UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
Pursuant to Section 12, 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
UNITED DOMINION REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends its Current Report on Form 8-K dated
October 21, 1997, which was filed with the Securities and Exchange Commission on
November 5, 1997, to include the Financial Statements of Real Estate Properties
Acquired, the Consolidated Pro Forma Financial Statements and Notes thereto, and
Exhibits as set forth on the pages attached hereto.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Real Estate Properties Acquired
(b) Pro Forma Financial Information
(c) Exhibits
(23) Consent of Experts
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereto duly authorized.
UNITED DOMINION REALTY TRUST, INC.
(Registrant)
/s/ Jerry A. Davis
----------------------------------
Jerry A. Davis
Vice President and Chief Accounting Officer
Date: December 31, 1997
<PAGE>
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
Description Location
(a) Financial Statements of Real Estate Properties Acquired 3 through 27
(b) Pro Forma Financial Information 28 through 43
(c) Exhibits
(23) Consents of Independent Public Accountants 44
<PAGE>
BAMMELWOOD APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Auditors' Report
To the Owners of
Bammelwood Apartments
We have audited the accompanying statement of rental operations (as defined in
Note 2) of Bammelwood Apartments for the year ended December 31, 1996. This
financial statement is the responsibility of the management of Bammelwood
Apartments. Our responsibility is to express an opinion on this statement based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.
The statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
Current Report on Form 8-K of United Dominion Realty Trust, Inc.), as described
in Note 4, and is not intended to be a complete presentation of Bammelwood
Apartments' revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenues and operating expenses, as described in Note 2, of
Bammelwood Apartments for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
BAMMELWOOD APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
REVENUES FROM RENTAL PROPERTY $ 1,126,392
------------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 152,586
Repairs and Maintenance 228,728
Utilities 157,434
Property Management Fees 44,991
Other Operating Expenses 188,099
------------
TOTAL RENTAL PROPERTY EXPENSES 771,838
------------
INCOME FROM RENTAL OPERATIONS $ 354,554
============
The accompanying notes are an integral part of this statement.
<PAGE>
BAMMELWOOD APARTMENTS
NOTES TO THE STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
NOTE 1 - BASIS OF PRESENTATION
Bammelwood Apartments (The Property) consists of a 226 unit garden style
residential apartment community located in Houston, Texas together with the
existing leases. The assets that comprise the Property have been held as an
investment of Bammelwood 228 L. P., a Texas limited partnership (the Owner),
throughout the year ended December 31, 1996. The accompanying financial
statement presents the results of rental operations of the Property as a
stand-alone entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition - The accompanying statement of rental
operations has been prepared using the accrual method of accounting. Certain
expenses such as depreciation, amortization, income taxes and mortgage interest
expense are not reflected in the statement of rental operations, as required by
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission.
Repairs and Maintenance - Repairs and maintenance costs are expensed as
incurred, while significant improvements, renovations and replacements are
capitalized.
Advertising - Advertising costs are expensed when incurred.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - PROPERTY MANAGEMENT FEES
Property management services were provided through Judwin Properties, Inc., an
affiliate of the owner of the property. Fees for such services were 4% of gross
receipts from operations.
NOTE 4 - SALE OF PROPERTY
The property was sold to United Dominion Realty, L. P., a wholly owned
subsidiary of United Dominion Realty Trust, Inc. on October 30, 1997. This
statement of rental operations has been prepared to be included in a Current
Report on Form 8-K to be filed by United Dominion Realty Trust, Inc.
<PAGE>
BRAESRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Auditors' Report
To the Owners of
Braesridge Apartments
We have audited the accompanying statement of rental operations (as defined in
Note 2) of Braesridge Apartments for the year ended December 31, 1996. This
financial statement is the responsibility of the management of Braesridge
Apartments. Our responsibility is to express an opinion on this statement based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.
The statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
Current Report on Form 8-K of United Dominion Realty Trust, Inc.), as described
in Note 4, and is not intended to be a complete presentation of Braesridge
Apartments' revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenues and operating expenses, as described in Note 2, of
Braesridge Apartments for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
BRAESRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
REVENUES FROM RENTAL PROPERTY $ 2,889,746
------------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 286,778
Repairs and Maintenance 482,932
Utilities 222,924
Property Management Fees 100,031
Other Operating Expenses 494,164
------------
TOTAL RENTAL PROPERTY EXPENSES 1,586,829
------------
INCOME FROM RENTAL OPERATIONS $ 1,302,917
============
The accompanying notes are an integral part of this statement.
<PAGE>
BRAESRIDGE APARTMENTS
NOTES TO THE STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
NOTE 1 - BASIS OF PRESENTATION
Braesridge Apartments (The Property) consists of a 545 unit garden style
residential apartment community located in Houston, Texas together with the
existing leases. The assets that comprise the Property have been held as an
investment of Braesridge 305 Associates, L. P., a Texas limited partnership (the
Owner), throughout the year ended December 31, 1996. The accompanying financial
statement presents the results of rental operations of the Property as a
stand-alone entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition - The accompanying statement of rental
operations has been prepared using the accrual method of accounting. Certain
expenses such as depreciation, amortization, income taxes and mortgage interest
expense are not reflected in the statement of rental operations, as required by
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission.
Repairs and Maintenance - Repairs and maintenance costs are expensed as
incurred, while significant improvements, renovations and replacements are
capitalized.
Advertising - Advertising costs are expensed when incurred.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - PROPERTY MANAGEMENT FEES
Property management services were provided through Judwin Properties, Inc., an
affiliate of the owner of the property. Fees for such services were 3.5% of
gross receipts from operations.
NOTE 4 - SALE OF PROPERTY
The property was sold to United Dominion Realty, L. P., a wholly owned
subsidiary of United Dominion Realty Trust, Inc. on September 26, 1997. This
statement of rental operations has been prepared to be included in a Current
Report on Form 8-K to be filed by United Dominion Realty Trust, Inc.
<PAGE>
CAMINO VILLAGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Auditors' Report
To the Owners of
Camino Village Apartments
We have audited the accompanying statement of rental operations (as defined in
Note 2) of Camino Village Apartments for the year ended December 31, 1996. This
financial statement is the responsibility of the management of Camino Village
Apartments. Our responsibility is to express an opinion on this statement based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.
The statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
Current Report on Form 8-K of United Dominion Realty Trust, Inc.), as described
in Note 4, and is not intended to be a complete presentation of Camino Village
Apartments' revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenues and operating expenses, as described in Note 2, of Camino
Village Apartments for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
CAMINO VILLAGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
REVENUES FROM RENTAL PROPERTY $ 2,848,822
------------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 294,099
Repairs and Maintenance 481,717
Utilities 161,379
Property Management Fees 113,140
Other Operating Expenses 354,194
------------
TOTAL RENTAL PROPERTY EXPENSES 1,404,529
------------
INCOME FROM RENTAL OPERATIONS $ 1,444,293
============
The accompanying notes are an integral part of this statement.
<PAGE>
CAMINO VILLAGE APARTMENTS
NOTES TO THE STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
NOTE 1 - BASIS OF PRESENTATION
Camino Village Apartments (The Property) consists of a 449 unit garden style
residential apartment community located in Houston, Texas together with the
existing leases. The assets that comprise the Property have been held as an
investment of Camino Village Associates, Ltd., a Texas limited partnership (the
Owner), throughout the year ended December 31, 1996. The accompanying financial
statement presents the results of rental operations of the Property as a
stand-alone entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition - The accompanying statement of rental
operations has been prepared using the accrual method of accounting. Certain
expenses such as depreciation, amortization, income taxes and mortgage interest
expense are not reflected in the statement of rental operations, as required by
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission.
Repairs and Maintenance - Repairs and maintenance costs are expensed as
incurred, while significant improvements, renovations and replacements are
capitalized.
Advertising - Advertising costs are expensed when incurred.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - PROPERTY MANAGEMENT FEES
Property management services were provided through Judwin Properties, Inc., an
affiliate of the owner of the property. Fees for such services were 4% of gross
receipts from operations.
NOTE 4 - SALE OF PROPERTY
The property was sold to United Dominion Realty, L. P., a wholly owned
subsidiary of United Dominion Realty Trust, Inc. on November 20, 1997. This
statement of rental operations has been prepared to be included in a Current
Report on Form 8-K to be filed by United Dominion Realty Trust, Inc.
<PAGE>
PECAN GROVE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Auditors' Report
To the Owners of
Pecan Grove Apartments
We have audited the accompanying statement of rental operations (as defined in
Note 2) of Pecan Grove Apartments for the year ended December 31, 1996. This
financial statement is the responsibility of the management of Pecan Grove
Apartments. Our responsibility is to express an opinion on this statement based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.
The statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
Current Report on Form 8-K of United Dominion Realty Trust, Inc.), as described
in Note 4, and is not intended to be a complete presentation of Pecan Grove
Apartments' revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenues and operating expenses, as described in Note 2, of Pecan
Grove Apartments for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
PECAN GROVE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
REVENUES FROM RENTAL PROPERTY $ 3,524,526
-----------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 473,624
Repairs and Maintenance 593,883
Utilities 215,818
Property Management Fees 176,521
Other Operating Expenses 451,183
-----------
TOTAL RENTAL PROPERTY EXPENSES 1,911,029
-----------
INCOME FROM RENTAL OPERATIONS $ 1,613,497
===========
The accompanying notes are an integral part of this statement.
