792 96,480 487,237 3,668,195
St. Andrews/Columbia, SC -- 976,192 6,866,147 32,828 976,192 6,898,975
St. Andrews Commons/Columbia, SC -- 1,428,826 9,371,378 362,531 1,541,570 9,621,165
Spring Forest/Raleigh, NC -- 1,257,500 8,586,255 1,610,801 1,383,586 10,070,970
Stanford Village/Atlanta, GA -- 884,500 2,807,839 487,665 1,015,078 3,164,926
Summit-on-Park/Charlotte, NC -- 147,000 1,021,602 949,998 240,032 1,878,568
Summit West/Tampa, FL -- 2,176,500 4,709,970 1,076,468 2,348,038 5,614,900
Three Fountains/Montgomery, AL -- 1,075,009 7,753,156 81,668 1,083,009 7,826,824
Timbercreek/Richmond, VA -- 379,000 2,030,525 1,086,682 516,962 2,979,245
Towne Square/Hopewell, VA 1,246,058 109,500 909,897 763,152 325,585 1,456,964
Twin Coves/Baltimore, MD 3,790,000 912,771 2,893,861 43,740 922,921 2,927,451
Twin Rivers/Hopewell, VA -- 149,200 885,671 1,120,107 350,443 1,804,535
Village at Old Tampa Bay/Oldsmar, FL -- 1,750,320 10,756,337 519,418 1,976,746 11,049,329
Vinyards/Orlando, FL 11,250,048 1,840,230 11,571,625 12,815 1,840,230 11,584,440
Walnut Creek/Raleigh, NC -- 3,170,290 21,717,407 253,210 3,200,300 21,940,607
Waterford/Columbia, SC -- 957,980 6,926,736 42,287 957,980 6,969,023
West Knoll/Newark, DE -- 305,138 3,664,067 25,964 305,138 3,690,031
Windsor Harbor/Charlotte, NC -- 475,000 3,928,113 1,862,283 873,449 5,391,947
Woodland Hollow/Charlotte, NC 3,300,458 755,000 5,393,023 1,371,225 902,934 6,616,314
Woodscape/Newport News, VA -- 798,700 7,209,525 1,721,472 1,006,107 8,723,590
Woodside/Baltimore, MD 13,790,000 3,112,881 8,864,762 111,132 3,112,881 8,975,894
Depreciable
Life of
Total Accumulated Date of Date Building
(a) Depreciation Construction Acquired Component
<S> <C> <C> <C> <C> <C>
Apartments (continued):
Key Pines/Spartanburg, SC $ 5,273,670 $ 446,314 1974 09/25/92 35 yrs.
Knolls at Newgate/Fairfax, VA 5,368,061 70,927 1972 07/01/94 35 yrs.
The Lakes/Nashville, TN 7,832,714 325,417 1986 09/15/93 35 yrs.
Lake Washington Downs/Melbourne, FL 6,875,400 267,911 1984 09/24/93 35 yrs.
Lakeside North/Orlando, FL 12,920,745 273,025 1984 04/14/94 35 yrs.
Lakewood Place/Tampa, FL 12,436,431 316,771 1986 03/10/94 35 yrs.
The Landing/Greenville, SC 6,366,925 102,495 1976 07/01/94 35 yrs.
Laurel Ridge/Roanoke, VA 4,033,953 1,222,933 1970/72 05/17/88 35 yrs.
Laurel Village/Richmond, VA 4,299,594 554,626 1972 09/06/91 35 yrs.
The Ledges/Winston-Salem, NC 6,636,362 2,772,056 1959 08/13/86 35 yrs.
Liberty Crossing/Jacksonville, NC 6,098,593 1,201,195 1972/74 11/30/90 35 yrs.
Mallard Green/Charlotte, NC 3,107,538 50,058 1985 07/01/94 35 yrs.
Marina Park/Miami, FL 3,200,064 54,955 1974 07/01/94 35 yrs.
Meadow Run/Richmond, VA 5,192,717 1,937,275 1973/74 12/31/84 35 yrs.
Meadowdale Lakes/Richmond, VA 11,045,744 3,962,507 1967/71 12/31/84 35 yrs.
Mediterranean Village/Miami, FL 14,048,830 100,605 1989 09/30/94 35 yrs.
The Melrose/Dumfries, VA 8,204,663 2,930,274 1951 12/11/85 35 yrs.
Mill Creek/Atlanta, GA 7,846,081 2,009,265 1972 11/11/88 35 yrs.
Mill Creek/Wilmington, NC 5,878,222 732,780 1986 09/30/91 35 yrs.
Northview/Salem, VA 1,937,254 1,019,682 1969 09/29/78 35 yrs.
Olde West Village/Richmond, VA 15,656,935 4,085,930 1978/82/85/87 12/31/84 & 8/27/91 35 yrs.
Orange Orlando/Orlando, FL 4,335,199 285,979 1971 01/21/93 35 yrs.
Overlook/Greenville, SC 6,020,639 95,414 1976 07/01/94 35 yrs.
Palm Grove/Tampa, FL 6,116,196 169,485 1969/71 04/15/94 35 yrs.
The Park/Columbia, SC 6,613,393 92,964 1975/77 07/01/94 35 yrs.
Park Green/Raleigh, NC 5,614,864 771,682 1987 09/27/91 35 yrs.
Parkwood Court/Alexandria, VA 7,117,024 253,356 1964 06/30/93 35 yrs.
Patriot Place/Florence, SC 6,296,880 1,968,990 1974 10/23/85 35 yrs.
Peppertree/Charlotte, NC 9,366,347 321,522 1987 12/14/93 35 yrs.
Pinebrook/Clearwater,FL 5,618,288 197,391 1977 09/28/93 35 yrs.
Plum Chase/Columbia, SC 8,299,847 1,656,205 1974 01/04/91 35 yrs.
Regatta Shores/Orlando, FL 7,443,335 126,332 1988 06/30/94 35 yrs.
River Place/Macon, GA 8,926,257 218,746 1988 04/08/94 35 yrs.
River Road/Ettrick, VA 2,673,468 1,299,045 1973/74 08/31/81 35 yrs.
Riverwind/Spartanburg, SC 7,397,815 267,013 1987 12/31/93 35 yrs.
Rollingwood/Richmond, VA 7,662,060 2,937,456 1974/78 12/31/84 35 yrs.
Royal Oaks/Savannah, GA 11,354,470 182,542 1980 07/01/94 35 yrs.
Santa Barbara Landing/Naples, FL 9,204,611 94,605 1987 09/01/94 35 yrs.
The Shire/Raleigh, NC 14,017,184 341,701 1982/84 03/04/94 35 yrs.
Somerset/Charleston, SC 4,155,432 64,559 1979 07/01/94 35 yrs.
St. Andrews/Columbia, SC 7,875,167 126,675 1972 07/01/94 35 yrs.
St. Andrews Commons/Columbia, SC 11,162,735 699,019 1986 05/20/93 35 yrs.
Spring Forest/Raleigh, NC 11,454,556 1,661,948 1978/81 05/21/91 35 yrs.
Stanford Village/Atlanta, GA 4,180,004 896,160 1985 09/26/89 35 yrs.
Summit-on-Park/Charlotte, NC 2,118,600 992,628 1963 01/17/84 35 yrs.
Summit West/Tampa, FL 7,962,938 426,047 1972 12/16/92 35 yrs.
Three Fountains/Montgomery, AL 8,909,833 142,321 1973 07/01/94 35 yrs.
Timbercreek/Richmond, VA 3,496,207 1,578,883 1969 08/31/83 35 yrs.
Towne Square/Hopewell, VA 1,782,549 766,586 1967 08/27/85 35 yrs.
Twin Coves/Baltimore, MD 3,850,372 38,843 1974 08/16/94 35 yrs.
Twin Rivers/Hopewell, VA 2,154,978 1,164,316 1972 01/06/82 35 yrs.