<PAGE>
PECAN GROVE APARTMENTS
NOTES TO THE STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
NOTE 1 - BASIS OF PRESENTATION
Pecan Grove Apartments (The Property) consists of a 580 unit garden style
residential apartment community located in Houston, Texas together with the
existing leases. The assets that comprise the Property have been held as an
investment of Stanford Capital Realty Fund, Ltd., a Texas limited partnership
(the Owner), throughout the year ended December 31, 1996. The accompanying
financial statement presents the results of rental operations of the Property as
a stand-alone entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition - The accompanying statement of rental
operations has been prepared using the accrual method of accounting. Certain
expenses such as depreciation, amortization, income taxes and mortgage interest
expense are not reflected in the statement of rental operations, as required by
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission.
Repairs and Maintenance - Repairs and maintenance costs are expensed as
incurred, while significant improvements, renovations and replacements are
capitalized.
Advertising - Advertising costs are expensed when incurred.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - PROPERTY MANAGEMENT FEES
Property management services were provided through Judwin Properties, Inc., an
affiliate of the owner of the property. Fees for such services were 5% of gross
receipts from operations.
NOTE 4 - SALE OF PROPERTY
The property was sold to United Dominion Realty, L. P., a wholly owned
subsidiary of United Dominion Realty Trust, Inc. on September 26, 1997. This
statement of rental operations has been prepared to be included in a Current
Report on Form 8-K to be filed by United Dominion Realty Trust, Inc.
<PAGE>
WATERSIDE AT IRONBRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Auditors' Report
To the Owners of
Waterside at Ironbridge Apartments
We have audited the accompanying statement of rental operations (as defined in
Note 2) of Waterside at Ironbridge Apartments for the year ended December 31,
1996. This financial statement is the responsibility of the management of
Waterside at Ironbridge Apartments. Our responsibility is to express an opinion
on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.
The statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
Current Report on Form 8-K of United Dominion Realty Trust, Inc.), as described
in Note 4, and is not intended to be a complete presentation of Waterside at
Ironbridge Apartments' revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the revenues and operating expenses, as described in Note 2, of
Waterside at Ironbridge Apartments for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 14, 1997
<PAGE>
WATERSIDE AT IRONBRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
REVENUES FROM RENTAL PROPERTY $ 2,092,272
------------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 105,706
Repairs and Maintenance 209,464
Utilities 115,615
Property Management Fees 83,809
Other Operating Expenses 150,664
-------------
TOTAL RENTAL PROPERTY EXPENSES 665,258
-------------
INCOME FROM RENTAL OPERATIONS $ 1,427,014
=============
The accompanying notes are an integral part of this statement.
<PAGE>
WATERSIDE AT IRONBRIDGE APARTMENTS
NOTES TO THE STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1996
NOTE 1 - BASIS OF PRESENTATION
Waterside at Ironbridge Apartments (The Property) consists of a 265 unit garden
style residential apartment community located in Richmond, Virginia together
with the existing leases. The assets that comprise the Property have been held
as an investment of Nissen Waterside Limited Partnership, a Maryland limited
partnership (the Owner), throughout the year ended December 31, 1996. The
accompanying financial statement presents the results of rental operations of
the Property as a stand-alone entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition - The accompanying statement of rental
operations has been prepared using the accrual method of accounting. Certain
expenses such as depreciation, amortization, income taxes and mortgage interest
expense are not reflected in the statement of rental operations, as required by
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission.
Repairs and Maintenance - Repairs and maintenance costs are expensed as
incurred, while significant improvements, renovations and replacements are
capitalized.
Advertising - Advertising costs are expensed when incurred.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - PROPERTY MANAGEMENT FEES
Property management services were provided through Great Atlantic. Fees for such
services were 4% of gross receipts from operations.
NOTE 4 - SALE OF PROPERTY
The property was sold to United Dominion Realty Trust, Inc. on September 29,
1997. This statement of rental operations has been prepared to be included in a
Current Report on Form 8-K to be filed by United Dominion Realty Trust, Inc.
<PAGE>
BAMMELWOOD APARTMENTS
STATEMENT OF RENTAL OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Accountants' Compilation Report
To the Owners of
Bammelwood Apartments
We have compiled the accompanying statement of rental operations exclusive of
mortgage interest expense, depreciation, amortization and income taxes of
Bammelwood Apartments for the nine months ended September 30, 1997, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management and owners. We have not
audited or reviewed the accompanying financial statement and, accordingly, do
not express an opinion or any other form of assurance on it.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the results of operations. Accordingly, this financial statement is not
designed for those who are not informed about such matters.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
BAMMELWOOD APARTMENTS
STATEMENT OF RENTAL OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(See Independent Accountants' Compilation Report)
REVENUES FROM RENTAL PROPERTY $ 812,783
----------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 114,701
Repairs and Maintenance 151,577
Utilities 111,800
Property Management Fees 32,445
Other Operating Expenses 135,455
----------
TOTAL RENTAL PROPERTY EXPENSES 545,978
----------
INCOME FROM RENTAL OPERATIONS $ 266,805
==========
<PAGE>
BRAESRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
EIGHT MONTHS ENDED AUGUST 31, 1997
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Accountants' Compilation Report
To the Owners of
Braesridge Apartments
We have compiled the accompanying statement of rental operations exclusive of
mortgage interest expense, depreciation, amortization and income taxes of
Braesridge Apartments for the eight months ended August 31, 1997, in accordance
with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management and owners. We have not
audited or reviewed the accompanying financial statement and, accordingly, do
not express an opinion or any other form of assurance on it.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the results of operations. Accordingly, this financial statement is not
designed for those who are not informed about such matters.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
RAESRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
EIGHT MONTHS ENDED AUGUST 31, 1997
(See Independent Accountants' Compilation Report)
REVENUES FROM RENTAL PROPERTY $ 1,895,356
-----------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 191,595
Repairs and Maintenance 343,590
Utilities 151,530
Property Management Fees 66,380
Other Operating Expenses 317,848
-----------
TOTAL RENTAL PROPERTY EXPENSES 1,070,943
-----------
INCOME FROM RENTAL OPERATIONS $ 824,413
===========
<PAGE>
CAMINO VILLAGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Accountants' Compilation Report
To the Owners of
Camino Village Apartments
We have compiled the accompanying statement of rental operations exclusive of
mortgage interest expense, depreciation, amortization and income taxes of Camino
Village Apartments for the nine months ended September 30, 1997, in accordance
with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management and owners. We have not
audited or reviewed the accompanying financial statement and, accordingly, do
not express an opinion or any other form of assurance on it.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the results of operations. Accordingly, this financial statement is not
designed for those who are not informed about such matters.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
CAMINO VILLAGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(See Independent Accountants' Compilation Report)
REVENUES FROM RENTAL PROPERTY $ 2,206,052
------------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 221,546
Repairs and Maintenance 386,236
Utilities 129,947
Property Management Fees 84,808
Other Operating Expenses 256,708
------------
TOTAL RENTAL PROPERTY EXPENSES 1,079,245
------------
INCOME FROM RENTAL OPERATIONS $ 1,126,807
============
<PAGE>
PECAN GROVE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
EIGHT MONTHS ENDED AUGUST 31, 1997
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Accountants' Compilation Report
To the Owners of
Pecan Grove Apartments
We have compiled the accompanying statement of rental operations exclusive of
mortgage interest expense, depreciation, amortization and income taxes of Pecan
Grove Apartments for the eight months ended August 31, 1997, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management and owners. We have not
audited or reviewed the accompanying financial statement and, accordingly, do
not express an opinion or any other form of assurance on it.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the results of operations. Accordingly, this financial statement is not
designed for those who are not informed about such matters.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 20, 1997
<PAGE>
PECAN GROVE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
EIGHT MONTHS ENDED AUGUST 31, 1997
(See Independent Accountants' Compilation Report)
REVENUES FROM RENTAL PROPERTY $ 2,402,678
------------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 314,377
Repairs and Maintenance 393,708
Utilities 138,262
Property Management Fees 118,983
Other Operating Expenses 311,051
------------
TOTAL RENTAL PROPERTY EXPENSES 1,276,381
------------
INCOME FROM RENTAL OPERATIONS $ 1,126,297
============
<PAGE>
WATERSIDE AT IRONBRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
EIGHT MONTHS ENDED AUGUST 31, 1997
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804) 346-2626
FAX: (804) 346-9311
Independent Accountants' Compilation Report
To the Owners of
Waterside at Ironbridge Apartments
We have compiled the accompanying statement of rental operations exclusive of
mortgage interest expense, depreciation, amortization and income taxes of
Waterside at Ironbridge Apartments for the eight months ended August 31, 1997,
in accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management and owners. We have not
audited or reviewed the accompanying financial statement and, accordingly, do
not express an opinion or any other form of assurance on it.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the results of operations. Accordingly, this financial statement is not
designed for those who are not informed about such matters.
/s/ L. P. Martin & Company, P.C.
- ---------------------------------
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 14, 1997
<PAGE>
WATERSIDE AT IRONBRIDGE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
EIGHT MONTHS ENDED AUGUST 31, 1997
(See Independent Accountants' Compilation Report)
REVENUES FROM RENTAL PROPERTY $ 1,455,721
------------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 87,283
Repairs and Maintenance 142,760
Utilities 76,804
Property Management Fees 58,229
Other Operating Expenses 112,081
------------
TOTAL RENTAL PROPERTY EXPENSES 477,157
------------
INCOME FROM RENTAL OPERATIONS $ 978,564
============
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited consolidated pro forma balance sheet at
September 30, 1997, gives effect to the acquisition of Bammelwood Apartments
acquired on October 30, 1997 and Camino Village Apartments acquired on November
20, 1997 and other acquisitions made by United Dominion Realty Trust Inc. and
its subsidiaries, including United Dominion Realty, L.P., its Operating
Partnership, (collectively, the "Company") during 1996 and 1997. Other than
Bammelwood Apartments and Camino Village Apartments, all acquisitions are
reflected in the Company's historical unaudited consolidated balance sheet at
September 30, 1997 included in the Company's quarterly report on Form 10-Q for
the quarter then ended.
The unaudited consolidated pro forma statements of operations for the
twelve months ended December 31, 1996 and the nine months ended September 30,
1997 give effect to the following 1997 acquisitions as if they had occurred at
the beginning of each period presented: (i) the acquisition of Crosswinds
Apartments (formerly Tradewinds Apartments), Stoney Pointe Apartments (formerly
Stoneybrooke Apartments) and Dominion Trinity Place Apartments, (formerly
Trinity Place Apartments) on February 28, 1997, (collectively the "Option
Properties"), (ii) the acquisition of Anderson Mill Oaks Apartments acquired on
March 25, 1997, Oak Ridge Apartments (formerly Post Oak Ridge Apartments)
acquired on March 27, 1997, and Green Oaks Apartments (formerly Pineloch
Apartments) and Skyhawk Apartments (formerly Seahawk Apartments) acquired on May
8, 1997, (collectively the "Texas Properties"), (iii) the July 1, 1997,
portfolio acquisition of five apartment communities which consists of Lakeside
Apartments, Mallards of Brandywine Apartments, Lotus Landing Apartments, Orange
Oaks Apartments and Forest Creek Apartments, (collectively the "Florida
Portfolio"), (iv) the acquisition of Greenhouse Patio Apartments (formerly Pecan
Grove Apartments) and Braesridge Apartments acquired on September 26, 1997,
Bammelwood Apartments acquired on October 30, 1997 and Camino Village Apartments
acquired on November 20, 1997, (collectively the "Houston Portfolio"), and (v)
the acquisition of Waterside at Ironbridge Apartments on September 29, 1997.
In addition, the unaudited consolidated pro forma statement of
operations for the twelve months ended December 31, 1996 gives effect to the
following acquisitions as if they had occurred on January 1, 1996: (i) the
acquisition of Steeplechase Apartments and Westland Park Apartments on March 7,
1996 and May 9, 1996 , respectively, as previously reported on Form 8-K dated
October 31, 1996, (ii) the acquisition of a portfolio of 18 apartment
communities on August 15, 1996 (the "Southeast Portfolio") as previously
reported on Form 8-K dated August 15, 1996, and (iii) the acquisition of 44
apartment communities owned by South West Property Trust Inc. ("South West") on
December 31, 1996 as previously reported on Form 8-K dated December 31, 1996.
The unaudited consolidated pro forma statements of operations have been
prepared by the management of the Company. The unaudited consolidated pro forma
statements of operations are not necessarily indicative of the results that
would have occurred had the acquisitions been completed on the dates indicated,
nor are purported to be indicative of future results. The unaudited consolidated
pro forma statements of operations should be read in conjunction with the
Company's audited consolidated financial statements for the year ended December
31, 1996 (included in the Company's Form 10-K for the twelve months ended
December 31, 1996) and its unaudited consolidated financial statements as of
September 30, 1997 and for the nine months then ended (included in the Company's
Form 10-Q for the quarterly period ended September 30, 1997) and the
accompanying notes thereto.
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED PRO FORMA BALANCE SHEETS
September 30, 1997
(In thousands, except for share data)
(Unaudited)
<TABLE>
<CAPTION>
Acquisition of
Bammelwood and
Assets Historical (1) Camino Village Pro Forma
----------------- ---------------- -----------------
<S> <C>
Real estate owned:
Real estate held for investment $ 2,217,063 $ 19,457 (2) $ 2,236,520
Less: accumulated depreciation 200,538 200,538
------------- ---------- -------------
2,016,525 19,457 2,035,982
Real estate under development 33,628 33,628
Real estate held for disposition 131,576 131,576
Cash and cash equivalents 5,383 5,383
Other assets 65,639 65,639
------------- ---------- -------------
Total assets $ 2,252,751 $ 19,457 $ 2,272,208
============= ========== =============
Liabilities and shareholders' equity
Notes payable-secured $ 412,624 $ 11,671 (3) $ 424,295
Notes payable-unsecured 687,521 3,698 (3) 691,219
Distributions payable to common shareholders 22,261 22,261
Accounts payable, accrued expenses and other liabilities 62,361 62,361
------------- ---------- -------------
Total liabilities 1,184,767 15,369 1,200,136
Minority interest of unitholders in operating partnership 10,482 4,088 (3) 14,570
Shareholders' equity:
Preferred stock, no par value; $25 liquidation preference,
25,000,000 shares authorized;
4,200,000 shares 9.25% Series A Cumulative Redeemable 105,000 105,000
6,000,000 shares 8.60% Series B Cumulative Redeemable 150,000 150,000
Common stock, $1 par value; 150,000,000 shares authorized
88,161,626 shares issued and outstanding (81,982,551 in 1996) 88,162 88,162
Additional paid-in capital 893,701 893,701
Notes receivable from officer-shareholders (9,168) (9,168)
Distributions in excess of net income (170,193) (170,193)
------------ ---------- --------------
Total shareholders' equity 1,057,502 0 1,057,502
------------ ---------- --------------
Total liabilities and shareholders' equity $ 2,252,751 $ 19,457 $ 2,272,208
============ ========== ==============
</TABLE>
See accompanying notes.
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
Basis of Presentation
The accompanying unaudited consolidated pro forma balance sheet gives pro forma
effect as of September 30, 1997, of the acquisition by the Company of Bammelwood
Apartments on October 30, 1997 and Camino Village Apartments on November 20,
1997 for an aggregate purchase price of approximately $19.5 million, including
closing costs. The acquisitions were funded with additional borrowings under
bank lines of credit of approximately $3.7 million, the assumption of two
mortgage notes payable aggregating $11.7 million and the issuance of Operating
Partnership Units with an aggregate value of $4.1 million.
(1) Represents the Company's Historical Balance Sheet contained in its
Quarterly Report on Form 10-Q for the nine months ended September 30,
1997.
(2) Represents the acquisition by the Company of Bammelwood Apartments and
the Camino Village Apartments on October 30, 1997 and November 20,
1997, respectively, for an aggregate purchase price of approximately
$19.5 million, including closing costs.
(3) Represents the financing of Bammelwood Apartments and Camino Village
Apartments which consists of the following: (i) bank line borrowings by
the Company of approximately $3.7 million at a weighted average
interest rate of 6.09% (represents the Company's weighted average
market interest rate for short-term bank borrowings at the time of the
acquisitions), (ii) the assumptions two mortgage notes payable
aggregating $11.7 million bearing a weighted average interest of 9.0%
and (iii) the issuance of 277,132 Operating Partnership Units at a
value of $14.75 per Unit for an aggregate value of $4.1 million.