Village at Old Tampa Bay/Oldsmar, FL 13,026,075 438,122 1986 12/08/93 35 yrs.
Vinyards/Orlando, FL 13,424,670 70,290 1984/86 10/31/94 35 yrs.
Walnut Creek/Raleigh, NC 25,140,907 474,272 1985/86 05/17/94 35 yrs.
Waterford/Columbia, SC 7,927,003 130,766 1985 07/01/94 35 yrs.
West Knoll/Newark, DE 3,995,169 62,256 1964 07/01/94 35 yrs.
Windsor Harbor/Charlotte, NC 6,265,396 1,566,667 1971 01/13/89 35 yrs.
Woodland Hollow/Charlotte, NC 7,519,248 2,390,994 1974/76 11/03/86 35 yrs.
Woodscape/Newport News, VA 9,729,697 2,468,694 1974/76 12/29/87 35 yrs.
Woodside/Baltimore, MD 12,088,775 137,477 1966 08/16/94 35 yrs.
</TABLE>
<PAGE>
SCHEDULE III.
Summary of Real Estate Owned (continued)
<TABLE>
Cost of
Improvements
Capitalized Gross Amount at Which
Initial Cost to Trust Subsequent to Carried at Close of Period
Land and Buildings Acquisition Land and Buildings
Land and (Net of Land and
Encumbrances Improvements Improvements Disposals) Improvements Improvements
<S> <C> <C> <C> <C> <C> <C>
Apartments:
Shopping Centers:
Circle/Richmond, VA $ -- $ 885,964 $ 1,836,464 $ 1,487,795 $ 947,570 $ 3,262,653
Cumberland Square/Dunn, NC -- 661,636 832,148 769,014 718,915 1,543,883
Deerfield Plaza/Myrtle Beach, SC -- 883,767 2,182,509 601,928 1,240,702 2,427,502
Glen Lea/Richmond, VA 2,438,333 559,993 649,500 2,587,214 1,033,765 2,762,942
Gloucester Exchange/Gloucester, VA -- 403,688 2,278,553 688,906 502,031 2,869,116
Hanover Village/Richmond, VA -- 1,928,339 1,003,416 5,163,705 2,939,044 4,453,996
Kroger Sav-On/Waynesboro, VA -- 319,300 990,901 437,592 332,702 1,415,091
Laburnum Park/Richmond, VA 2,599,657 4,188,394 69,429 1,928,265 4,929,215
Laburnum Square/Richmond, VA 1,598,882 773,804 2,178,622 2,004,984 1,125,262 3,832,148
Meadowdale/Richmond, VA 886,030 1,099,620 3,875,145 1,097,943 1,286,137 4,786,571
Rose Manor/Smithfield, NC -- 496,000 1,038,694 (144,250) 542,229 848,215
The Village/Durham, NC -- 1,355,000 3,814,496 3,080,327 2,137,438 6,112,385
Village Square/Myrtle Beach, SC -- 3,070,000 6,429,614 1,709,102 3,727,678 7,481,038
Willow Oaks/Hampton, VA 3,540,000 934,220 1,211,045 6,905,563 3,106,434 5,944,394
Office and Industrial Buildings:
Franklin St./Richmond, VA -- 67,900 282,173 75,843 67,900 358,016
Meadowdale Offices/Richmond, VA -- 240,563 359,913 389,352 258,144 731,684
Statesman Park/Roanoke, VA -- 90,162 565,557 93,595 147,996 601,318
Tri-County Buildings/Bristol, TN -- 275,582 900,273 1,262,597 364,123 2,074,329
$158,448,560 $152,982,937 $ 722,823,865 $ 131,791,768 $174,536,140 $ 833,062,430
Depreciable
Life of
Total Accumulated Date of Date Building
(a) Depreciation Construction Acquired Component
<S> <C> <C> <C> <C> <C>
Shopping Centers:
Circle/Richmond, VA $ 4,210,223 $ 1,929,918 1956/62/67 11/01/73 25/35 yrs.
Cumberland Square/Dunn, NC 2,262,798 371,837 1972/78/84 08/28/86 35 yrs.
Deerfield Plaza/Myrtle Beach, SC 3,668,204 749,242 1979 01/17/84 35 yrs.
Glen Lea/Richmond, VA 3,796,707 1,209,340 1964/85 05/25/83 25 yrs.
Gloucester Exchange/Gloucester, VA 3,371,147 624,057 1974 11/12/87 35 yrs.
Hanover Village/Richmond, VA 7,393,040 1,300,866 1971/72 06/30/86 35 yrs.
Kroger Sav-On/Waynesboro, VA 1,747,793 638,030 1975 03/07/80 35 yrs.
Laburnum Park/Richmond, VA 6,857,480 590,431 1988/89 09/28/90 35 yrs.
Laburnum Square/Richmond, VA 4,957,410 1,669,898 1978/85 02/11/81 40 yrs.
Meadowdale/Richmond, VA 6,072,708 1,591,647 1976/82 12/31/84 35 yrs.
Rose Manor/Smithfield, NC 1,390,444 359,770 1972/75 08/28/86 35 yrs.
The Village/Durham, NC 8,249,823 1,869,102 1965 08/28/86 35 yrs.
Village Square/Myrtle Beach, SC 11,208,716 1,648,664 1978/79 05/25/88 35 yrs.
Willow Oaks/Hampton, VA 9,050,828 2,345,313 1968/74 08/01/84 35 yrs.
Office and Industrial Buildings:
Franklin St./Richmond, VA 425,916 115,906 1890 07/01/86 35 yrs.
Meadowdale Offices/Richmond, VA 989,828 259,255 1983 12/31/84 35 yrs.
Statesman Park/Roanoke, VA 749,314 389,699 1974 05/22/75 33 yrs.
Tri-County Buildings/Bristol, TN 2,438,452 646,409 1976/79 01/21/81 33 yrs.
$ 1,007,598,570 $120,340,630
</TABLE>
(a) The aggregate cost for federal income tax purposes was approximately $987
million at December 31, 1994 and $563 million at December 31, 1993.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
United Dominion Realty Trust, Inc.
(registrant)
By /s/ James Dolphin
James Dolphin
Senior Vice President, and Chief Financial Officer
March 30, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 30, 1995 by the following persons on
behalf of the registrant and in the capacities indicated.
/s/ John P. McCann /s/ R. Toms Dalton, Jr.
John P. McCann R. Toms Dalton, Jr.
Director, President and Chief Director
Executive Officer
/s/ James Dolphin /s/ Jeff C. Bane
James Dolphin Jeff C. Bane
Director, Senior Vice President, Director
Secretary and Chief Financial
Officer
/s/ Jerry A. Davis /s/ John C. Lanford
Jerry A. Davis John C. Lanford
Vice President, Controller-Corporate Accounting Director
and Chief Accounting Officer
/s/ C. Harmon Williams, Jr. /s/ H. Franklin Minor
C. Harmon Williams, Jr. H. Franklin Minor
Chairman of the Board of Directors Director
/s/ Barry M. Kornblau /s/ Robert P. Buford
Barry M. Kornblau Robert P. Buford
Director, Senior Vice President and Director
Director of Apartments
Exhibit 13
SELECTED FINANCIAL INFORMATION
<TABLE>
Years Ended December 31, 1994 1993 1992 1991 1990
In thousands, except per share data
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Rental income $ 139,972 $ 89,084 $ 63,202 $ 51,250 $ 44,042
Income from property operations 52,274 31,461 20,967 17,449 15,609
Income before gains (losses) on
investments and extraordinary item 19,118 11,286 8,141 3,578 4,556
Gains (losses) on investments 108 (89) (1,564)(b) 26 417
Extraordinary item - early extinguishment of debt (89) - (242) (35) (103)
Net income 19,137 11,197 6,335(b) 3,569 4,870
Distributions declared 37,539 27,988 23,271 15,872 14,402
Weighted average number of shares outstanding(a) 46,182 38,202 34,604 24,642 23,238
Per share:(a)
Net income $ .41 $ .29 $ .18(b) $ .14 $ .21
Distributions declared .78 .70 .66 .63 .62
BALANCE SHEET DATA
Real estate owned $1,007,599 $582,213 $ 454,115 $ 361,503 $ 294,205
Accumulated depreciation 120,341 91,444 71,806 56,074 43,229
Total assets 911,913 505,840 390,365 314,473 259,532
Mortgage notes payable 158,449 72,862 76,516 73,373 69,734
Notes payable 368,215 156,558 104,605 94,973 47,969
Shareholders' equity 356,968 259,963 197,677 136,152 118,154
Number of shares outstanding(a) 50,356 41,653 35,285 27,133 23,177
OTHER DATA
Funds from operations(c) $ 49,212 $ 31,658 $ 24,185 $ 17,158 $ 15,231
</TABLE>
(a) All share and per share information has been adjusted to give retroactive
effect to a 2-for-1 stock split in May, 1993.