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED DECEMBER 31, 1996
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Acquisition of
Southeast Portfolio Acquisition of Acquisitions
Previously Reported Southeast Portfolio Previously Reported
on Form 8-K Dated Pro Forma on Form 8-K Dated
Historical (1) August 15, 1996 (2) Adjustments October 31, 1996 (9)
---------------- ------------------ ----------------- ------------------
<S> <C>
Revenues
Rental income $ 242,112 $ 12,917 $ 3,194 (3) $ 1,278
Interest, dividend and other
non-property income 1,707
---------------- ------------------ ----------------- ------------------
243,819 12,917 3,194 1,278
Expenses
Rental expenses:
Utilities 17,735 881 218 (3) 50
Repairs and maintenance 40,665 1,462 361 (3) 139
Real estate taxes 17,348 972 240 (3) 114
Property management 5,575 636 (242) (3) (4) 69
Other operating expenses 23,510 965 321 (3) (5) 153
Depreciation of real estate owned 47,410 3,660 (6)
Interest 50,843 6,789 (7)
General and administrative 5,418
Other depreciation and amortization 1,299
Impairment loss on real estate
held for disposition 290
---------------- ------------------ ----------------- ------------------
210,093 4,916 11,347 525
---------------- ------------------ ----------------- ------------------
Income before gains on sales of investments
and minority interest of unitholders
in operating partnership 33,726 8,001 (8,153) 753
Gains on sales of investments 4,346
---------------- ------------------ ----------------- ------------------
Income before minority interest of
unitholders in operating partnership 38,072 8,001 (8,153) 753
Minority interest of unitholders in
operating partnership (58)
---------------- ------------------ ----------------- ------------------
Income before extraordinary item 38,014 8,001 (8,153) 753
================ ================== ================= ==================
Dividends to preferred shareholders (9,713)
================ ================== ================= ==================
Net income per common share before
extraordinary item $ 0.49
================
Dividends declared per common share $ 0.96
================
Weighted average number of common
shares outstanding 57,482 1,352 (8)
<CAPTION>
Acquisitions Acquisition of
Previously Reported South West Acquisition of
on Form 8-K Dated Property Trust Inc South West
October 31, 1996 Previously Reported Property Trust Inc
Pro Forma on Form 8-K Dated Pro Forma
Adjustments December 31, 1996 (14) Adjustments
------------------- ---------------------- -----------------
Revenues
Rental income $ 95 (10) $ 82,169 $
Interest, dividend and other
non-property income 976
------------------- ---------------------- -----------------
95 83,145 0
Expenses
Rental expenses:
Utilities 4 (10) 5,492
Repairs and maintenance 10 (10) 10,818
Real estate taxes 8 (10) 8,631
Property management (30)(10)(11) 2,884 (1,089) (15)
Other operating expenses 11 (10) 10,418
Depreciation of real estate owned 252 (12) 13,447 2,015 (16)
Interest 499 (13) 14,126 (1,316) (17)
General and administrative 3,133 (1,438) (18)
Other depreciation and amortization 330
Impairment loss on real estate
held for disposition
------------------- ---------------------- -----------------
754 69,279 (1,828)
------------------- ---------------------- -----------------
Income before gains on sales of investments
and minority interest of unitholders
in operating partnership (659) 13,866 1,828
Gains on sales of investments
------------------- ---------------------- -----------------
Income before minority interest of
unitholders in operating partnership (659) 13,866 1,828
Minority interest of unitholders in
operating partnership
------------------- ---------------------- -----------------
Income before extraordinary item (659) 13,866 1,828
=================== ====================== =================
Dividends to preferred shareholders
=================== ====================== =================
Net income per common share before
extraordinary item
Dividends declared per common share
Weighted average number of common
shares outstanding 22,671 (19)
<CAPTION>
Pro Forma Acquisition Acquisition Acquisition
Before 1997 of Option of Texas of Florida
Acquisitions Properties (20) Properties (21) Portfolio (23)
-------------- ----------------- ---------------- --------------
Revenues
Rental income $ 341,765 $ 7,862 $ 9,748 $ 5,724
Interest, dividend and other
non-property income 2,683
-------------- ----------------- ---------------- --------------
344,448 7,862 9,748 5,724
Expenses
Rental expenses:
Utilities 24,380 394 707 389
Repairs and maintenance 53,455 796 1,246 872
Real estate taxes 27,313 457 1,124 499
Property management 7,803 390 362 287
Other operating expenses 35,378 609 921 941
Depreciation of real estate owned 66,784
Interest 70,941
General and administrative 7,113
Other depreciation and amortization 1,629
Impairment loss on real estate
held for disposition 290
-------------- ----------------- ---------------- --------------
295,086 2,646 4,360 2,988
-------------- ----------------- ---------------- --------------
Income before gains on sales of investments
and minority interest of unitholders
in operating partnership 49,362 5,216 5,388 2,736
Gains on sales of investments 4,346
-------------- ----------------- ---------------- --------------
Income before minority interest of
unitholders in operating partnership 53,708 5,216 5,388 2,736
Minority interest of unitholders in
operating partnership (58) -- --
-------------- ----------------- ---------------- --------------
Income before extraordinary item 53,650 5,216 5,388 2,736
============== ================= ================ ==============
Dividends to preferred shareholders (9,713)
============== ================= ================ ==============
Net income per common share before
extraordinary item $ 0.54
==============
Dividends declared per common share $ 0.96
==============
Weighted average number of common
shares outstanding 81,505
<CAPTION>
Pro Forma
as Previously
Reported on Form
8-K/A dated
July 1, 1997
Pro and filed on Acquisition Acquisition of
Form September 15, 1997 of Houston Waterside at Pro Forma
Adjustments Pro Forma Portfolio (27) Ironbridge (28) Adjustments Pro Forma
------------ ------------------ ------------- ---------------- ------------- ---------
Revenues
Rental income $ $ 365,099 $ 10,389 $ 2,092 $ $ 377,580
Interest, dividend and other
non-property income 2,683 2,683
-------------- ------------- ------------- ------------ ------------ ----------
0 367,782 10,389 2,092 - 380,263
Expenses
Rental expenses:
Utilities 25,870 758 116 26,744
Repairs and maintenance 56,369 1,787 209 58,365
Real estate taxes 29,393 1,207 106 30,706
Property management (278) (24) 8,564 435 84 (135) (30) 8,948
Other operating expenses 37,849 1,487 150 39,486
Depreciation of real estate owned 4,412 (25) 71,196 2,024 (31) 73,220
Interest 9,929 (26) 80,870 4,239 (32) 85,109
General and administrative 7,113 7,113
Other depreciation and amortization 1,629 1,629
Impairment loss on real estate
held for disposition 290 290
-------------- ------------- ------------- ------------ ------------ ----------
14,063 319,143 5,674 665 6,128 331,610
-------------- -------------- ------------- ------------ ------------ ----------
Income before gains on sales of
investmnts and minority
interest of unitholders
in operating partnership (14,063) 48,639 4,715 1,427 (6,128) 48,653
Gains on sales of investments 4,346 - - - 4,346
-------------- ------------ ------------- ------------ ------------ ---------
Income before minority interest of
unitholders in operating
partnership (14,063) 52,985 4,715 1,427 (6,128) 52,999
Minority interest of unitholders in
operating partnership - (58) (524) (33) (582)
-------------- ------------- ------------- ------------ ------------ ---------
Income before extraordinary item (14,063) 52,927 4,715 1,427 (6,652) 52,417
============== ============= ============= ============ ============ =========
Dividends to preferred shareholders (9,713) (9,713)
=============== ============= ============= ============ ============ =========
Net income per common share before
extraordinary item $ 0.53 $ 0.52
============= ============
Dividends declared per common share $ 0.96 $ 0.96
============= ============
Weighted average number of
shares outstanding 81,505 81,505
</TABLE>
See accompanying notes.
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Acquisition Acquisition of Acquisition of Acquisition
of Option Texas Texas Properties of Florida
Historical (1) Properties (20) Properties (21) Adjustments (22) Portfolio (23)
-------------- --------------- ----------------- ----------------- ----------------
<S> <C>
Revenues
Rental income $ 284,182 $ 1,401 $ 2,346 $ 473 $ 2,943
Interest and other non-property income 867
-------------- --------------- ----------------- ----------------- ----------------
285,049 1,401 2,346 473 2,943
Expenses
Rental expenses:
Utilities 18,290 79 168 36 207
Repairs and maintenance 40,707 152 253 53 460
Real estate taxes 23,014 76 294 55 249
Property management 9,154 70 88 18 152
Other rental expenses 30,051 87 268 48 466
Real estate depreciation 55,029
Interest 58,265
General and administrative 5,271
Other depreciation and amortization 1,339
Impairment loss on real estate held
for disposition 1,400
-------------- --------------- ----------------- ----------------- ----------------
242,520 464 1,071 210 1,534
Income before gains (losses) on sales of
investments and minority interest
of unitholders in operating
partnership 42,529 937 1,275 263 1,409
Gains on sales of investments 12,682
Minority interest of unitholders in
operating partnership (112)
-------------- --------------- ----------------- ----------------- ----------------
Income before extraordinary item 55,099 937 1,275 263 1,409
============== =============== ================= ================= ================
Dividends to preferred shareholders (11,692)
============== =============== ================= ================= ================
Net income per common share before
extraordinary item $ 0.50
==============
Dividends declared per common share $ 0.7575
==============
Weighted average number of common
shares outstanding 86,602
<CAPTION>
Option Properties,
Texas Properties Acquisition of
and Florida Houston Properties
Portfolio Acquisition Acquisition of and Waterside at
Pro Forma of Houston Waterside at Ironbridge
Adjustments Portfolio (27) Ironbridge (28) Adjustments (29)
Revenues ---------------- -------------- ---------------- -------------------
Rental income
Interest and other non-property income $ $ 7,317 $ 1,456 $ 634
---------------- -------------- ---------------- -------------------
0 7,317 1,456 634
Expenses
Rental expenses:
Utilities
Repairs and maintenance 532 77 40
Real estate taxes 1,275 143 96
Property management 842 87 65
Other rental expenses (92) (24) 303 58 27
Real estate depreciation 1,021 112 81
Interest 1,059 (25)
General and administrative 2,801 (26)
Other depreciation and amortization
Impairment loss on real estate held
for disposition
---------------- ------------ ---------------- ------------------
3,768 3,973 477 309
Income before gains (losses) on sales of
investments and minority interest
of unitholders in operating
partnership
Gains on sales of investments (3,768) 3,344 979 325
Minority interest of unitholders in
operating partnership
---------------- ------------ ---------------- ------------------
Income before extraordinary item
(3,768) 3,344 979 325
================ ============ ================ ==================
Dividends to preferred shareholders
================ ============= ================ ==================
Net income per common share before
extraordinary item
Dividends declared per common share
Weighted average number of common
shares outstanding
<CAPTION>
Pro Forma
Adjustments Pro Forma
--------------- --------------
Revenues
Rental income $ $ 300,752
Interest and other non-property income 867
--------------- --------------
0 301,619
Expenses
Rental expenses:
Utilities 19,429
Repairs and maintenance 43,139
Real estate taxes 24,682
Property management (99)(30) 9,679
Other rental expenses 32,134
Real estate depreciation 1,399 (31) 57,487
Interest 3,146 (32) 64,212
General and administrative 5,271
Other depreciation and amortization 1,399
Impairment loss on real estate held 1,400
for disposition -------------- --------------
4,446 258,772
Income before gains (losses) on sales of
investments and minority interest
of unitholders in operating
partnership (4,446) 42,847
Gains on sales of investments 12,682
Minority interest of unitholders in
operating partnership (331)(33) (443)
--------------- --------------
(4,777) 55,086
Income before extraordinary item =============== ==============
(11,692)
Dividends to preferred shareholders =============== ==============
Net income per common share before
extraordinary item $ 0.50
==============
Dividends declared per common share $ 0.7575
==============
Weighted average number of common
shares outstanding 86,602
</TABLE>
See accompanying notes.
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND
THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
Basis of Presentation
The unaudited consolidated pro forma statements of operations on this Form 8-K/A
reflect the historical results of the Company adjusted to reflect the operations
of: (i) Crosswinds Apartments (formerly Tradewinds Apartments), Stoney Pointe
Apartments (formerly Stoneybrooke Apartments) and Dominion Trinity Place
Apartments, formerly (Trinity Place Apartments) acquired on February 28, 1997,
(the "Option Properties) (as previously reported on Form 8-K dated July 1, 1997
and subsequently amended on Form 8-K/A No. 1 dated July 1, 1997 which was filed
with the Securities and Exchange Commission on September 15, 1997), (ii)
Anderson Mill Oaks Apartments acquired on March 25, 1997, Oak Ridge Apartments
(formerly Post Oak Ridge Apartments) acquired on March 27, 1997, Green Oaks
Apartments (formerly Pineloch Apartments) and Skyhawk Apartments (formerly
Seahawk Apartments) acquired on May 8, 1997, (the "Texas Properties") (as
previously reported on Form 8-K dated July 1, 1997 and subsequently amended on
Form 8-K/A No. 1 dated July 1, 1997 which was filed with the Securities and
Exchange Commission on September 15, 1997), (iii) a portfolio of five apartment
communities containing 934 apartment homes acquired on July 1, 1997 (the
"Florida Portfolio") which consist of Lakeside Apartments, Mallards of
Brandywine Apartments, Lotus Landing Apartments , Orange Oaks Apartments and
Forest Creek Apartments, (as previously reported on Form 8-K dated July 1, 1997
and subsequently amended on Form 8-K/A No. 1 dated July 1, 1997 which was filed
with the Securities and Exchange Commission on September 15, 1997), (iv) a
portfolio of four apartment communities (the "Houston Portfolio") which consist
of Greenhouse Patio Apartments (formerly Pecan Grove Apartments) and Braesridge
Apartments acquired on September 26, 1997, Bammelwood Apartments acquired on
October 30, 1997 and Camino Village Apartments acquired on November 20, 1997,
(v) Waterside at Ironbridge Apartments acquired on September 29, 1997, (vi) 44
apartment communities containing 14,320 apartment homes (excluding 675 under
development) owned by South West Property Trust Inc. ("South West") that were
merged with and into UDR Western Residential, Inc., a wholly-owned subsidiary of
the Company, in a statutory merger (the "Merger") on December 31, 1996, (as
previously reported on Form 8-K dated December 31, 1996 and subsequently amended
on Form 8-K/A No. 1 dated December 31, 1996 which was filed with the Securities
and Exchange Commission on March 17, 1997), (vii) Steeplechase Apartments and
Westland Park Apartments acquired on March 7, 1996 and May 9, 1996, (as
previously reported on Form 8-K dated October 31, 1996 and subsequently updated
to reflect results of operations for the twelve months ended December 31, 1996
on Form 8-K/A No. 1 dated December 31, 1996 which was filed with the Securities
and Exchange Commission on March 17, 1997) and (viii) 18 apartment communities
containing 4,508 apartment homes acquired in an August 15, 1996 portfolio
acquisition (the ASoutheast Portfolio@) (as previously reported on Form 8-K
dated August 15, 1996 and subsequently updated to reflect the results of
operations for the twelve months ended December 31, 1996 on Form 8-K/A No. 1
dated December 31, 1996 which was filed with the Securities and Exchange
Commission on March 17, 1997). The above referenced acquisitions are shown as if
the acquisitions occurred on the first day of each reporting period presented.
The unaudited consolidated pro forma statements of operations on this Form 8-K/A
assume the acquisition of 17 apartment communities containing 5,394 apartment
homes for an aggregate purchase price of approximately $218.5 million, including
closing costs as referenced in sections (i) through (v) of the above paragraph.
These acquisitions are assumed to have been purchased with bank line borrowings
aggregating $145.9 million with a weighted average interest rate of 6.24%, the
assumption of seven mortgage notes payable aggregating $60.1 million with a
weighted average interest rate of 8.43% and the issuance of 849,498 Operating
Partnership Units at $14.75 per Unit for an aggregate value of $12.5 million.
These acquisitions are shown as if the acquistions occurred on the first day of
each reporting period presented.
For presentation purposes in the notes to the unaudited consolidated pro forma
statements of operations for the twelve months ended December 31, 1996 on this
Form 8-K/A, the Southeast Portfolio has been segregated into two components, the
development properties and the non-development properties. There are 14
properties containing 3,196 units which are considered non-development
properties and 4 properties containing 1,312 units which are considered
development properties. The 14 non-development properties were built prior to
1995 and the four development properties had completed units available for
occupancy at various times during 1995 and 1996. For each of the periods
presented, the pro forma adjustments for the four development properties are
determined based upon the weighted average balance of the purchase price
outstanding. The weighted average balance of the purchase price outstanding was
calculated by assuming the properties were financed and acquired by the Company
on the dates on which certificates of occupancy were obtained for each unit
during 1995 and 1996.
<PAGE>
Also, the unaudited consolidated pro forma statements of operations for the
twelve months ended December 31, 1996 assume the acquisition of the 14
non-development apartment communities contained in the Southeast Portfolio as if
it had occurred on the first day of the reporting period presented. The
unaudited consolidated pro forma statements of operations for the twelve months
ended December 31, 1996 include the effect of debt and equity incurred in
connection with the acquisition of the 14 non-development apartment communities
contained in the Southeast Portfolio which includes: (i) bank lines of credit of
approximately $14.0 million with a weighted average interest rate of 6.01% (the
Company's market interest rate on short-term bank borrowings in effect at the
time of the acquisition), (ii) the assumption of secured debt encumbering the
properties in the aggregate amount of approximately $75.2 million with a
weighted average interest rate of 7.30%, (iii) Seller financing of approximately
$13.9 million bearing interest of 7.10%, and (iv) the issuance of approximately
934,000 newly issued shares of the Company's common stock valued at $13.50 (the
closing sales price of the Company's common stock on the date of acquisition)
per share for total consideration of $12.6 million. The unaudited consolidated
pro forma statements of operations for the twelve months ended December 31, 1996
also assume the acquisition of the four development apartment communities
contained in the Southeast Portfolio. The unaudited consolidated pro forma
statements of operations for the twelve months ended December 31, 1996 include
the effects of debt and equity incurred in connection with the acquisition of
the four development apartment communities contained in the Southeast Portfolio
which includes: (i) bank lines of credit of approximately $11.2 million with a
weighted average interest rate of 6.01% (the Company's market interest rate on
short-term bank borrowings in effect at the time of the acquisition), (ii) the
assumption of secured debt encumbering the properties in the aggregate amount of
approximately $34.6 million with a weighted average interest rate of 6.59%,
(iii) Seller financing of approximately $11.1 million bearing interest of 7.10%
and (iv) the issuance of approximately 746,000 newly issued shares of the
Company's common stock valued at $13.50 per share (the closing sales price of
the Company's common stock on the date of acquisition) for total consideration
of $10.1 million.
The assumption of secured debt encumbering the Southeast Portfolio properties
consists of the following: (i) four mortgage notes payable encumbering specific
properties aggregating $38.6 million, (ii) a $40 million secured senior credit
facility with Wachovia Bank and (iii) a $31.2 million secured senior credit
facility with First Union National Bank, as follows:
<TABLE>
<CAPTION>
Specific Mortgage or Construction Notes Payable:
Loan Interest
Property Name Amount Rate
<S> <C>
Cape Harbor $ 9,500,000 6.531% (Variable-LIBOR + 1%)
The Village at Cliffdale 10,509,232 7.875%
Rivergate 9,837,246 8.000%
Morganton Place 8,739,750 6.531% (Variable-LIBOR + 1%)
-------------
$ 38,586,228
=============
Cross-Collateralize Secured Notes Payable:
Loan Interest
Lender Amount Rate
Wachovia Bank** $10,000,000 7.14%
Wachovia Bank** 5,000,000 6.98%
Wachovia Bank** 25,000,000 6.53% (Variable-LIBOR +1%)
First Union National Bank*** 20,000,000 7.75%
First Union National Bank*** 5,000,000 7.38%
First Union National Bank*** 5,000,000 7.50%
First Union National Bank*** 1,232,805 6.61% (Variable-LIBOR +1.18%)
-------------
$71,232,805
=============
Total Mortgage Notes Payable $109,819,033
=============
</TABLE>
<PAGE>
** The $40 million Wachovia Bank senior credit facility is secured by six
properties contained in the Southeast Portfolio. For purposes of this
Form 8- K/A, LIBOR is assumed to be 5.53% which represents the 3 month
LIBOR on August 15, 1996, the date of the acquisition. There are two
related interest rate swap agreements with Wachovia Bank in the
aggregate notional amount of $15 million under which the Company pays a
fixed-rate of interest and receives a variable-rate on the notional
amounts. The interest rate swaps effectively change the Company's
interest rate exposure from a variable-rate to a fixed-rate of 7.09%
(weighted average) on $15 million of the $40 million senior credit
facility.