(b) Reflects a provision for possible investment losses of $1,564 ($.04 per
share).
(c) Funds from operations is defined as income before gains (losses) on
investments and extraordinary items adjusted for certain non-cash items,
primarily real estate depreciation. The trust considers funds from
operations in evaluating property acquisitions and its operating
performance, and believes that funds from operations should be considered
along with, but not as an alternative to, net income and cash flows as a
measure of the trust's operating performance and liquidity. Funds from
operations does not represent cash generated from operating activities in
accordance with the generally accepted accounting principals and is not
necessarily indicative of cash available to fund cash needs.
MANAGEMENT'S DISCUSSION OF
FINANCIAL CONDITION AND OPERATIONS
RESULTS OF OPERATIONS
FUNDS FROM OPERATIONS is defined as income before gains (losses) on investments
and extraordinary items adjusted for certain non-cash items, primarily real
estate depreciation. The Trust considers funds from operations in evaluating
property acquisitions and its operating performance, and believes that funds
from operations should be considered along with, but not as an alternative to,
net income and cash flows as a measure of the Trust's operating performance and
liquidity. Funds from operations does not represent cash generated from
operating activities in accordance with generally accepted accounting principles
and is not necessarily indicative of cash available to fund cash needs.
Beginning in 1995, the Trust will implement the new definition of funds from
operations recently adopted by NAREIT (The National Association of Real Estate
Investment Trusts). If this definition had been available for adoption in 1994,
the Trust's reported funds from operations would have been approximately $1.0
million lower than under the definition currently used by the Trust.
YEAR ENDED DECEMBER 31, 1994
For 1994, the Trust reported significant increases over 1993 in rental income,
income from property operations, income before gains (losses) on investments and
extraordinary item, net income and funds from operations. Since the beginning of
1993, the Trust acquired 15,450 apartment units (63 apartment communities)
representing a 112% expansion in the number of apartment units owned during that
period. These additional apartment units provided a substantial portion of the
reported increases noted above. However, the improved performance of the Trust's
mature group of 13,832 apartment units (57 apartment communities) acquired prior
to 1993 also contributed to the increases, particularly when considered on a per
share basis.
For 1994, the Trust's mature apartment properties provided approximately 53%
of the Trust's rental income and 51% of its net operating income (rental income
less rental expenses). Total rental income from these units grew 6.2% in 1994
reflecting an increase in economic occupancy to 94.3% compared to 91.6% for 1993
and growth in average rents and other income of 3.3%. The improvement in
occupancy reflected stronger apartment markets throughout the Trust's region.
Rental expenses at these properties increased 2.3% resulting in a decrease in
the operating expense ratio (the ratio of rental expenses to rental income) of
1.7% to 44.0%. The increase in rental expenses was moderated by lower
advertising, rental promotions, electricity, and interior painting and cleaning
expenses caused by the combination of stronger occupancy and lower tenant
turnover. Turnover (measured by move-outs) was 57% for 1994. The combination of
increased occupancy, higher rents and only a moderate operating expense increase
led to an increase in net operating income from these mature apartment units of
approximately $3.6 million or 9.5%. For the 15,450 apartments in the 63
apartment communities acquired by the Trust since the beginning of 1993, average
occupancy was 92.8% and the operating expense ratio was 43.1% during 1994. For
the 29,282 apartments in the 120 communities owned on December 31, 1994,
occupancy averaged 93.7% and the operating expense ratio was 43.6% for the full
year 1994. For 1993, the 17,914 units then owned had occupancy of 91.5% and an
expense ratio of 45.5% for that year. For 1994, net operating income from
commercial properties increased $221,000 or 3% over 1993.
For 1994, depreciation expense increased $9.3 million with substantially all
of the increase attributable to the portfolio expansion that has occurred over
the past 24 months. Interest expense increased approximately $11.4 million in
1994 over 1993. The Trust used both debt and equity to finance its growth over
the past two years; however, the Trust used more debt relative to equity in 1994
than it did in 1993. The increase in interest expense of approximately $.17 per
share also reflects the rising interest rate environment of 1994 when rates were
generally higher than in 1993.
YEAR ENDED DECEMBER 31, 1993
For 1993, the Trust reported significant increases over 1992 in rental income,
income from property operations, income before gains (losses) on investments and
extraordinary item, net income, and funds from operations. These increases were
attributable primarily to the significant portfolio expansion that occurred
during 1993 and 1992. The performance of the Trust's then mature group of 10,924
apartment units (46 apartment communities) contributed to the increases.
For the year, the Trust's mature apartment properties provided 60% of the
Trust's rental income. These units had average economic occupancy of 91.2%
during 1993 compared to 90.6% for 1992, an increase of 0.6%. Average rents and
other income at these properties grew 2.9% and rental expenses increased 5.3%
resulting in an increase in the operating expense ratio of 0.8% to 47.9%. Net
operating income from these apartment units was up approximately $500,000 or
1.8%. For the 6,990 non-mature apartment units acquired by the Trust in 1993 and
1992, occupancy averaged 92.1% and the operating expense ratio was 43.3% during
1993. For the 17,914 apartments in the 74 communities owned on December 31,
1993, occupancy averaged 91.5% and the expense ratio was 45.5% for the full
year. In 1992, the 13,832 units then owned had occupancy of 90.7% and an expense
ratio of 46.5%. For 1993, net operating income from commercial properties
increased $288,000 or 4.0%, primarily reflecting additional small tenant leases.
For 1993, depreciation expense increased $4.0 million with substantially all
of the increase attributable to the portfolio expansion that has occurred during
the past year.
For 1993, interest income was $708,000 compared to $1.4 million in 1992.
During each year, the Trust completed a public offering of Common Stock and
invested the proceeds temporarily in short-term money market investments. During
1992, the Trust had such temporary investments throughout much of the year at
higher rates than in 1993 when the average amount invested in the money markets
was significantly lower. Consequently, interest income declined.
Interest expense increased approximately $5.2 million in 1993 over 1992
reflecting the fact that the Trust used less equity relative to debt to finance
its 1993 acquisitions than it did in 1992. While interest expense increased
$.105 per share in 1993, as a percent of rental income it was virtually
unchanged.
LIQUIDITY AND CAPITAL RESOURCES
As a qualified REIT, the Trust distributes a substantial portion of its cash
flow to its shareholders in the form of dividends. Over the past few years, the
Trust has sought to reduce its payout ratio (the ratio of distributions declared
per share to funds from operations) from above 90% to approximately 75%. For
1994, the dividend payout ratio was 73% compared to 84% for 1993 and 94% for
1992. The Trust presently intends to maintain a dividend payout ratio in the
75%-80% range and to retain sufficient cash to cover its normal operating needs,
including routine replacements. For 1994, the Trust's cash flow from operating
activities exceeded cash distributions paid to shareholders by approximately
$19.5 million. The Trust utilizes a variety of primarily external financing
sources to fund portfolio growth, major capital improvement programs and balloon
debt payments. The Trust has frequently utilized its bank lines of credit to
temporarily finance these expenditures and has subsequently replaced this short-
term bank debt with longer term debt or equity.