*** The $31.2 million First Union National Bank senior credit facility is
secured by seven properties contained in the Southeast Portfolio. For
purposes of this Form 8- K/A, LIBOR is assumed to be 5.43% which
represents the 1 month LIBOR on August 15, 1996, the date of the
acquisition. There are three interest rate swap agreements with First
Union National Bank in the aggregate notional amount of $30 million
under which the Company pays a fixed-rate of interest and receives a
variable-rate on the notional amounts. The interest rate swaps
effectively change the Company's interest rate exposure from a
variable-rate to a fixed-rate of 7.65% (weighted average) on $30
million of the $31.2 million senior credit facility.
The unaudited consolidated pro forma statements of operations assume the Merger
with South West occurred on January 1, 1996. The Merger was accounted for as a
purchase in accordance with Accounting Principles Board No. 16. Assets and
liabilities acquired were recorded at their fair values at December 31, 1996 and
the results of operations are included from the date of acquisition. The
unaudited consolidated pro forma statements of operations for the twelve months
ended December 31, 1996 excludes extraordinary items of $10,677,000 included in
the South West Consolidated Statement of Operations which primarily relate to
costs directly attributable to the Merger and are therefore non-recurring. In
connection with the Merger, the Company issued approximately 22.8 million shares
of the Company's common stock at $14.125 per share for all of the outstanding
common stock of South West for an aggregate equity value of approximately $322.1
million. The Company acquired real estate assets of $559.6 million plus other
assets and cash of $8.4 million and $2.7 million, respectively. In addition, the
Company assumed debt totaling approximately $225.0 million, including the
following: (i) a renegotiated unsecured line of credit with an investment bank
in the amount of $69.1 million and a weighted average interest rate of 6.3%,
(ii) an unsecured note payable in the amount of $55.9 million bearing interest
of 7.9%, (iii) two REMIC financings aggregating $94.9 million with a weighted
average interest rate of 7.76%, (iv) one mortgage note payable in the amount of
$5.1 million bearing interest of 8.5%, and (v) other liabilities aggregating
$23.8 million.
In addition to the Merger outlined above, the unaudited consolidated pro forma
statements of operations assume the acquisition of Westland Park and
Steeplechase Apartments with bank line borrowings aggregating $30.2 million and
a weighted average interest rate of 5.98% (the Company's weighted average market
interest rate on short-term bank borrowings in effect at the time of each of the
acquisitions).
The unaudited consolidated pro forma statements of operations are not
necessarily indicative of what the Company's results would have been for the
nine months ended September 30, 1997 and for the twelve months ended December
31, 1996 if the acquisitions had been consummated at the beginning of each
period presented, nor do they purport to be indicative of the results of
operations or financial position in future periods.
(1) Represents the Company's Historical Statements of Operations contained
in its Quarterly Report on Form 10-Q for the nine months ended
September 30, 1997 and its Annual Report on Form 10-K for the twelve
months ended December 31, 1996.
(2) Represents the actual results of operations for the Southeast Portfolio
as previously reported in the unaudited combined results of operations
for the six months ended June 30, 1996, as appearing in Form 8-K dated
August 15, 1996.
(3) Represents the pro forma results of operations for the Southeast
Portfolio for the 45 day period from July 1, 1996 to August 15, 1996,
which was the period that the properties were not owned by the Company
during 1996 (based on the unaudited combined statement of rental
operations for the 182 day stub period from January 1, 1996 to June 30,
1996). The unaudited combined statement of rental operations was for
the stub period January 1, 1996 to June 30, 1996, as appearing in Form
8-K dated August 15, 1996 (See Note 2 above).
<PAGE>
(4) Reflects the net decrease in property management fees for the Southeast
Portfolio. The Company internally managed its apartment properties at
an assumed cost of approximately 2.5% of rental income (based upon 1995
actual information). The Company used 98% of the amount reported as
rental income in calculating the property management fee, as 2% of the
amount reported as rental income is assumed to be other income which is
not subject to management fee.
(5) Represents the net increase in insurance expense to reflect that the
Company insures its apartments for approximately $29.97 per unit more
than the historical insurance expense for the 4,508 apartment units in
Southeast Portfolio. The Southeast Portfolio had four properties
containing 1,312 units under development during 1996. Since the four
properties were under various stages of development during 1996, the
weighted average units outstanding for the period presented is used in
the calculation of the insurance pro forma adjustment. For the twelve
months ended December 31, 1996 the weighted average units outstanding
was 4,437 (3,196 non-development apartment homes and a weighted average
1,241 development apartment homes). The twelve months ended December
31, 1996 includes a pro forma adjustment for 227 out of 366 days.
(6) Reflects the net adjustments to depreciation expense to record the
Southeast Portfolio. For the non-development properties, depreciation
is computed on a straight-line basis over the useful lives of the
related assets based upon the actual purchase price allocation of the
Southeast Portfolio. Buildings have been depreciated over 35 years and
other improvements over a weighted average life of 7.1622 years based
upon the initial cost of the non-development properties in the
Southeast Portfolio of $115.7 million. The allocation and useful lives
are as follows for the non-development properties:
<TABLE>
<CAPTION>
Allocation of Useful Life Depreciation
Purchase Price In Years Adjustment*
<S> <C>
Building $ 96,637,354 35 $ 1,712,465
Other Improvements 7,296,003 7.1622 631,805
Land 11,739,024 N\A --
------------ -------------
$115,672,381 $ 2,344,270
============ =============
</TABLE>
Reflects the net adjustments to depreciation expense to record the
development properties in the Southeast Portfolio. Buildings have been
depreciated over 35 years and other improvements over a weighted
average life of 6.7 years based upon the initial cost of the
development properties in the Southeast Portfolio of $67.0 million. The
allocation and useful lives are as follows for the development
properties:
<TABLE>
<CAPTION>
Weighted Average
Allocation of Allocation of Useful Life Depreciation
Purchase Price Purchase Price** In Years Adjustment*
<S> <C>
Building $ 57,967,420 $ 54,604,690 35 $ 967,624
Other Improvements 4,048,512 3,768,179 6.7 348,820
Land 4,952,938 4,623,032 N\A --
------------- ------------- ------------
$ 66,968,870 $ 62,995,901 $ 1,316,444
============= ============= ============
Total $182,641,251 $ 3,660,714
============ ============
</TABLE>
* The twelve months ended December 31, 1996 includes a pro forma
adjustment for 227 out of 366 days.
** Since the four development properties were under various stages of
construction during 1996, the weighted average balance of the purchase
price outstanding for both periods presented is used in the calculation
for the depreciation expense pro forma adjustment.
(7) Reflects the additional interest expense associated with the
acquisition of the Southeast Portfolio. The additional interest expense
associated with the non-development properties contained in the
Southeast Portfolio is as follows: (i) variable-rate bank debt
aggregating $14.0 million used to fund the acquisition at assumed
interest rates equal to market rates in effect at the time of the
acquisition of 6.01%, (ii) the assumption of secured debt in the amount
of $75.2 million which includes two mortgage notes aggregating $20.3
million and seven cross-collateralized notes aggregating $54.9 million
with a weighted average interest rate of 7.36%, and (iii) the issuance
of a fixed-rate $13.9 million note to the Seller of the Southeast
Portfolio bearing interest of 7.10%.
<PAGE>
<TABLE>
<CAPTION>
Weighted Average Interest Expense
Type of Debt Total Debt Interest Rate Adjustment**
------------ --------------- ------------------ ---------------
<S> <C>
Bank Lines $ 13,982,880 6.01% $ 521,214
Secured Debt* 75,175,680 7.36% 3,432,639
Note to Seller 13,902,591 7.10% 612,208
------------ ---------------
$103,061,151 $ 4,566,061
============ ===============
</TABLE>
The additional interest expense associated with the acquisition of the
development properties contained in the Southeast Portfolio is as
follows: (i) additional bank debt aggregating $11.2 million used to
fund the acquisition at assumed interest rates equal to market rates in
effect at the time of the acquisition of 6.01%, (ii) the assumption of
various secured debt aggregating $34.6 million bearing a weighted
average interest rate of 6.76% which includes one mortgage note, one
construction note and seven cross-collateralized notes and (iii) the
issuance of a fixed-rate $11.1 million note to the Seller of the
Southeast Portfolio bearing interest of 7.10%.
<PAGE>
<TABLE>
<CAPTION>
Development Weighted Average Weighted Average Interest Expense
Property Total Debt Debt Outstanding* Interest Rate Adjustment**
<S> <C>
Morganton Place $ 12,386,796 $ 12,386,796 6.537781% $ 502,266
Lake Brandt 12,000,041 12,000,041 7.016978% 522,249
Cape Harbor 16,733,447 13,410,168 6.540838% 544,017
Stonesthrow 15,781,975 15,781,975 6.684529% 654,300
------------ --------------- -------------
$ 56,902,259 $ 53,578,980 $ 2,222,832
============ =============== ==============
Total $159,963,410 $ 6,788,893
============ ==============
</TABLE>
* The four development properties were under various stages of
construction during 1996, therefore, the interest expense pro forma
adjustment is based on the weighted average amount of debt outstanding
as determined by the weighted average balance of the purchase price
outstanding during each of the periods presented.
** The twelve months ended December 31, 1996 includes an interest expense
adjustment calculated on 227 days out of 366 days.