The Trust has, from time to time, used derivative instruments to
synthetically alter on-balance sheet liabilities or to hedge anticipated
financing transactions. No such derivative contracts were outstanding at
December 31, 1994. Derivative contracts did not have a material impact on
results of operations during the three years then ended.
For 1994, the Trust's cash flow from operating activities increased
substantially as a result of the significant expansion of the Trust's portfolio
as discussed below and under "Results of Operations".
At the beginning of 1994, the Trust had approximately $5.8 million of cash
and cash equivalents and $32.4 million of available and unused bank lines of
credit. During the year, the Trust added one bank to its lending group and
expanded its total bank lines of credit to $103.5 million. On April 7, 1994, the
Trust completed a $75 million public offering of 7 1/4% Senior Notes due April
1, 1999. The Notes were priced at 99.833% to yield 7.29% to maturity. The
proceeds of the offering aggregated $74.3 million. Near the end of June, 1994
the Trust completed a public offering of 8,479,400 shares of its common stock at
$14.25 per share. Net proceeds of the offering, after deducting underwriting
commissions and direct offering costs, were approximately $114 million. In
September 1994, the Trust registered $400 million of various debt and equity
securities with the Securities and Exchange Commission. Using this shelf
registration, on September 27, 1994, the Trust completed a $150 million public
offering of 8 1/2% Debentures due September 15, 2024. The debentures include an
investor "put" feature which grants each debentureholder a one-time option to
redeem debentures at the end of 10 years. The debentures were priced at 99.689%
to yield 8.55% to maturity. In anticipation of this transaction, the Trust
entered into two interest rate hedge transactions involving futures contracts in
an effort to lock-in the interest rate applicable to the debentures. These
interest rate protection agreements were terminated at the time the debentures
were issued and had the economic effect of reducing the interest rate to 8.22%
for the initial 10 years of the term. Net proceeds of the debenture sale
approximated $148.4 million. Also during 1994, the Trust completed new
tax-exempt multifamily housing bond financings or assumed such bond financings
in connection with certain acquisitions in the aggregate amount of approximately
$71 million ($12 million of which was defeased pending refunding).
During 1994, the Trust acquired a total of 47 apartment properties including
26 properties, one of which was subsequently sold, that were acquired in a
portfolio purchase from entities affiliated with Clover Financial Corporation,
for approximately $171 million. Also during the year the Trust acquired 21
additional apartment properties containing 6,115 units for approximately $238
million which includes approximately $56 million of mortgage or tax-exempt bond
financings encumbering the properties acquired.
During 1994, the Trust also made approximately $18.9 million of capital
improvements to its property portfolio. This amount includes approximately $7.2
million of improvements at the Trust's 13,832 mature apartment units that had
been owned since the beginning of 1993. Excluding six properties that were
acquired in the latter part of 1992 and which still were undergoing
rehabilitation in 1994, the remaining 12,069 mature units averaged $299 per unit
in capital expenditures. This amount includes the following: carpet and tile
replacements ($107/unit), appliances ($38/unit), HVAC equipment ($22/unit),
various interior improvements, including washer/dryer connections, ($39/unit),
various exterior improvements, including new roofs, ($35/unit), new site
lighting ($22/unit) and various other improvements ($36/unit).
The Trust expects to acquire 7,000 or more apartment units during 1995 at an
average cost of $30,000 to $40,000 per unit. While the Trust used more debt than
equity to fund its acquisition program during 1994, it anticipates that it will
use more equity than debt to fund its 1995 acquisitions. During the first half
of 1995 the Trust anticipates raising a modest amount of additional equity,
possibly $40 million. The Trust is actively negotiating the sale of four
shopping centers (Glen Lea, Hanover Village, Laburnum Park and Laburnum Square)
in a single transaction and, for financial reporting purposes, expects to
recognize an aggregate gain on the sales of approximately $3 million. For income
tax purposes, the sales are expected to be structured as tax deferred exchanges.
There is no assurance that these sales transactions will be consummated. The
Trust also intends to sell certain other properties during 1995. Proceeds from
any property sales are expected to be reinvested into additional apartment
properties. Assuming continued acquisition activity, the Trust anticipates
raising additional equity capital later in the year.
The Trust's liquidity and capital resources are believed to be more than
adequate to meet its cash requirements for the foreseeable future.
INFLATION
Management believes that the direct effects of inflation on the Trust's
operations have been inconsequential.
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
The Board of Directors and Shareholders
United Dominion Realty Trust, Inc.
We have audited the accompanying consolidated balance sheets of United Dominion
Realty Trust, Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of United
Dominion Realty Trust, Inc. and subsidiaries at December 31, 1994 and 1993, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Richmond, Virginia
January 25, 1995,
except for Note 11, as to which the date is March 6, 1995
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1994 and 1993 1994 1993
IN THOUSANDS, EXCEPT SHARE DATA
<S> <C> <C>
Assets
Real estate owned (Notes 1, 2 and 3):
Apartments $ 928,758 $ 503,226
Shopping centers 74,237 74,404
Office and industrial buildings 4,604 4,583
1,007,599 582,213
Less accumulated depreciation 120,341 91,444
887,258 490,769
Cash and cash equivalents 7,261 5,773
Other assets 17,394 9,298
$ 911,913 $ 505,840
Liabilities and Shareholders' Equity
Mortgage notes payable (Notes 2, 4 and 6) $ 158,449 $ 72,862
Notes payable (Notes 5 and 6) 368,215 156,558
Accounts payable, accrued expenses and other liabilities 12,731 6,070
Tenants' deposits and rents paid in advance 5,728 3,099
Distributions payable to shareholders 9,822 7,288
554,945 245,877
Shareholders' equity (Notes 8, 9 and 11):
Preferred stock, 25,000,000 shares authorized, no
shares outstanding - -
Common stock, $1 par value; 100,000,000 shares
authorized 50,355,640 shares issued and outstanding
(41,653,097 in 1993) 50,356 41,653
Additional paid-in capital 410,797 302,486
Notes receivable from officer shareholders (5,991) (4,384)
Distributions in excess of net income (98,194) (79,792)
Total shareholders' equity 356,968 259,963
$ 911,913 $ 505,840
</TABLE>
See accompanying notes.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years ended December 31, 1994, 1993 and 1992 1994 1993 1992
IN THOUSANDS, EXCEPT PER SHARE DATA
<S> <C> <C> <C>
INCOME
Property operations:
Rental income $139,972 $ 89,084 $ 63,202
Property expenses:
Utilities 11,206 7,838 5,367
Repairs and maintenance 21,216 13,950 9,635
Real estate taxes 9,658 5,777 4,147
Property management 4,645 2,782 2,064
Other operating expenses 11,924 7,512 5,290
Depreciation of real estate owned 29,049 19,764 15,732
87,698 57,623 42,235
Income from property operations 52,274 31,461 20,967
Interest and other income 756 708 1,402
53,030 32,169 22,369
EXPENSES
Interest 28,303 16,938 11,697
General and administrative 5,021 3,349 2,231
Other depreciation and amortization 588 596 300
33,912 20,883 14,228
Income before gains (losses) on investments and
extraordinary item 19,118 11,286 8,141
Gains (losses) on sale of investments 108 (89) -
Provision for possible investment losses (Note 2) - - (1,564)
Income before extraordinary item 19,226 11,197 6,577
Extraordinary item-early extinguishment of debt (89) - (242)
Net income $ 19,137 $ 11,197 $ 6,335
Net income per share:
Before extraordinary item $ .41 $ .29 $ .19
Extraordinary item - - (.01)
$ .41 $ .29 $ .18
Weighted average number of shares outstanding 46,182 38,202 34,604
</TABLE>
See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31, 1994, 1993 and 1992 1994 1993 1992
IN THOUSANDS
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income $ 19,137 $ 11,197 $ 6,335
Adjustments to reconcile net income to net cash
provided by operating activities:
(Gains) losses on sales of investments (108) 89 -
Provision for possible investment losses - - 1,564
Extraordinary item 89 - 242
Depreciation and amortization 29,644 20,372 16,044
Adoption of SFAS No. 112 "Employers'
Accounting for Postemployment
Benefits" (Note 1) 450 - -
Changes in operating assets and
liabilities:
Increase in operating liabilities 6,680 2,724 135
(Increase) decrease in operating
assets (1,348) (443) 288
Net cash provided by operating activities 54,544 33,939 24,608
INVESTING ACTIVITIES
Acquisitions of real estate, net of debt and
liabilities assumed (346,730) (117,197) (68,197)
Capital expenditures (19,154) (11,060) (13,161)
Purchase of mortgage note receivable, net of
repayments 63 (1,907) -
Net proceeds from sales of properties 2,706 69 -
Proceeds from gain on interest rate hedge
transactions 3,484 - -
Other - 31 (15)
Net cash used in investing activities (359,631) (130,064) (81,373)
FINANCING ACTIVITIES
Net proceeds from issuance of mortgages and notes
payable 262,006 65,800 31,208
Net proceeds from issuance of shares 115,407 79,077 78,461
Net short-term bank borrowings (repayments) (14,500) 150 (10,400)
Mortgage financing proceeds released from
construction funds 24,866 - 1,394
Payments on notes and non-scheduled mortgage
principal payments (44,744) (16,905) (21,292)
Cash distributions paid to shareholders (35,005) (26,523) (21,791)
Scheduled mortgage principal payments (1,455) (806) (767)
Other - - (36)
Net cash provided by financing activities 306,575 100,793 56,777
Net increase in cash and cash equivalents 1,488 4,668 12
Cash and cash equivalents, beginning of year 5,773 1,105 1,093
Cash and cash equivalents, end of year $ 7,261 $ 5,773 $ 1,105
</TABLE>
See accompanying notes.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Notes
Common Stock, $1 Par Value Additional Receivable Distributions Total
Number Paid-In from Officer In Excess of Shareholders'
Years ended December 31, 1994, of Shares Amount Capital Shareholders Net Income Equity
1993, and 1992
IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1991 27,132,708 $27,133 $157,366 $ (2,282) $ (46,065) $136,152
Shares issued in public offering 8,050,000 8,050 69,755 - - 77,805
Exercise of share options 58,600 59 395 - - 454
Shares purchased by officers,
net of repayments 25,000 25 235 (260) - -
Shares issued through
dividend reinvestment plan 18,410 18 184 - - 202
Net income for the year - - - - 6,335 6,335
Distributions declared
($.66 per share) - - - - (23,271) (23,271)
Balance at December 31, 1992 35,284,718 35,285 227,935 (2,542) (63,001) 197,677
Shares issued in public offering 6,095,000 6,095 71,573 - - 77,668
Exercise of share options 98,900 99 741 - - 840
Shares purchased by officers,
net of repayments 135,500 135 1,712 (1,842) - 5
Shares issued through dividend
reinvestment plan 38,979 39 525 - - 564
Net income for the year - - - - 11,197 11,197
Distributions declared
($.70 per share) - - - - (27,988) (27,988)
Balance at December 31, 1993 41,653,097 41,653 302,486 (4,384) (79,792) 259,963
Shares issued in public offering 8,479,400 8,479 105,731 - - 114,210
Exercise of share options 50,488 51 456 - - 507
Shares purchased by officers,
net of repayments 137,500 138 1,652 (1,607) - 183
Shares issued through
dividend reinvestment plan 35,155 35 472 - - 507
Net income for the year - - - - 19,137 19,137
Distributions declared
($.78 per share) - - - - (37,539) (37,539)
Balance at December 31, 1994 50,355,640 $50,356 $410,797 $ (5,991) $ (98,194) $356,968
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS United Dominion Realty Trust, Inc. (the "Trust"), a Virginia
corporation, is an equity investor in income producing real estate, primarily
multifamily properties in the mid-Atlantic and southeastern U.S.
BASIS OF PRESENTATION The accompanying consolidated financial statements
include the accounts of the Trust and its wholly owned subsidiaries. All
significant inter-company accounts and transactions have been eliminated in
consolidation.
FEDERAL INCOME TAXES The Trust is operated as and annually elects to be
taxed as a real estate investment trust under the Internal Revenue Code of 1986,
as amended (the "Code"). Generally, a real estate investment trust which
complies with the provisions of the Code and distributes at least 95% of its
taxable income to its shareholders does not pay federal income taxes on its
distributed income. Accordingly, no provision has been made for federal income
taxes.
CASH AND CASH EQUIVALENTS All highly liquid investments with maturities,
when purchased, of three months or less are considered to be cash equivalents.
REAL ESTATE Real estate investments are carried at the lower of cost or
estimated net realizable value.
Repairs and maintenance costs are expensed as incurred while significant
improvements, renovations, and replacements are capitalized. Certain costs,
principally payroll, directly related to real estate acquisitions and
redevelopment, are capitalized. Depreciation is computed on a straight-line
basis over the estimated useful lives of the related assets which range from 25
to 40 years for properties, 10 to 35 years for major improvements, and 3 to 15
years for fixtures, equipment and other assets.
INTEREST Interest is capitalized on accumulated expenditures relating to the
acquisition and development of certain qualifying properties. During 1994, 1993
and 1992, total interest paid was $22,944,000, $14,649,000, and $11,530,000,
respectively, which includes $73,000, that was capitalized in 1992. No interest
was capitalized in 1994 or 1993.
Deferred financing costs typically are amortized over a period not to exceed
that of the term of the related debt. Amortization of deferred financing costs
included in the consolidated statements of operations were $1,180,000, $707,000,
and $279,000 for 1994, 1993 and 1992, respectively.
INTEREST RATE SWAP AGREEMENTS The Trust may from time to time enter into
interest rate swap agreements to modify the interest characteristics of its
outstanding debt from a floating rate to a fixed rate basis or visa versa. These
agreements generally involve the exchange of fixed and variable rate interest
payment obligations without the exchange of underlying principal amounts. Net
amounts paid or received under these agreements are reflected as adjustments to
interest expense. The Trust did not terminate or enter into any new interest
rate swap agreements in 1994.
INTEREST RATE PROTECTION AGREEMENTS The Trust may from time to time enter
into interest rate futures contracts to hedge anticipated debt transactions.
Gains and losses, if any, on these transactions are deferred and amortized over
the terms of the related debt as an adjustment to interest expense.
INCOME PER SHARE Primary net income per share is calculated using the
weighted average number of shares outstanding during each year. Options
outstanding are not included since their inclusion would not be materially
dilutive.
POSTEMPLOYMENT BENEFITS Effective January 1, 1994, the Trust adopted the
provisions of SFAS No. 112, "Employers' Accounting for Postemployment Benefits".
This statement requires the accrual of the estimated cost of benefits provided
by an employer to its former or inactive employees after employment, but before
retirement. Adoption of SFAS No. 112 increased 1994 general and administrative
expense by $450,000 or $.01 per share.
RECLASSIFICATIONS Certain previously reported amounts have been reclassified
to conform with the current financial statement presentation.