(8) Represents the issuance of 1,679,840 shares of the Company's common
stock to the Seller of the Southeast Portfolio at $13.50 per share. The
Company issued 934,165 shares of common stock which were attributable
to the non-development properties in the Southeast Portfolio based upon
the aggregate allocated purchase price. The shares are assumed to have
been outstanding from the beginning of the period presented and
includes a pro forma adjustment for 227 out of 366 days. The Company
issued 745,675 shares of common stock which were attributable to the
development properties in the Southeast Portfolio based on the
aggregate allocated purchase price. The shares are assumed to have been
issued and outstanding from the earlier of the beginning of the period
presented or the date on which certificates of occupancy were granted
for each unit contained in the development properties. For the twelve
months ended December 31, 1996, based upon the weighted average balance
of the purchase price outstanding during 1996, the weighted average
days the stock related to the development properties is assumed to have
been outstanding 175.92 (out of 366 days).
(9) Represents the actual results of operations for Steeplechase Apartments
and Westland Park Apartments that have been previously reported to the
Securities and Exchange Commission on Form 8-K dated October 31, 1996.
(10) Represents the pro forma adjustments for Westland Park and Steeplechase
Apartments. For Westland Park Apartments this represents the 8 day
period from May 1, 1996 to May 8, 1996, which was the period that the
property was not owned by the Company during 1996 and the period not
included in the actual results of operations in Note 9 (based on the
average per day unaudited statement of rental operations for the 121
day stub period from January 1, 1996 to April 30, 1996). For
Steeplechase Apartments this represents the 6 day period from March 1,
1996 to March 6, 1996, which was the period that the property was not
owned by the Company during 1996 and the period not included in the
actual results of operations in Note 9 (based on the average per day
unaudited statement of rental operations for the 60 day stub period
from January 1, 1996 to February 29, 1996).
<PAGE>
(11) Reflects the net decrease in property management fees for Westland Park
and Steeplechase Apartments. The Company internally managed its
apartment properties at an assumed cost of approximately 2.5% of rental
income (based upon 1995 actual information). The Company used 98% of
the amount reported as rental income in calculating the property
management fee, as 2% of the amount reported as rental income is
assumed to be other income which is not subject to management fee.
(12) Reflects the net adjustments to depreciation expense to record Westland
Park and Steeplechase Apartments acquisitions at the beginning of the
period presented. Depreciation is computed on a straight-line basis
over the useful lives of the related assets based upon the actual
purchase price allocations of the properties. Buildings have been
depreciated over 35 years and other assets over 5, 10 or 20 years
depending on the useful life of the related asset. The weighted
average life of other assets for Westland Park and Steeplechase
Apartments is approximately 7.41 years based upon the initial cost of
the properties of $30.2 million. The allocation and useful lives are
as follows:
Allocation of Useful Life Depreciation
Purchase Price In Years Adjustment*
Building $ 25,133,903 35 $ 200,384
Other Improvements 1,375,227 7.405319 51,820
Land 3,689,016 --
-------------- ------------
$ 30,198,146 $ 252,204
============= ===========
* The twelve months ended December 31, 1996, includes a pro forma
adjustment for 102.13 (66 days for Steeplechase Apartments and 129 days
for Westland Park Apartments) out of 366 days.
(13) Reflects the additional interest expense associated with the
acquisition of Westland Park and Steeplechase Apartments on
variable-rate bank debt aggregating $30.2 million used to fund the
acquisitions at assumed interest rates equal to market rates in effect
at the time of each respective acquisition.
Interest Expense
Property Total Debt Interest Rate Adjustment*
Westland Park $ 16,699,276 6.0296% $ 354,891
Steeplechase 13,498,870 5.9144% 143,969
------------- -------------
$ 30,198,146 $ 498,860
============= =============
* The interest expense adjustment for Westland Park and Steeplechase
Apartments is for 129 and 66 days, respectively (based on a 366 day
year).
(14) Represents the historical results of operations of South West Property
Trust Inc. for the twelve months ended December 31, 1996, as previously
reported on Form 8-K dated December 31,1996 and subsequently amended on
Form 8-K/A Amendment No. 1 dated December 31, 1996 which was filed with
the Securities and Exchange Commission on March 17, 1997. Certain
reclassifications have been made to South West's historical statements
of operations to conform to the Company's financial statement
presentations.
(15) Reflects the net estimated reduction of property management costs of
$1,089,000 for the twelve months ended December 31, 1996 based upon the
identified historical costs for those items which are anticipated to be
eliminated or reduced as a result of the Merger, as follows (in
thousands):
Net reduction in salary, benefits and occupancy costs $ 497
Net reduction in travel, entertainment & other 141
Net reduction in other expenses 451
-------
Pro forma adjustment $ 1,089
=======
<PAGE>
(16) Represents the net increase in depreciation of real estate owned as a
result of recording the South West real estate assets at fair value
versus historical cost. Depreciation is computed on a straight-line
basis over the estimated useful lives of the related assets which have
an estimated weighted average useful life of approximately 27.6 years.
Buildings have been depreciated over 35 years and other assets over 5,
10 or 20 years depending on the useful life of the related asset.
Calculation of fair value of depreciable real estate assets at December
31, 1996 (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Purchase price $ 572,281
Less:
Purchase price allocated to cash and other assets (12,690)
Purchase price allocated to land (104,044)
Purchase price allocated to real estate under development* (28,623)
-----------
Pro forma basis of South West's depreciable real estate
held for investment at fair value assets $ 426,924
===========
</TABLE>
* At December 31, 1996 South West had one apartment
community containing 315 apartment homes and three
additions to existing properties which will total 360
apartment homes under development. The historical
cost of real estate under development is assumed to
be at fair value.
Calculation of depreciation of real estate owned for the twelve months
ended December 31, 1996 (in thousands):
Depreciation expense based upon an
estimated weighted average useful
life of approximately 27.6 years $ 15,462
Less historical South West depreciation of real
estate owned (13,447)
--------
Pro forma adjustment $ 2,015
========
(17) Represents the estimated net adjustment to interest expense as a result
of the Merger for the twelve months ended December 31, 1996, as follows
(in thousands):
<TABLE>
<CAPTION>
<S> <C>
To adjust amortization of South West's deferred financing costs
which were eliminated in connection
with the Merger $ (1,295)
To adjust the amortization of the premium required to mark
South West's notes payable to fair value (278)
To reflect the additional borrowings of $4.1 million of variable-rate
bank line borrowings used to fund the Merger costs
(at current market interest rates available to
the Company of 6.3%) 257
----------
Pro forma adjustment $ (1,316)
==========
</TABLE>
(18) Represents the net reduction to general and administrative costs of
$1,438,000 for the twelve months ended December 31, 1996 based upon the
identified historical costs of certain items which are anticipated to
be eliminated or reduced as a results of the Merger, as follows (in
thousands):
Net reduction in salary, benefits and occupancy costs $ 659
Net reduction in duplication of public company
expenses 178
Net reduction in other expenses 601
---------
$ 1,438
=========
<PAGE>
(19) The pro forma weighted average shares outstanding for the twelve months
ended December 31, 1996 are computed as follows (in thousands):
South West's historical weighted average common shares
outstanding 20,937
Plus: effect of South West vested stock options converted
upon Merger 211
Less: dilutive effect of South West stock options
To be eliminated in the Merger (220)
South West adjusted weighted average common shares -------
outstanding 20,928
=======
The Company's pro forma weighted average
common shares outstanding 58,834
Issuance of the Company's common stock at an
exchange ratio of 1.0833 for all of the South
West common stock in connection with
the Merger ** 22,671
--------
Pro forma shares 81,505
========
** Weighted average historical South West common shares
outstanding multiplied by the exchange ratio.
(20) Represents the actual results of operations of the Option Properties as
previously reported in the unaudited combined results of operations as
appearing in Form 8-K/A No. 1 dated July 1, 1997 filed with the
Securities and Exchange Commission on September 15, 1997.
(21) Represents the actual results of operations of the Texas Properties as
previously reported in the unaudited combined results of operations as
appearing in Form 8-K/A No. 1 dated July 1, 1997 filed with the
Securities and Exchange Commission on September 15, 1997.
(22) Represents operations of Oak Ridge Apartments (for the 26 day period
from March 1, 1997 to March 26, 1997) and Anderson Mill Oaks Apartments
(for the 24 day period from March 1, 1997 to March 24, 1997), which
represents the period the properties were not owned by the Company
during the nine month period ended September 30, 1997 (based on the
operating statements of the properties for the stub period January 1,
1997 to February 28, 1997). The unaudited combined statements of rental
operations were for the stub period January 1, 1997 to February 28,
1997 as previously reported in Form 8-K/A No. 1 dated July 1, 1997
filed with the Securities and Exchange Commission on September 15,
1997. Represents operations of Pineloch Apartments and Seahawk
Apartments, (for the 7 day period from May 1, 1997 to May 7, 1997),
which represents the period the properties were not owned by the
Company during the nine month period ended September 30, 1997 (based on
the operating statements of the properties for the stub period January
1, 1997 to April 30, 1997). The unaudited combined statements of rental
operations were for the stub period January 1, 1997 to April 30, 1997
as previously reported in Form 8-K/A No. 1 dated July 1, 1997 filed
with the Securities and Exchange Commission on September 15, 1997.
(23) Represents the actual results of operations of the Florida Portfolio as
previously reported in the unaudited combined results of operations as
appearing in Form 8-K/A dated July 1, 1997 filed with the Securities
and Exchange Commission on September 15, 1997.
(24) Reflects the net reduction in property management fees for the Option
Properties, Texas Properties and Florida Portfolio. The Company
internally manages its apartment portfolio at an assumed cost of
approximately 3.4% of rental income (based on 1997 actual information
for the six months ended June 30, 1997) at the time of the filing of
the Form 8-K/A dated July 1, 1997 filed with the Securities and
Exchange Commission on September 15, 1997. The Company uses 96% of the
amount reported as rental income in calculating the property management
fee, as approximately 4% (based on 1997 actual information for the six
months ended June 30, 1997) of the amount reported as rental income is
assumed to be other income which is not subject to management fee.