2. REAL ESTATE OWNED
The following is a summary of real estate owned at December 31, 1994:
<TABLE>
<CAPTION>
Initial
Number of Acquisition Accumulated
DOLLARS IN THOUSANDS Properties Cost Cost Depreciation Encumbrances
<S> <C> <C> <C> <C> <C>
Apartments
North Carolina 30 $ 192,397 $ 225,596 $ 35,208 $ 28,006
Florida 21 200,640 209,002 4,737 28,770
Virginia 25 127,593 158,434 40,996 27,312
South Carolina 20 121,088 136,444 8,920 22,272
Georgia 7 53,896 64,982 8,284 6,471
Maryland 7 62,931 64,333 2,213 31,185
Tennessee 6 42,413 44,691 1,292 5,970
Alabama 2 12,742 12,849 208 -
Delaware 2 12,325 12,427 173 -
Shopping Centers
Virginia 9 26,938 47,457 11,900 8,463
South Carolina 2 12,565 14,877 2,398 -
North Carolina 3 8,198 11,903 2,601 -
Office and Industrial Buildings
Tennessee 1 1,176 2,438 646 -
Virginia 3 1,607 2,166 765 -
138 $ 876,509 $ 1,007,599 $ 120,341 $ 158,449
The following is a reconciliation of the carrying amount of real estate owned:
IN THOUSANDS 1994 1993 1992
Balance at January 1 $ 582,213 $ 454,115 $ 361,503
Real estate purchased* 409,280 118,265 81,788
Improvements 18,857 10,380 12,388
Real estate sold (2,751) (547) -
Provision for possible investment loses - - (1,564)
Balance at December 31 $1,007,599 $ 582,213 $ 454,115
*IN CONNECTION WITH THE PURCHASE OF CERTAIN PROPERTIES IN 1994 AND 1992, THE TRUST ASSUMED
APPROXIMATELY $60.3 AND $13.8 MILLION, RESPECTIVELY, OF MORTGAGE DEBT ENCUMBERING THE PROPERTIES ACQUIRED.
The following is a reconciliation of accumulated depreciation:
IN THOUSANDS 1994 1993 1992
Balance at January 1 $ 91,444 $ 71,806 $ 56,074
Depreciation expense for the year 29,049 19,764 15,732
Real estate sold (152) (126) -
Balance at December 31 $ 120,341 $ 91,444 $ 71,806
The Trust's properties are leased to others under operating leases. Certain
shopping center leases provide that tenants share certain operating costs such
as real estate taxes, insurance, and maintenance by reimbursement to the Trust.
Such reimbursements amounted to $1,070,000 in 1994, $936,000 in 1993 and
$895,000 in 1992. The Trust has no material net lease arrangements.
Minimum annual fixed rentals to be received, principally from commercial
property tenants, under all noncancelable leases with terms greater than one
year subsequent to December 31, 1994 were as follows (in thousands): 1995
$7,295, 1996 - $6,196, 1997 - $4,944, 1998 - $3,946, 1999 $2,804, thereafter -
$15,120.
During 1992, the Trust established an allowance for possible investment
losses in the amount of $1,564,000 based upon management's estimate of net
realizable value as compared to the carrying value of each real estate
investment.
The aggregate cost of real estate owned for federal income tax purposes was
approximately $987 million at December 31, 1994 and $563 million at December 31,
1993.
3. ACQUISITIONS
During 1994, the Trust acquired 47 apartment communities containing 11,433 units
at a total cost of $409.3 million. During 1993, the Trust acquired 17 apartment
communities containing 4,082 units at a total cost of $118.3 million. The Trust
assumed $60.3 million in mortgage notes payable and bond indebtedness in
connection with the 1994 acquisitions.
Unaudited pro forma results of operations for the years ended December 31,
1994 and 1993 are set forth below. For 1994, such pro forma results assume the
acquisition of 41 apartment communities containing 9,749 units at a total cost
of $350.3 million at the beginning of the year. For 1993, such pro forma results
assume (i) the 1993 acquisition of 11 apartment communities containing 2,811
units at a total cost of $81.9 million, and (ii) the 1994 acquisition of 41
apartment communities containing 9,749 units at a total cost of $350.3 million
at the beginning of 1993.
Pro Forma Pro Forma
IN THOUSANDS, EXCEPT Year Ended Year Ended
PER SHARE AMOUNTS Dec. 31, 1994 Dec. 31, 1993
Rental income $167,100 $154,173
Net income 21,143 18,146
Net income per share $ .42 $ .39
The unaudited information is not necessarily indicative of what the Trust's
results of operations would have been if the acquisitions had occurred at the
beginning of each period presented. Additionally, the pro forma information does
not purport to be indicative of the Trust's results of operations for future
periods.
4. MORTGAGE NOTES PAYABLE
CONVENTIONAL MORTGAGE NOTES PAYABLE Conventional mortgage notes payable
included 22 loans encumbering 17 properties at December 31, 1994, and 18 loans
encumbering 12 properties at December 31, 1993. Mortgage notes payable are
generally due in monthly installments of principal and interest and mature at
various dates through 2022. Mortgage notes payable aggregating $53.2 million and
$25.8 million at December 31, 1994 and 1993 had fixed rates of interest ranging
from approximately 7.00% to 12.50% (weighted average interest rate of 8.45% at
December 31, 1994). While each note is secured by the particular property
mortgaged, certain notes extend liability to the Trust if the security is not
sufficient to satisfy the mortgage note payable.
BOND INDEBTEDNESS At December 31, 1994, 17 of the Trust's properties were
encumbered by mortgage notes payable which secure related tax exempt housing
bond issues. Interest on these notes is generally payable in semi-annual
installments and the notes mature at various dates through 2024. Bond
indebtedness aggregating $93.1 million at December 31, 1994 had fixed rates of
interest ranging from 5.91% to 10.235% (weighted average interest rate of 7.15%
at December 31, 1994). At December 31, 1994, the Trust had variable rate bond
indebtedness aggregating $12.1 million (weighted average interest rate of 5.57%
at December 31, 1994).
The aggregate maturities of mortgage notes payable (conventional and bond
related) for the five years subsequent to December 31, 1994 were as follows (in
thousands):
1995 $ 9,285
1996 2,124
1997 14,178
1998 6,854
1999 6,862
Thereafter 119,146
$ 158,449
These payments include special principal curtailments and balloon
payments of $7.2 million in 1995, $12.2 million in 1997, $4.8 million in 1998
and $5.0 million in 1999.
5. NOTES PAYABLE
A summary of notes payable at December 31, 1994 and 1993 is as follows:
</TABLE>
<TABLE>
<CAPTION>
DOLLARS IN THOUSANDS 1994 1993
<S> <C> <C>
COMMERCIAL BANKS
Borrowings outstanding under revolving credit
facilities $ 14,150 $ 28,650
Variable rate note due March, 1995(a) 10,000 -
Variable rate note due November, 1994 - 10,000
INSURANCE COMPANIES-SENIOR UNSECURED NOTES
7.98% due March, 1997-2003(b) 52,000 52,000
9.57% due July, 1996 35,000 35,000
7.89% due March, 1996 10,000 10,000
7.57% due March, 1995 10,000 10,000
8.72% due November, 1995-1998(c) 8,000 10,000
SENIOR UNSECURED NOTES-OTHER
7.25% notes due April, 1999 75,000 -
8.50% debentures due September, 2024(d) 150,000 -
OTHER 4,065(e) 908
$ 368,215 $ 156,558
(a) The note bears interest at one month libor plus 62 1/2 basis points.
(b) Payable in seven equal principal installments of $7.4 million.
(c) Payable in four equal annual principal installments of $2 million.
(d) Debentures include an investor put feature which grants the debentureholder
a one time option to redeem debentures at the end of 10 years.
(e) Includes $3.5 million deferred gain from interest rate hedge transaction
discussed in note 6.
Certain of the loan agreements contain covenants which require the Trust,
among other things, to maintain minimum tangible net worth, as defined, and
maintain certain financial ratios.
At December 31, 1994, the Trust had $70 million of revolving credit
facilities with four commercial banks. These credit agreements currently expire
in June, 1995 and 1996, but are renewable annually by mutual agreement between
the Trust and each bank. Borrowings bear interest from LIBOR + 5/8% to the
respective bank's prime rate, depending on the level of the Trust's debt as
defined. At December 31, 1994, there were outstanding borrowings of $14.15
million under these credit facilities.