<PAGE>
(25) Reflects the net adjustments to record depreciation expense for the
Option Properties, Texas Properties and Florida Portfolio at the
beginning of each period presented. Depreciation is computed on a
straight-line basis over the useful lives of the related assets based
upon the actual purchase price allocations of the Properties. Buildings
have been depreciated over 35 years and other assets over 5, 10 or 20
years depending on the useful life of the related asset. The Company's
policy is to record a full month of depreciation in the month of
acquisition. The weighted average life of other improvements is
approximately 7.67 years based upon the initial cost of the Properties
of $151.1 million. The allocation and useful lives are as follows (in
thousands of dollars):
<TABLE>
<CAPTION>
Twelve Month Nine Month
Useful Life Depreciation Depreciation
Purchase Price In Years Expense Adjustments Expense Adjustment*
<S> <C>
Buildings $ 118,714 35 $ 3,392 $ 814
Other Improvements 7,822 7.67 1,020 245
Land 24,612 n/a -- --
----------- --------- -------
Total $ 151,148 $ 4,412 $ 1,059
=========== ========= =======
</TABLE>
* The nine months ended September 30, 1997, includes a pro forma
adjustment for 2.88 months (1 month for the Option Properties, 2 months
for Anderson Mill Oaks and Oak Ridge Apartments, 4 months for Pineloch
Apartments and Seahawk Apartments, and 6 months for the Florida
Portfolio) out of 12 months.
(26) Reflects the additional interest expense associated with the Option
Properties, Texas Properties and Florida Portfolio as reported
elsewhere herein which consists of the following: (i) variable-rate
bank debt aggregating approximately $129.1 million used to fund the
acquisitions at assumed interest rates equal to market rates in effect
at the time of each acquisition with a weighted average interest rate
of 6.26% and (ii) the assumption of approximately $22.0 million of
fixed-rate mortgage debt with a weighted average interest rate of 8.39%
as outlined below (in thousands of dollars):
<TABLE>
<CAPTION> Twelve Month Nine Month
Weighted Average Interest Expense Interest Expense
Acquisition Type of Debt Amount Interest Rate Adjustment * Adjustment
<S> <C>
Option Properties Bank Lines $ 36,774 6.058% $ 2,228 $ 360 **
Option Properties Secured Debt 22,063 8.389% 1,851 299 **
Texas Properties Bank Lines 56,311 6.291% 3,542 998 ***
Florida Portfolio Bank Lines 36,000 6.410% 2,308 1,144 ****
----------- -------- ----------
$ 151,148 $ 9,929 $ 2,801
=========== ======== ==========
</TABLE>
* The twelve months ended December 31, 1996 includes a pro forma
adjustment for the full year.
** The nine months ended September 30, 1997, includes a pro forma
adjustment for 59 out of 365 days.
*** The nine months ended September 30, 1997, includes a pro forma
adjustment for approximately 103 out of 365 days.
**** The nine months ended September 30, 1997, includes a pro forma
adjustment for 181 out of 365 days.
(27) Represents the actual results of operations of the Houston Portfolio as
reported elsewhere herein.
(28) Represents the actual results of operations of Waterside at Ironbridge
Apartments as reported elsewhere herein.
<PAGE>
(29) Represents operations of Greenhouse Patio Apartments and Braesridge
Apartments (for the 26 day period from September 1, 1997 to September
26, 1997) and Waterside at Ironbridge Apartments (for the 29 day period
from September 1, 1997 to September 29, 1997), which represents the
period the properties were not owned by the Company during the nine
month period ended September 30, 1997 (based on the operating
statements of the properties for the stub period January 1, 1997 to
August 31, 1997 which consists of 243 days). The unaudited combined
statements of rental operations were for the stub period January 1,
1997 to August 31, 1997 as reported elsewhere herein.
(30) Reflects the net reduction in property management fees for the Houston
Properties and Waterside at Ironbridge Apartments as reported elsewhere
herein. The Company internally manages its apartment portfolio at an
assumed cost of approximately 3.2% of rental income (based on 1997
actual information for the nine months ended September 30, 1997). The
Company uses 96% of the amount reported as rental income in calculating
the property management fee, as approximately 4% (based on 1997 actual
information for the nine months ended September 30, 1997) of the amount
reported as rental income is assumed to be other income which is not
subject to management fee.
(31) Reflects the net adjustments to record depreciation expense for the
Houston Properties and Waterside at Ironbridge Apartments, at the
beginning of each period presented. Depreciation is computed on a
straight-line basis over the useful lives of the related assets based
upon the actual purchase price allocations of the Properties. Buildings
have been depreciated over 35 years and other assets over 5, 10 or 20
years depending on the useful life of the related asset. The Company's
policy is to record a full month of depreciation in the month of
acquisition. The weighted average life of other improvements is
approximately 7.72 years based upon the initial cost of the Properties
of $67.4 million. The allocation and useful lives are as follows (in
thousands of dollars):
<TABLE>
<CAPTION>
Twelve Month Nine Month
Useful Life Depreciation Depreciation
Purchase Price In Years Expense Adjustments Expense Adjustment*
<S> <C>
Buildings $ 50,828 35 $ 1,452 $ 1,001
Other Improvements 4,415 7.72 572 398
Land 12,120 n/a -- --
------------- --------- --------
Total $ 67,363 $ 2,024 $ 1,399
============= ========= ========
</TABLE>
* The nine months ended September 30, 1997, includes a pro forma
adjustment for 8.275 months (8 months for Greenhouse Patio Apartments,
Braesridge Apartments and Waterside at Ironbridge Apartments and 9
months for Camino Village Apartments and Bammelwood Apartments) out of
12 months.
(32) Reflects the additional interest expense associated with the Houston
Properties and Waterside at Ironbridge Apartments as reported elsewhere
herein which consists of the following: (i) variable-rate bank debt
aggregating approximately $16.8 million used to fund the acquisitions
at assumed interest rates equal to market rates in effect at the time
of each acquisition with a weighted average interest rate of 6.1% and
(ii) the assumption of approximately $38.0 million of fixed-rate
mortgage debt with a weighted average interest rate of 8.43% as
outlined below (in thousands of dollars):
<TABLE>
<CAPTION>
Twelve Month Nine Month
Weighted Average Interest Expense Interest Expense
Acquisition Type of Debt Amount Interest Rate Adjustment * Adjustment
<S> <C>
Houston Properties Bank Lines $ 6,877 6.089% $ 419 $ 311 **
Houston Properties Secured Debt 32,874 8.685% 2,855 2,116 **
Waterside Bank Lines 9,949 6.087% 606 451 ***
Waterside Secured Debt 5,133 7.000% 359 268 ***
-------------- ---------- ----------
$ 54,833 $ 4,239 $ 3,146
============== ========== ==========
</TABLE>
* The twelve months ended December 31, 1996 includes a pro forma
adjustment for the full year.
** The nine months ended September 30, 1997, includes a pro forma
adjustment for approximately 271 out of 365 days.
<PAGE>
*** The nine months ended September 30, 1997, includes a pro forma
adjustment for approximately 272 out of 365 days.
(33) Reflects the additional minority interest expense associated with the
acquisition of Houston Properties. In connection with the acquisition
of the Houston Properties, the Company issued 849,498 Operating
Partnership Units at $14.75 per Unit for an aggregate value of $12.5
million. Assuming the acquisition of the Houston Properties at the
beginning of each period presented, the minority interest ownership
would have been 10.6339% of the Operating Partnership which had
earnings of approximately $5.5 million and $4.2 million for the twelve
months ended December 31, 1996 and the nine months ended September 30,
1997, respectively.
[L.P. MARTIN & COMPANY LETTERHEAD]
L.P. MARTIN & COMPANY
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: (804) 346-2626
FAX: (804) 346-9311
CONSENT OF L.P. MARTIN & COMPANY, P.C., INDEPENDENT AUDITORS
The Board of Directors
United Dominion Realty Trust, Inc.
We consent to the incorporation by reference in the previously filed
Registration Statement Form S-3 No. 33-40433, Registration Statement Form S-3
No. 333-27221, Registration Statement Form S-3 No. 33-64275, Registration
Statement Form S-3 No. 333-11207, Registration Statement Form S-3 No. 333-15133,
Registration Statement Form S-8 No. 33-47926, Registration Statement Form S-8
No. 33-48000, Registration Statement Form S-8 No. 33-58201, Registration
Statement Form S-8 No. 333-32829, and Registration Statement Form S-8 No.
333-42691, of United Dominion Realty Trust, Inc. of our report dated November
14, 1997, with respect to the statement of rental operations of Waterside at
Ironbridge Apartments for the year ended December 31, 1996, our report dated
November 20, 1997, with respect to the statement of rental operations of
Bammelwood Apartments for the year ended December 31, 1996, our report dated
November 20, 1997, with respect to the statement of rental operations of
Braesridge Apartments for the year ended December 31, 1996, our report dated
November 20, 1997, with respect to the statement of rental operations of Camino
Village Apartments for the year ended December 31, 1996, and our report dated
November 20, 1997, with respect to the statement of rental operations of Pecan
Grove Apartments for the year ended December 31, 1996, included in this Form
8-K/A, Amendment to Application or Report on Form 8-K dated October 21, 1997.
/s/ L. P. Martin & Company, P.C.
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
December 31, 1997