At December 31, 1994, the Trust had lines of credit with three commercial
banks for a total of $33.5 million. At December 1994, there were no borrowings
outstanding under these lines of credit. Each line is subject to periodic bank
review and requires the Trust to maintain a depository relationship with the
respective bank. Borrowings bear interest at or below the respective bank's
prime rate.
Information concerning short-term bank borrowings is summarized in the table
that follows:
IN THOUSANDS 1994 1993 1992
Total revolving credit facilities
and lines of credit at
December 31 $103,500 $ 61,000 $ 51,000
Borrowings outstanding at
December 31 14,150 28,650 28,500
Weighted average daily
borrowings during the year 33,787 11,313 4,059
Maximum daily borrowings
during the year 79,300 43,200 38,900
Weighted average daily interest
rate during the year 5.1% 4.0% 5.4%
Weighted average daily interest
rate at December 31 6.5% 3.8% 4.3%
6. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS The following disclosures of estimated
fair value of financial instruments were determined by the Trust using available
market information and appropriate valuation methodologies. Considerable
judgment is necessary to interpret market data and develop estimated fair value.
Accordingly, the estimates presented herein are not necessarily indicative of
the amounts that the Trust could realize upon disposition of the financial
instruments. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.
The carrying amounts and estimated fair value of the Trust's financial
instruments at December 31, 1994 were as follows:
IN THOUSANDS Carrying Amount Fair Value
Cash and cash equivalents $ 7,261 $ 7,261
Conventional mortgage 53,205 50,870
notes payable
Bond indebtedness 105,265 98,583
Notes payable 368,215 351,243
The following methods and assumptions were used by the Trust in estimating
the fair values set forth above.
CONVENTIONAL MORTGAGE NOTES PAYABLE Estimated fair value is based on
mortgage rates believed to be available to the Trust for issuance of debt with
similar terms and remaining maturities as of December 31, 1994.
BOND INDEBTEDNESS Fair value is estimated using discounted cash flow
analysis, based upon the incremental borrowing rate for similar types of bond
indebtedness.
NOTES PAYABLE The carrying amounts of the Trust's borrowings under short-
term revolving credits agreements and lines of credit approximate the fair
value. The fair value of the Trust's fixed rate term debt are estimated using
discounted cash flow analysis, based on the Trust's estimated incremental
borrowing rate at December 31, 1994 for similar types of borrowing arrangements.
Disclosure about the fair value of financial instruments are based upon
relevant information available to the Trust at December 31, 1994. Although
management is not aware of any factors that would have a material effect on the
fair value amounts reported herein, such amounts have not been revalued since
that date and current estimates of fair value may significantly differ from the
amounts presented.
INTEREST RATE SWAP AGREEMENTS Interest rate swap contracts with a notional
amount of $10,000,000 and $20,000,000 matured during 1994 and 1993,
respectively. At December 31, 1994, there were no interest rate swap agreements
outstanding. For all periods presented, the Trust had no deferred gains or
losses relating to terminated swap contracts. Interest rate swap contracts did
not have a material impact on interest expense or consolidated results of
operations during the periods presented.
INTEREST RATE PROTECTION AGREEMENTS During the third quarter of 1994, the
Trust entered into two interest rate hedge transactions involving futures
contracts with a total principal amount of $150 million to hedge against
possible interest rate fluctuations during the period prior to the issuance of
the $150 million Debentures. These two transactions effectively reduced the
interest rate on the Debentures from 8.50% to 8.22% for ten years. These
contracts were terminated upon issuance of the Debentures. Gains from these
contracts of $3.5 million are deferred as an adjustment to the carrying amount
of the debentures and will be amortized on a straight line basis as a reduction
of interest expense over a ten year period.
There were no interest rate protection contracts outstanding at December 31,
1994.
7. Income Taxes
The differences between net income for financial reporting purposes and
taxable income before dividend deductions relate primarily to timing
differences, depreciation adjustments resulting from book-tax basis differences
of certain properties and the deferral for tax purposes of certain gains on
property sales. The Trust has approximately $628,000 of net operating loss
carryforwards, expiring through 1998, available to offset future REIT taxable
income, if any.
All realized gains (losses) on sales of investments are distributed to
shareholders if and when recognized for income tax purposes. Since 1980, gains
aggregating approximately $7.7 million have been deferred for income tax
purposes and are undistributed at December 31, 1994.
For income tax purposes, distributions paid to shareholders consist of
ordinary income, capital gains, return of capital or a combination thereof. For
the three years ended December 31, 1994, distributions paid per share were
taxable as follows:
1994 1993 1992
Ordinary income $ .629 $ .493 $ .418
Capital gains .004 - -
Return of capital .127 .197 .237
$ .760 $ .690 $ .655
8. Share Options
Under the 1985 Share Option Plan, as amended, a maximum of 2,400,000
options could be granted, at the discretion of the Board, to certain officers,
directors and key employees of the Trust, through 1997.
On December 13, 1994, the Board granted 283,476 incentive stock options
(ISO's) to officers and key employees of the Trust and 87,524 non-qualified
options (NQO's) to certain officers and Directors of the Trust at $13.13 per
share. Certain options are subject to a vesting schedule whereby 175,976 ISO's
and 69,524 NQO's will not vest until December 31, 1995. Of the options
outstanding at December 31, 1994, 511,372 options were not then exercisable
under the provisions of the Plan.
The Plan generally provides, among other things, that options be granted at
exercise prices not lower than the market value of the shares on the date of
grant. Generally, the optionee has up to five years from the date on which the
options first become exercisable during which to exercise the options. Activity
in the Trust's share option plan during the three years ended December 31, 1994
is summarized in the following table.
</TABLE>
<TABLE>
Options Outstanding
Shares Available
DOLLARS IN THOUSANDS, for future Price per Aggregate
EXCEPT SHARE AND PER SHARE AMOUNTS Option Grant Shares Share Value
<S> <C> <C> <C> <C>
Balance, December 31, 1991 374,000 426,000 $ 7.44 - $9.19 $ 3,428
Authorization of additional options 1,600,000 - - -
Options granted (615,000) 615,000 $ 11.56 7,111
Options exercised - (58,600) $ 7.44 - $9.19 (458)
Options expired 12,000 (12,000) $ 8.31 - $9.06 (105)
Balance, December 31, 1992 1,371,000 970,400 $ 7.44 - $11.56 9,976
Options granted (67,100) 67,100 $ 13.63 914
Options exercised - (98,900) $ 7.44 - $11.56 (840)
Options expired 4,000 (4,000) $ 9.09 - $11.56 (55)
Balance, December 31, 1993 1,307,900 934,600 $ 7.44 - $13.63 9,995
Options granted (371,000) 371,000 $ 13.13 4,869
Options exercised - (50,488) $ 7.44 - $11.56 (507)
Options expired 23,240 (23,240) $ 11.56 - $13.63 (288)
Balance, December 31, 1994 960,140 1,231,872 $ 7.44 - $13.63 $ 14,069
</TABLE>
9. Shareholders' Equity
PREFERRED STOCK In May, 1994, the Trust's shareholders authorized a class of
25,000,000 shares of undesignated preferred stock which may be issued at the
discretion of the Board of Directors in one or more series having varying
voting, redemption, conversion, distribution, preference and other rights. As of
December 31, 1994, no shares of preferred stock had been issued.
COMMON STOCK In June, 1994, the Trust completed a public offering of
8,000,000 shares of its common stock at $14.25 per share. In July, 1994, the
underwriters exercised their over-allotment option and purchased an additional
479,400 shares. Net proceeds of the offering after deducting underwriting
commissions and direct offering costs aggregated approximately $114.2 million,
of which approximately $17.9 million was used to curtail then existing bank
debt. The remaining net proceeds were temporarily invested in short-term money
market investments and were used primarily for the acquisition of additional
properties.
On April 2, 1993, the Trust's Board of Directors declared a two-for-one
split of the Trust's common stock, effective May 5, 1993 to shareholders of
record as of April 19, 1993. All share and per share information in the
financial statements have been adjusted to retroactively reflect the stock
split. Stock options and all other agreements payable in shares of the Trust's
common stock were amended to provide for issuance of two shares of common stock
for every one share issuable prior to declaration of the stock split. An amount
equal to the par value of the common shares issued was transferred from
additional paid-in capital to the common stock account.
The Trust has entered into stock purchase agreements whereby certain
officers purchased common stock at the then current market price. The Trust
provides 100% financing for the purchase of the shares with interest payable
quarterly at rates escalating from 7% to 8 1/2%. The underlying notes mature
beginning in November, 1998. At December 31, 1994, 543,000 shares were
outstanding under stock purchase agreements. Shares available for future
issuance under this plan total 57,000.
Shares in the amount of 907,456 are reserved for future issuance under the
Trust's dividend reinvestment plan.
10. Quarterly Financial Data (unaudited)
The following is a summary of quarterly results of operations for 1994 and 1993
(In thousands, except per share data):
<TABLE>
1994 First Quarter Second Quarter Third Quarter Fourth Quarter
<S> <C> <C> <C> <C>
Rental income $ 26,706 $ 29,673 $ 39,526 $ 44,066
Income from property operations 9,615 10,920 14,685 17,054
Income before extraordinary item 3,415 4,067 5,975 5,768
Net income 3,415 3,978 5,975 5,768
Per share:
Income before extraordinary item $ .08 $ .09 $ .12 $ .11
Net income .08 .09 .12 .11
1993 First Quarter Second Quarter Third Quarter Fourth Quarter
<S> <C> <C> <C> <C>
Rental income $ 20,182 $ 21,736 $ 22,683 $ 24,483
Income from property operations 7,400 7,790 7,829 8,442
Income before extraordinary item 2,589 2,250 2,933 3,425
Net income 2,589 2,250 2,933 3,425
Per share:
Income before extraordinary item $ .07 $ .06 $ .07 $ .08
Net income .07 .06 .07 .08
</TABLE>
11. Subsequent Events
On February 10, 1995, the Trust purchased an apartment complex for $7.1
million, including closing costs. Subsequent to December 31, 1994 the Trust
entered into additional contracts to purchase two apartment properties in
separate transactions for $13.4 million and nine properties in a portfolio
purchase for $65.5 million. Each contract contains numerous contingencies that
must be satisfied prior to closing and, therefore, there is no assurance that
any of these transactions will be consummated.
At December 31, 1994, the Trust was contractually committed to sell an
apartment complex for $3.1 million and a shopping center outparcel for $560,000.
Subsequent to December 31, 1994, the Trust entered into contracts to sell two
apartment complexes for a total of $7.0 million and an industrial park, shopping
center and vacant land at another shopping center for a total of $3.5 million.
All of the pending property sales are to separate unrelated buyers and no
material gain or loss is anticipated on such sales.
In mid-February, 1995, the Trust sold 1,360,000 shares of common stock to a
group of unrelated institutional investors at a price of $13 1/8 per share. Net
proceeds of $17.8 million were used to curtail then existing bank debt.
GENERAL INFORMATION
GENERAL OFFICES
United Dominion Realty Trust
10 S. Sixth Street, Suite 203
Richmond, Virginia 23219-3802
(804) 780-2691
(804) 343-1912 FAX
GENERAL COUNSEL
Hunton & Williams
Riverfront Plaza, East Tower
901 E. Byrd Street
Richmond, Virginia 23219-4074
INDEPENDENT AUDITORS
Ernst & Young LLP
901 East Cary Street
Richmond, Virginia 23219
TRANSFER AGENT
Mellon Securities Trust Company
Four Station Square, 3rd Floor
Pittsburgh, Pennsylvania 15219-1173
SHAREHOLDERS
On March 1, 1995, the Trust had
5,103 shareholders of record.
EMPLOYEES
For its payroll period ended February 20,
1995, the Trust had 914 full and part-time
employees.
ANNUAL MEETING
The Annual Meeting of Shareholders is
scheduled for Tuesday, May 2, 1995, at 4:00
p.m., at the Omni Richmond Hotel
in Richmond, Virginia. All shareholders
are cordially invited to attend.
MEMBER
National Association of Real Estate
Investment Trusts (NAREIT)
National Apartment Association
National Multi-Housing Council
STOCK LISTING
New York Stock Exchange
Symbol UDR
10-K REPORT
The Trust offers its shareholders, without
charge, copies of its Annual Report on Form
10-K, as reported to the Securities and
Exchange Commission. Requests should be
addressed to Shareholder Relations, United
Dominion Realty Trust, at the Trust's office.
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
The Trust offers its shareholders the
opportunity to purchase additional shares of
common stock through the Dividend
Reinvestment and Stock Purchase Plan.
Information regarding the Plan can be
obtained by completing the enclosed card or
by calling the Trust.
COMMON STOCK PRICE
The table below sets forth the range of the
high and low sales prices per share for each
quarter of the last two years. Dividend
information reflects dividends declared for
each calendar quarter and paid at the end
of the following month. Information for the
first quarter of 1993 gives retroactive effect to
a 2-for-1 share split in May 1993.
Dividend
1993 High Low Declared
1st Quarter $14 13/16 $11 7/8 $.175
2nd Quarter 14 5/8 12 1/2 .175
3rd Quarter 16 5/8 13 1/2 .175
4th Quarter 16 7/8 12 5/8 .175
1994
1st Quarter $15 7/8 $12 3/4 $.195
2nd Quarter 15 1/8 13 3/8 .195
3rd Quarter 14 1/4 13 .195
4th Quarter 14 1/2 12 1/4 .195
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of United Dominion Realty Trust, Inc. (the "Trust") of our report
dated January 25, 1995, except for Note 11 as to which the date is March
6, 1995, included in the 1994 Annual Report of the Trust.
Our audits also included the financial statement schedules of the Trust
listed in Item 14(a). These schedules are the responsibility of the
Trust's management. Our responsibility is to express an opinion based on
our audits. In our opinion, the financial statement schedules referred
to above, when considered in relation to the basic financial statements
taken as a whole, present fairly in all material respects the
information set forth therein.
We also consent to the incorporation by reference in the following
Registration Statements of the Trust and in the related Prospectuses of
our report dated January 25, 1995, except for Note 11 as to which the
date is March 6, 1995, with respect to the consolidated financial
statements and schedules, incorporated by reference or included in this
Annual Report (Form 10-K) for the year ended December 31, 1994.
Registration
Statement Number Description
33-40433 Form S-3, pertaining to the private placement
of 900,000 shares of the Trust's common
stock in May 1991
33-32930 Form S-3, pertaining to the Trust's Dividend
Reinvestment and Stock Purchase Plan
33-48000 Form S-3, pertaining to the Trust's Stock
Option Plan
33-47926 Form S-3, pertaining to the Trust's Stock
Option Plan
33-58201 Form S-8, pertaining to the Employee's Stock
Purchase Plan
33-55159 Form S-3, Shelf Registration pertaining to $400
million of Common Stock, Preferred Stock and
Debentures
ERNST & YOUNG LLP
Richmond, Virginia
March 29, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 7,261
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,394
<PP&E> 1,007,599
<DEPRECIATION> 120,341
<TOTAL-ASSETS> 911,913
<CURRENT-LIABILITIES> 0
<BONDS> 526,664
<COMMON> 50,356
0
0
<OTHER-SE> 306,612
<TOTAL-LIABILITY-AND-EQUITY> 911,913
<SALES> 139,972
<TOTAL-REVENUES> 140,836
<CGS> 87,698
<TOTAL-COSTS> 87,698
<OTHER-EXPENSES> 34,658
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,303
<INCOME-PRETAX> 19,118
<INCOME-TAX> 0
<INCOME-CONTINUING> 19,226
<DISCONTINUED> 0
<EXTRAORDINARY> (89)
<CHANGES> 0
<NET-INCOME> 19,137
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.41
</TABLE>
